Management teams and owners typically focus on efficiency measures and cost cutting when trying to improve profitability. What if enhancing the pricing process will have the same effect or even increase profits more? Wouldn’t it be better to first determine whether cutting costs or a better priced offering is the best option?
Can your company increase profitability through improved pricing? What are the revenue leakages in the pricing process and what is the potential from changing the price model? These are questions Pricing for Profit Estimate quickly answer!
Purpose and goal
The purpose is to promptly find out whether it is profitable for a company to develop its pricing. The goal is to find which pricing areas could be developed and how much these developments can increase the profit margin.
Pricing for Profit Estimate is primarily a product for management teams, boards and investors. Understanding the pricing potential will help select the measures to take. For investors this information is useful when deciding on an investment opportunity. For boards and management teams, it will help decide whether to focus on cutting costs or improve revenues to reach profitability goals.
How do we do it?
Pricing for Profit Estimate takes 2-3 weeks. We start with facts gathering. Examples of information that we collect are: the business strategy, pricing strategy, customer segmentation, the structure of the customer offer, competition, organization, follow up processes, and the structure of the value chain.
We get the information through analysis of transaction data and costs as well as through in depth interviews with key people in the company. The purpose of the interviews is to identify main areas that need to be developed and the challenges linked to implementing these improvements.
We then compare the results of our analysis with similar projects and how these have improved the business results through implementing the suggested measures.
What are the results?
The Pricing for Profit Estimate project results in three main deliverables: the potential improvement of the profit margin, the main development areas that can generate this improvement and the challenges linked to the implementation.
The result is to be used as a decision support for investors in the process of buying a company or for the board or management team before making decisions regarding the development of the company’s pricing.