Commercial discount and operational efficiency: beyond the final margin

You’re holding a project report in your hands, reviewing the freshly calculated margin.

Do you remember that project you sold a few months ago? Now, you have the final numbers in front of you: the achieved margin seems to confirm everything went according to plan. But then you pause, take a closer look at the data, and ask yourself: “What does this margin really mean?”

Does simply comparing the projected initial margin to the final result tell the full story of the project? Or is there more - something you might be overlooking? Sticking to this narrow perspective may mean missing out on key insights that could help you truly understand what worked and what didn’t.

The margin of a project is the result of various factors, but two play a particularly fundamental role: the commercial discount and operational efficiency.

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Commercial discount and operational efficiency: the pillars of margin

Commercial discount: this is the compromise made during the sales phase to close the deal. Perhaps you decided to offer a discount to make the price more competitive, break into a new market, or strengthen a client relationship. Whatever the reason, it’s a decision that directly impacts the margin.

Operational Efficiency: this is about how the team managed the project. If the team completed the work in fewer days than estimated, each day gained more value, potentially offsetting a discount given during the sales phase. Conversely, an inefficient team can nullify any benefits provided by the discount.

The next time you analyze a project, don’t just ask whether the final margin was achieved. Ask yourself how you arrived at that result. Every number tells a story, and understanding it can provide valuable insights for improvement.

This is why, to truly understand a project’s margin, you must look beyond the commercial discount and operational efficiency to include two other critical variables. Together, these four variables give you a comprehensive view of what went right, what went wrong, and where improvements can be made.

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The four key variables for understanding project margin

These elements fall into two main categories: sales strategies and operational management.

Sales Strategies

• Market positioning
  Market positioning acts like a compass: it guides you toward the right clients. If your company presents itself as a premium provider but targets clients seeking low-cost solutions, you’ll end up offering frequent discounts, eroding margins. Clear positioning attracts clients who understand and are willing to pay for the value of your work.
  A positioning mistake not only undermines a project’s margin but can also damage the company’s overall reputation.

• Sales strength
  Even with clear positioning, you need a sales team capable of defending the project’s value without resorting to discounts. Continuous training and deep knowledge of project details are essential for turning an offer into an investment perceived by the client, rather than a mere expense. A well-prepared team not only protects margins but also reinforces client trust.

Operational Management‍

• Accuracy in estimates
  If initial estimates are inaccurate, the project risks requiring more resources and time than anticipated, compromising the final margin. Analyzing historical data from previous projects is one of the most reliable strategies for improving estimation accuracy. Realistic forecasts help anticipate risks and ensure smoother project management.

• Team efficiency
  Even with accurate estimates, an efficient team is critical to maintaining — and potentially increasing — margins. Regularly monitoring team performance helps identify bottlenecks and resolve them before they negatively impact the project. Operational efficiency ensures not only adherence to timelines but also enhances the overall quality of work, maximizing the value of each workday sold.

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Discover what lies beneath the surface of your projects

These four variables — market positioning, sales strength, estimation accuracy, and team efficiency — are the keys to truly understanding margins. Simply observing the final margin is like looking at the surface of an iceberg: what really matters lies beneath.
Every number, every margin tells a deeper story. Learning to read it and act on the right points can make the difference between a project that generates value and one that drains resources. The challenge isn’t just to reach the margin but to maximize it relative to its potential.

With wethod, you can see beyond the surface. In the project reports and Insight section, everything is at your fingertips: a simple tool to explore what’s behind your numbers and discover how to improve your projects and margins.

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