Price Exception Rate
Percentage of deals requiring a non-standard pricing approval outside defined discount thresholds
What is Price Exception Rate?
Price exception rate is the percentage of closed deals that needed approval to go outside standard pricing. It shows how often the normal price list is bypassed.
Frequent exceptions can mean pricing is out of line with the market, or that reps are giving away margin too easily.
How this KPI is measured
- Function
- Sales
- Sub-function
- Pricing
- Industry
- All Industries
- Type
- Lagging
- Impact
- Financial control
- Unit
- %
- Measurement frequency
- Monthly / Quarterly
- Formula
- (Deals requiring price exception approval / Total deals closed) × 100
How to calculate it
Divide deals requiring price exception approval by total deals closed, and multiply by 100.
For example, if 45 of 150 closed deals needed an exception, the rate is 30%.
Split by rep, product and customer type to see where exceptions concentrate, and look at the size of the exceptions as well as their number.
Where it is used
Testing price lists
See whether standard prices are competitive.
Controlling discounting
Spot reps who rely on exceptions.
Improving approvals
Assess how the approval process works.
How to improve it
Tips and common mistakes
- A high rate often points to a pricing problem, not a rep problem.
- Track the cost of exceptions in margin.
- Some exceptions are strategic and fine.
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