Management question
Locked evidence · 2026-09-16The customer wants a discount. What does saying yes actually cost us?
The requested R12 000 discount cuts booking profit from R30 000 to R18 000 and moves the monthly forecast from R5 000 above target to R7 000 below.
What PP sees
The quote is healthy before the request. The requested discount crosses both the booking margin target and monthly profit target.
What is driving it
- 1. Requested price reduction−R12 000
- 2. Unchanged delivery costR90 000
Consequence
Revenue R120 000 → R108 000; margin 25.0% → 16.7%.
Impact on the venue
- Monthly Latest Forecast R205 000 → R193 000
- Monthly target position R5 000 above → R7 000 below
Reference point
Maximum concession retaining 22.0% margin
R4 615 / 3.8%
Before
25.0%
R 30 000
After request
16.7%
R 18 000
Target margin 22.0%
Management options
1. Target-preserving discount
Maximum concession R4 615 (3.8%)
Revenue R115 385 · profit R25 385 · 22.0% margin
Profit lower by R4 615
Delivery cost remains unchanged.
2. Reduce scope
Remove the approved R8 000 inclusion and reduce price by the same amount
Revenue R112 000 · cost R85 000 · profit R27 000
Profit falls R3 000, not R8 000
Inclusion can genuinely be removed.
3. Trade value instead of price
Keep price; provide approved R6 000 upgrade
Customer value R6 000 · venue profit cost R1 800
Protects R4 200 versus a cash concession
Approved selling value and incremental cost are current.
4. Accept deliberately
Accept R12 000 concession
Profit R18 000 · margin 16.7% · monthly forecast R193 000
R12 000 lower profit
Requires the authority route shown below.
Confidence & evidence
Confidence: high
Source: PincushionDemoEstateScenario · vinteractive-1
Calculation: pp-decision-analysis-1.0.0
Policy: fixture-1
Management may still choose the concession for a strategic reason, but the financial cost is explicit.