The fastest and most effective way for a company to realise its maximum profit is to get its pricing right. The right price can boost profits far quicker than increasing sales volume; the wrong price can shrink profits just as quickly.
The ingredients of profit are costs, selling price, and the unit sales volume. They must all be in the proper proportions if your desired profit is to be obtained.
Is your company big or small? Do you sell b2b or b2c? Are you the market leader or new to the marketplace? Wherever you sit you will all have one thing in common – the need to achieve the best price for your products to maximise both sales and profits.
The right price can boost profit faster than increasing volume ever will. The wrong price can shrink a profit just as quickly. You may understandably be wary of increasing prices for fear of alienating or losing customers but the result of not managing your price performance could be far more damaging.
Topics: Profit Maximization
Do you have a conflict in your business between the pricing team and sales department? Certain members of your sales team probably think that all your pricing manager cares about is higher prices – which can make it more difficult for some in sales to close deals.
Pricing Optimisation is a central part of your business – if it isn't then it should be! Everything from your marketing and sales to your product and operations should be used to either drive potential customers to make an order or support the loyalty of that customer once they’ve made a purchase.