The discount filled the schedule. Did it leave enough money?
A 10% price cut can remove 25% of the money left from a job. Include the promotion bill and available crew hours before deciding what to offer.
TL;DR
- Calculate the money left per completed job after costs that change with that job. A price discount comes directly out of that amount when costs stay the same.
- Include the extra advertising and promotion costs. More jobs can still leave less money than the work you expected without the offer.
- Check the required crew hours. A promotion that needs seven extra jobs cannot work as planned if you can serve only four.
- The numbers below are invented. Use your own job costs, expected baseline and capacity; this is not evidence that a discount will create demand.
Your office has filled the quiet days with discounted appointments. The calendar looks better. Before extending the offer, check how much those appointments leave after the work and promotion bills.
A discount changes two things you control: the price and the amount left from each job. Whether it changes demand enough to compensate remains a separate question. Start with the calculation you can inspect.
A small price cut can take a larger share of contribution
Suppose a defined service sells for $500. Its job-dependent costs are $300: the labor, materials and other costs you expect to incur because you perform this work. That leaves $200 before fixed overhead, taxes and marketing.
Reduce the price by 10% to $450 while the $300 cost stays unchanged. The job now leaves $150. The price fell 10%; the contribution fell 25%.
| Invented job | Regular price | Discounted price |
|---|---|---|
| Customer price | $500 | $450 |
| Job-dependent cost | $300 | $300 |
| Contribution before marketing and fixed costs | $200 | $150 |
This contribution calculation follows the price-minus-variable-cost structure used in the SBA's break-even guidance. It is not net profit. If your labor expense stays fixed across these jobs, decide with your bookkeeper which costs belong in this particular decision. Do not subtract the same wage expense here and again elsewhere in the comparison.
The dispatch and margin guide explains why a job's travel and service requirements also matter. A promotion restricted to nearby work can have a different cost from the same offer across the whole service area.
Include the promotion bill and the work you expected anyway
Assume you would have completed 10 full-price jobs without the promotion. That is an assumption about an alternative outcome, not something an ad dashboard can verify. At $200 each, those jobs would leave $2,000.
Now assume every job in the promotion group receives the discount, including customers who would have bought anyway. The complete additional promotion bill is $500, including its media and any added fees. Each completed job leaves $150 before that bill.
To match the assumed $2,000 baseline, the promotion needs:
($2,000 baseline contribution + $500 promotion cost) ÷ $150 = 16.67 completed jobs.
Whole jobs require rounding up: 17 completed jobs. Counting 17 inquiries or 17 booked appointments would answer a different question.
| Completed discounted jobs | Contribution after the $500 promotion bill | Difference from the assumed $2,000 baseline |
|---|---|---|
| 10 | $1,000 | −$1,000 |
| 14 | $1,600 | −$400 |
| 16 | $1,900 | −$100 |
| 17 | $2,050 | +$50 |
| 20 | $2,500 | +$500 |
This example requires seven more completed jobs than the baseline. It does not prove the promotion caused seven additional jobs. Weather, timing, other marketing and ordinary demand could change the total. Record your baseline assumptions before seeing the result, and preserve their uncertainty.
Check whether the schedule can carry those jobs
Suppose each job uses 1.5 crew hours, including the travel and preparation you assigned to it. Ten jobs use 15 hours. Seventeen use 25.5 hours, an increase of 10.5 hours.
If the shop has only six spare crew hours, it can add four comparable jobs. Fourteen discounted jobs leave $1,600 after the promotion bill, which is $400 below the assumed baseline. A full calendar within those hours would still miss the financial target.
Overtime can change the answer again. If the added jobs require a higher labor cost, the $150 contribution no longer applies to all of them. Recalculate by job group rather than using the cheaper cost for every appointment.
Use the blank service-mix planner to compare your own work types and hours. National housing data does not supply the price, cost or capacity inputs for your shop.
Define what the customer actually gets
Write the service scope before choosing the headline discount. State the included work, eligible equipment or job types, service area, expiration and exclusions clearly. Your estimator and dispatcher need the same definition as the ad.
Then check three situations in the price sheet: a customer who would have bought at full price; a genuinely additional job during spare capacity; and a job that displaces higher-contribution work. They can carry the same advertised price and have different business consequences.
Do not automatically count a future repair, membership or replacement as compensation for today's discount. Keep an expected future sale separate until its price, cost and likelihood have a defensible basis. A promise of lifetime value does not pay this week's payroll.
Run this check before approving the offer
- Choose one clearly defined job and verify its current price and job-dependent cost.
- Write the completed-job baseline you are comparing against and why it is plausible.
- Include every added promotion cost once, including setup or management charges that apply.
- Calculate the required completed jobs and the crew hours they consume.
- Check the result if you sell fewer jobs or incur higher costs, and set a review date before launch.
A cash check belongs alongside this calculation. Even work that eventually leaves a positive contribution can need funding before the customer pays. The advertising cash-flow example shows that timing separately.
What this doesn't cover
This is an original arithmetic example, not a pricing experiment, customer study or forecast. It assumes comparable jobs, an unchanged cost per job and a stated baseline. It excludes fixed overhead, taxes, collection losses and the timing of receipts. It does not estimate price sensitivity, prove incremental demand or recommend a discount for your market.
Questions owners ask
Is a discount always a bad choice?
No. Spare capacity, a defined customer need and a controlled cost can make an offer worth testing. This example shows the conditions it must meet; it does not measure whether your customers will respond.
Can I compare a percentage discount with a fixed-dollar offer?
Convert both to the actual customer price for the same scope. Then calculate contribution and the full promotion cost. A percentage headline alone hides the amount you give up.
What if the objective is to introduce a new service?
Record that objective and its spending limit explicitly. Track the later evidence needed to judge it. Calling the promotion an introduction does not remove its cost or justify expanding it automatically.
Sources and method
- SBA: Break-even point, read October 16, 2026, supplies the general contribution and break-even framework.
- All prices, costs, job counts and hours are original invented teaching inputs, checked arithmetically. They are not Lonta client results or an industry benchmark.
Lonta AI provides managed advertising. For a proposed offer, we would want the job scope, available hours and full campaign cost stated before discussing more traffic. Bring those constraints to a strategy review, or use the calculations above with the contractor you already work with.