Discount waterfall
Pricing Model
Predefined discounts structured as tranches, steps, or thresholds based on spend or unit volume. The discount waterfall is an Incentive mechanism in price setting — it should be standardized by type, applied consistently, designed to encourage specific customer behavior (volume commitment, longer terms, early payment), have clear limits, and be used judiciously. An undisciplined waterfall erodes margin invisibly because each discount layer compounds on the one above it.