# What a discount buys, and what it gives away > A discount is a price you pay for something: prepayment, commitment, volume, quiet months, a new family. Without a give-and-get it is margin handed to people who would have bought anyway. - Course: [Pricing: Set, Package and Raise Your Prices](https://productovi.com/courses/pricing.md) - Module: When does a discount pay? - Lesson 21/32, ~26 min - Source: https://productovi.com/courses/pricing/what-a-discount-buys ## Ten percent to whoever asks **Alex Tutor:** You're on Klasna's growth team, working on the price list with Nazar. Last module you made the price page honest; this one is about discounts: when one pays, and when it only gives money away. **Nazar:** Here's my favorite tool. A parent hesitates over an English 8-pack in the support chat, and support sends code CHAT10: 10% off. It closes the sale almost every time. **Sofia:** But would they have bought anyway? Hesitating isn't the same as leaving. **Alex Tutor:** Before any numbers: what should a discount be in the first place? > **Exercise:** Which statement best describes a **good** discount? **Alex Tutor:** That's the real question. A 10% discount isn't 10% of profit. Klasna still pays the tutor 390 and 30 for video and AI per lesson; only the payment fee shrinks with the price. Work out what the 8-pack leaves with CHAT10. **Alex Tutor:** A quick intuition check before the exact sum. > **Exercise:** **True or false:** a 10% discount on the English 8-pack cuts the package's contribution by about 10%. **Alex Tutor:** How many extra buyers a cut must bring to break even is the maths of the finance course lesson "Price vs volume: how many customers can a discount lose?". Here we ask something else: what does Klasna get in return? > **Exercise:** The English 8-pack costs 5,200 UAH. With CHAT10 (10% off), how much contribution does one package leave after the tutor (390), video and AI (30) per lesson and the 2.5% payment fee? In UAH. ## Give and get **Nazar:** 507 per pack. Fine, but a sale is a sale. **Alex Tutor:** Only if the discount made it happen. A good discount is a trade: Klasna gives some price and gets something it values. Cash earlier. A longer commitment. More lessons at once. Lessons in quiet months. A new family it wouldn't otherwise meet. **Alex Tutor:** CHAT10 gets nothing a parent has to give. It rewards hesitation, and parents learn fast that hesitating pays. **Sofia:** And the bigger packages? 32 lessons are 580 a lesson instead of 650. **Alex Tutor:** That's a discount with a get: 18,560 paid today instead of 5,200, and 32 lessons committed instead of 8. The question is how much that commitment is worth. > **Exercise:** Which discounts **get something in return** for Klasna? Select all that apply. ## Who takes the 32-pack **Hanna:** Per lesson, the 32-pack leaves 145.50 and the 8-pack 213.75. Per package: 4,656 against 1,710. Which number matters? **Alex Tutor:** Neither on its own. Compare the 32-pack with what the same family would have done without it. How many lessons at the 8-pack margin earn as much as one 32-pack? **Nazar:** Last year, families who bought only 8-packs bought 2.4 of them on average, then stopped. **Sofia:** So 19.2 lessons, if nothing nudges them to commit for longer. > **Exercise:** How many lessons at the 8-pack's contribution (213.75 UAH a lesson) earn as much as one English 32-pack (4,656 UAH)? To two decimals. ## And whom it gives money to **Hanna:** Now the other kind of family. An exam year, they'll take 40 lessons whatever we do. Today they buy a 32-pack and an 8-pack. **Alex Tutor:** For them the 32-pack changed nothing they do; it only changed what they pay. The same discount buys commitment from one family and is a gift to another. **Sofia:** And we can't tell them apart at checkout. **Alex Tutor:** Not perfectly. That's why the package step stays moderate and why the 32-pack asks for something real, payment up front. A deeper cut would give more away to families like this one. > **Exercise:** An English 8-pack leaves Klasna 1,710 UAH of contribution (213.75 a lesson) and a 32-pack 4,656. A family would take 40 English lessons anyway. How much contribution does Klasna give away when it buys a 32-pack and an 8-pack instead of five 8-packs? In UAH. ## Quiet months **Nazar:** Then what about summer? July and August are dead. A 10% summer 8-pack? **Alex Tutor:** That one can buy something: lessons in months when tutors want hours and Klasna's fixed costs run anyway. It pays if it reaches families who wouldn't study in summer at full price. **Alex Tutor:** So fence it: 8-packs only, July and August only, stated dates. And watch who uses it. If it is mostly families who study every summer, it is a gift with a season attached. **Alex Tutor:** Pick the version of the summer discount that's fenced properly. > **Exercise:** Nazar wants a 10% summer discount on 8-packs to fill July and August. Which version fences it best? **Sofia:** Every discount gets a "for what" and a "for whom". > **Exercise:** Match each discount with what it can buy for Klasna. ## Your turn: a rule for support **Nazar:** Support will ask me what to do instead of CHAT10. I don't want them to lose sales. **Alex Tutor:** Give them a rule they can apply in a chat: first answer the hesitation, then offer a trade if the family needs one. **Sofia:** So: why they hesitate, then the package that fits, then a discount only for something in return. **Alex Tutor:** And a limit, so the rule holds on a busy Monday. > **Exercise:** Write the rule that replaces CHAT10 for Klasna's support team (3–5 sentences): what support does when a parent hesitates, when a discount is allowed, what it must get in return, and the limit. > **Key ideas** > > - A discount comes almost entirely out of contribution: 10% off the English 8-pack takes it from 1,710 to 1,203 per pack. > - How much extra volume a cut needs is covered in the finance course lesson "Price vs volume: how many customers can a discount lose?". Here: what does the discount **buy**? > - Good discounts are trades: prepayment, commitment, volume, quiet months, a new family. A code for hesitating buys nothing and teaches buyers to hesitate. > - The same discount buys commitment from one family and gives money to another: the 32-pack beats 2.4 eight-packs (4,656 vs 4,104) but gives 2,184 away to a family that takes 40 lessons anyway. > - Fence every discount (what for, for whom, when) and watch who actually uses it. **Alex Tutor:** Next time: different prices for different groups, siblings, students, displaced families and veterans, and the fences that make them fair. And Dana writes rules for her own practice. - Previous lesson: [Case: fix Klasna's exam-season price page](https://productovi.com/courses/pricing/exam-season-page-case.md) - Next lesson: [Segment prices with fair fences](https://productovi.com/courses/pricing/segment-prices-fair-fences.md) --- Productovi Learning. Free, no sign-up needed to read.