A tremendous profit lever…

For a company achieving a 5% Net Margin with 2/3 fixed and 1/3 variable costs: a 1 % improvement in price translates into a 20 % increase in profit.

1% price ⇒ 20% profit

This effect is 50% higher than the effect of a 1 % increase in sales volume or a 1 % reduction in fixed costs and more than 3 times higher than the effect of a 1% reduction in variable costs.

Profit increase resulting from a 1% improvement in…Price impact on profit
Operator with 5% Net Margin, 2/3 fixed and 1/3 variable costs

…triggered by multiple benefits…

Pricing brings organizations an additional 2.4% Net Margin on average. This represents a 2.4 million euro additional profit every year for a 100 million euro turnover company!

Key benefits brought by Pricing

  • x 2 Faster Quotes (e.g. from 3 weeks to less than 1 week in case of complex deals)
  • +20% Sales Efficiency (more time for your sales team to develop new business)
  • +16% Win Rate (in acquisition and business development)
  • +24% Margin by Deal (in acquisition and rerating)
  • +12% Customer Retention
  • 100% Forecast Accuracy
  • Eradication of Billing Errors

…but Pricing is challenging!

Despite its power, the pricing lever still remains untapped by many companies because it has not yet been identified as a key area of performance improvement or because a consistent plan to improve pricing capabilities has not yet been defined.

Open Pricer can help you improve your pricing capabilities through a Pricing Power Assessment.