Ramped pricing
Also called Ramp deal, Stepped pricing
Ramped pricing charges a different amount in each year of a multi-year contract, usually rising from a discounted first year.
Why it matters to a budget owner
Vendors offer ramps to win the deal: a low first year, then steps up. The headline discount is real, but later years cost more.
Record each year separately. A single annual figure understates the later years and makes next year's budget too low.
What to record
- Each year's amount
- Any discount and when it ends
- The total across the term
Frequently asked questions
Is a ramp deal a good deal?
It can be, if you expect your usage to grow into it. Compare the total across the term, not the first-year price.
General working knowledge about commercial contracts, not legal advice. Your own agreement governs.
Glossary
Look up related terms
- Annual contract value (ACV)Annual contract value is a contract's average yearly value: the total contract value divided by the number of years.
- Total contract value (TCV)Total contract value is everything a contract commits you to pay over its full term, including one-off and recurring fees.