Discount Curve Analysis (DCA) is an essential but often underused method that summarizes the % of Units (or Cumulative % of Units) sold at each 1% Price Discount (from 0% to 100%). 

We can build a DCA at various levels, including Company, Region, Product Family, Sales Territory, or Sales Rep. It gives us insight into our company's pricing behaviors, such as:

• What % of my product is sold at List Price (0% discount)?

• What is the Discounting Behavior of my sales organization, and how does this differ by Region, Sales Manager, etc.?

• Is the Sales Org strategic about giving discounts, or is there a tendency to go to the highest discount level that my skip-level Sales Director / VP can approve?

• How much free product are we giving away to Customers?

The elements of Discount Curve Analysis (along with Price Elasticities) can also serve as the foundation for more robust Scenario Analyses that your Revenue Management or Finance teams can run as part of an annual or quarterly planning process:

• What are the incremental Net Sales, Gross Profit, and Operating Profit impact if we decrease the Sales VP level Discount Authority from 50% to 45%?

• What is the business impact if we limit free product giveaways from $2,000 to $1,000 per annum for non-strategic customers?

• How many Sales and Profit upside can we drive by reducing our Customer or Product-level discount outliers to be in line with the top 25th percentile for the organization?

• What are the results if we close the gap only halfway?

Watch this short tutorial video to learn more: