Discounts are a growth tool. Used well, they accelerate adoption, reward commitment, and build strategic relationships. Used badly, they destroy pricing discipline, train the market to wait, and create a race to the bottom.
The difference is whether discounts follow a policy or happen ad hoc.
The problem with ad hoc discounting
Sales team needs to close a deal. The brand is hesitant. The sales rep offers 15% off.
Deal closes.
Next quarter, the same brand expects 15% off. The sales rep gives it, because the precedent is set. Another brand hears about the discount and demands the same. Now 15% off is the effective market rate.
Meanwhile, the rate card says €15 CPM. Nobody pays it. The rate card is decorative.
This happens in every media business that doesn't have discount discipline. And it's particularly damaging in retail media, where the product is premium and the premium depends on proof quality that costs real money to deliver.
What a discount policy includes
Maximum discount authority by role. Sales reps can offer up to X%. Sales directors up to Y%. Anything above Y% requires VP or CEO approval. This prevents escalation without accountability.
Eligible discount triggers. Discounts are only available for specific, documented reasons: - Volume commitment (JBP rebate structure) - First campaign (introductory rate, one-time only, documented as such) - Strategic market entry (new market, limited duration, pre-approved) - Multi-year commitment (annual contracts with guaranteed minimums)
Ineligible triggers. "The client asked for a discount" is not a reason. "The competitor is cheaper" is not a reason (compete on value, not price). "We need to hit quarterly target"
is not a reason (short-term target pressure creates long-term pricing damage).
Documentation. Every discount is logged: who approved it, what the trigger was, what the effective rate is, and when it expires. This creates accountability and prevents precedent creep.
Expiry. Introductory discounts expire. They don't auto-renew. The brand's second campaign is at standard rates. If they want ongoing value, they commit to a JBP.
The growth balance
The policy shouldn't prevent growth. It should channel it.
New brands should have an easy on-ramp, a first-campaign package at an introductory rate that demonstrates value. The price is lower, but it's positioned as introductory, with a clear path to standard pricing.
Large brands should have volume incentives, JBP rebates that reward commitment without discounting the unit price.
Strategic accounts should have custom structures, but documented, approved, and finite in duration.
The principle: make it easy to start, rewarding to commit, and transparent throughout.
But never let the effective price drop below the floor without executive approval and documented justification.
The bottom line
Discounts can accelerate adoption. They can also destroy pricing discipline if you don't set rules.
Build a policy. Define who can discount, by how much, for what reason, and for how long. Document every exception. Expire introductory rates.
The market remembers the lowest price it's been offered. Make sure that price was intentional, not a sales rep's improvisation on a Thursday afternoon.
Related Reading
- Agency Rebates: Why Retail Media Revenue Is Always Net, Not Gross
- Pricing by Objective: Why Awareness CPM Is Cheaper Than Sales CPM
- Media-to-Sales Attribution: The Proof That Changes Procurement Behavior
- JBP Rebates: How to Discount Without Destroying Your Rate Card
- AI Will Kill M&Ms in Retail Media
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