Discounted First Payment Rate
How often you need a discount to close — price doing work your value proposition should.
What is it?
Discounted First Payment Rate is the share of newly acquired customers whose first payment included a discount. It tells you how often you need to concede on price to close, independent of how large the concession is.
A high, sticky rate is a signal that price is doing work your value proposition should be doing. If nearly every new customer needs a discount to sign, list pricing or positioning — not the discount itself — is usually the real issue.
How to calculate?
Divide the number of new customers whose first payment carried a discount by the total number of new customers in the period. Forty percent means two in five needed a discount to sign. Define 'discount' consistently — a promo code, a negotiated rate, a first-month deal.
Read it beside the average discount size: a high rate on small discounts is routine promotion, while a high rate on large discounts is a pricing problem.