Margin-Calibrated Discounting
Pricing ModelSales Compensation
SPP's term for the practice of engineering a smooth pricing surface that produces a targeted net price at every commitment level a customer might make, calibrated so that gross margin is the primary lever rather than revenue. The pricing surface replaces tier-step discount tables with a smooth net-price function whose slope (the rate at which discount accumulates with volume) is engineered against margin targets at every threshold, not just at tier boundaries. The practice removes the cliff-edge negotiation behaviors tiered breaks invite (customers gaming the volume threshold; reps round-tripping through the next tier just to access the next discount).
Used in these articles
- Continuous Monetization: The B2B Software Pricing Discipline | SPP
- GitHub Copilot Pricing Change Reveals the 5-Position AI Pricing Spectrum
- From Coarse Volume Tiers to a Smooth Pricing Surface: The Artifact AI Consumption Forces
- Margin-Calibrated Discounting: The Pricing Surface Software Should Have Inherited