Discounts are a pricing decision nobody made

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In most B2B businesses the average realised discount is larger than the net margin. That is not an exaggeration or a rhetorical device — it is what the transaction data usually shows once you look at it by customer rather than in aggregate.

What makes this striking is that almost nobody decided it. There was no meeting at which the company resolved to give away that much. It accumulated: an exception granted to close a quarter, a rate held flat for a customer who threatened to leave, a bundle priced generously to win a logo, each defensible on its own and none ever revisited.

Why it persists

Three things keep it in place. Discounts are granted by people whose incentives reward volume. They are recorded as a reduction in revenue rather than as a cost, so they never appear in a budget anyone defends. And the customer who received one last year expects it again this year, which turns a concession into a baseline.

The question is not whether your discounts are too large. It is whether anyone can explain why each one is the size it is.

What to do about it

• Plot realised price by customer, not average discount by segment. The dispersion is the finding.
• Separate discounts that bought something — volume, a commitment, a reference — from those that bought nothing.
• Set the floor before the negotiation, not during it.

None of this requires a repricing. It requires knowing what you are currently charging, which is a surprisingly uncommon thing to know precisely.