Pricing

Price erosion

The gradual decline of realised price over time through accumulated concessions, without any deliberate decision to lower the price.

Erosion is the aggregate of many small, individually-defensible moves: a match to a competitor here, an extra point to close a quarter there, an allowance that was meant to be temporary and never ended.

Because each step is small and the baseline moves with it, erosion is invisible in month-on-month comparison and obvious only in a multi-year view — by which point the market price expectation has reset.

Related terms

Discount stacking

The accumulation of multiple independently-approved concessions on the same transaction, producing a combined reduction nobody authorised.

Pocket price

What you actually keep from a transaction after every on-invoice and off-invoice reduction.

Margin floor

The minimum acceptable margin for a transaction, below which approval must escalate.

Price optimisation

Setting price by segment, product and deal characteristics using evidence about what the market actually pays, rather than by cost-plus or by precedent.

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