The target chooses the discount

Every November opens with the same conversation, and I have sat in it from more than one chair.

The annual number is fixed. It was fixed in another season, by people who are now busy with something else. The forecast, updated last week, is short of it. The gap between the two is on the screen.

Then the arithmetic starts. How much extra volume closes the gap. What discount produces that volume, which comes from an elasticity somebody estimated once, or guessed, in a meeting whose notes nobody can find. Divide, round to something that fits on a banner, and the answer is thirty per cent.

Nobody in the room chose thirty per cent.

Nobody said: this is what the product is worth in November. Nobody looked at the margin and asked what depth the business can carry for a month. Nobody asked what a customer who has never paid full price is worth next year. The target chose the discount. The gap set the depth, the elasticity supplied a reason, and the room supplied a nod.

This is what happens when nobody decides. The most consequential pricing decision of the year is made by subtraction. Nobody was careless. The gap asked a question in the only language the room shares, and the room answered it in that language.

Now the customer is about to be trained by that number. She will see thirty per cent, and remember it, and next year she will wait for it, taught what the brand costs by a figure that was never a pricing decision at all.