Pricing

Margin floor

The minimum acceptable margin for a transaction, below which approval must escalate.

A margin floor is only meaningful if it is applied to the right number. Enforced on invoice margin, it is routinely satisfied by deals that settle below cost once rebates and claims land.

Floors expressed against pocket price — including the incentives that will settle later — are the version that actually protects margin, and they require the pocket number to be computable before the deal is approved.

Related terms

Pocket price

What you actually keep from a transaction after every on-invoice and off-invoice reduction.

Discount stacking

The accumulation of multiple independently-approved concessions on the same transaction, producing a combined reduction nobody authorised.

Price optimisation

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

Still not clear?

Send it to us. We answer, and the good questions end up back in this glossary.

Ask us directly →

See the term in the product.

Thirty minutes, walking the mechanism you just read about through modelling, accrual, claim and settlement — against examples close to your own programmes.

Book a demo Back to terminology