Discounts and give–get trades

A discount looks small against the price and large against what Klasna keeps. Each 800 UAH lesson costs 430 for the tutor and 31 for video and AI, so Klasna keeps 339 UAH. A discount comes straight out of those 339.

So the right question is: how many more lessons does a discount need just to earn the same total contribution? That's the discount break-even volume:

ΔV = d ÷ (m − d), where d is the discount per lesson and m the contribution before it.

• 10% off (80 UAH): 80 ÷ (339 − 80) = 80 ÷ 259 = 30.89% more lessons.
• 5% off (40 UAH): 40 ÷ (339 − 40) = 40 ÷ 299 = 13.38% more lessons.

Two common slips: dividing by 339 instead of 259 (it forgets each lesson now earns less), and assuming the extra volume equals the discount (5% off needs 5% more). Both make a discount look far cheaper than it is.

A longer payment term looks free: same price, just later. It isn't. Money Klasna waits for is money it has to borrow or doesn't have. Hanna treats Klasna's credit line, 24% a year, as the cost of its money.

The cost of extra days on one lesson:

price × annual rate × extra days ÷ 365

For 60 days instead of 30: 800 × 0.24 × 30 ÷ 365 = 15.78 UAH a lesson, about 2% of the price, and all of it out of the 339 Klasna keeps.

So a longer term is a hidden discount: it never appears on the invoice, but it costs as much as one. Count it whenever you add up what a buyer is asking for, together with any visible discount.

The lesson "Receivables and payment terms" in the course "Finance for Product People" goes deeper into what terms do to cash.

Not every discount is written as a lower price. Several requests keep the price at 800 UAH and still cut what Klasna earns:

• Longer payment terms: 60 days instead of 30 cost the price of money, 15.78 UAH a lesson at 24% a year.
• Free lessons: two free for every ten paid is a lower real price per lesson (800 × 10 ÷ 12 ≈ 667).
• Open-ended carry-over: unused lessons with no expiry keep Klasna owing lessons indefinitely, tutors and all.

Some requests are the opposite or cost little. Paying a quarter in advance gives Klasna money earlier, so it's a give from the buyer, not a concession. A monthly attendance report that Klasna already includes isn't a price concession at all.

The test: does Klasna end up with less money, or money later, for the same work? If yes, it's a discount, whatever it's called, and it belongs in the trade.

Refusing a discount often loses the deal; giving it away teaches the buyer that asking pays. The middle path is a give–get trade: every concession comes with something back that's worth at least as much to Klasna. "We can do that if you can do this."

What a buyer can give:

• more lessons, enough to cover the discount's break-even volume;
• a longer contract, such as twelve months instead of three;
• payment in advance;
• a named reference Klasna can mention to the next prospect.

So to Cobalt's "10%, like our current school", a trade sounds like: "We can do 5% with a twelve-month commitment and a reference you're happy to give." It gives her a reason to say yes that she can explain to her own boss.

What isn't a trade: "Fine, 10%" for nothing, or a deadline that isn't real ("valid until Friday").

A trade is only a trade if you can name what the give is worth to Klasna. Otherwise it's a discount with extra steps.

• More lessons a month: enough extra volume can earn back the contribution the discount takes; for 5% off, at least 13.38% more lessons.
• A twelve-month commitment: revenue Klasna can plan tutors and cash around, instead of a quarter that may not renew.
• Payment in advance: cash arrives before the tutor payouts, so Klasna borrows less on its 24% credit line.
• A named reference: proof that lowers the next prospect's risk, which matters for a team with no logistics clients yet.

Match the give to the concession's size. A small discount can be covered by a reference; a 10% discount needs something substantial, such as a year's contract plus prepayment. If the buyer can't give anything that's worth the concession, the honest answer is a smaller concession, not the same one for less.

Klasna's rule is simple: you don't discount on your own. Bigger concessions need more senior approval and a bigger give:

• 3%: Marta approves, for a six-month commitment;
• 5%: Marta approves, for twelve months plus a reference;
• 10%: Leo and Hanna approve, for twelve months and quarterly prepayment;
• 20%: not offered.

This is an approval matrix; in larger companies a deal desk runs it. It protects the seller too: "I can't approve that alone" is true, not a trick, and it gives you time to price the request properly.

The line not to cross is the invented boss: "my boss would never allow it" when nobody has been asked. That's a bluff, and bluffs get called. Say what the rule is and what it would take: "10% is possible with a twelve-month contract and prepayment, approved by our CEO and head of finance." That's a door, not a wall.

With the approval matrix in hand, the honest answer to a request states the real rule and what it would take, and offers a smaller trade as an alternative.

Cobalt asks for 10% with no commitment. Klasna's rules give 10% only for twelve months and prepayment, approved by Leo and Hanna. So: "10% is possible with a twelve-month contract and payment in advance, approved by our CEO and head of finance; or 3% with a six-month commitment."

The wrong answers each break something:

• "Yes, 10% it is" breaks the approval rules and costs 30.89% extra volume nobody committed to;
• "My boss would never allow it" is an invented boss;
• "10% if you sign by Friday" is an invented deadline.

The honest version keeps the door open, gives the buyer a choice she can take to her own boss, and keeps Klasna's rules intact.

A discount request gets a short, repeatable process:

1. Ask what's behind it: a fixed budget, a comparison with another offer, a win for procurement. "Same as now" may mean any of these, and each needs a different trade.
2. Put a number on it, including hidden discounts such as longer terms.
3. Decide what you'd need in return and check who can approve it.
4. Offer two trades in writing, for example "800 on 30 days, or 776 with a six-month commitment", so the buyer picks the one that suits her and both work for Klasna.
5. Write the agreed trade into the contract, not into someone's memory.

The order matters: understand before pricing, price before asking, check approval before promising. And if the buyer refuses every trade, the request was never about price; go back to discovery, not to a lower number.

How it fits together: discounts come out of contribution, terms are hidden discounts, trade every concession, follow the approval matrix, offer choices in writing. Next lesson, the module's case: Veloria's procurement asks for 20% off and 60 days at once.