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

Optimisation in a channel business is less about elasticity modelling and more about consistency: the same product goes out at dozens of prices to similar customers in similar situations, and most of the spread is unexplained rather than strategic.

The practical starting point is a pocket-price band per segment. Once you can see the distribution, the outliers name themselves, and tightening the bottom decile is usually worth more than any headline price move.

Related terms

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 erosion

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

Price triangulation

Reconciling the three prices that exist for one transaction — invoice price, contract price and net-net pocket price — into a single agreed number.

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