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Capture Pricing Opportunities
and Improve Your Bottom Line

Reducing your operating expenses, increasing your sales volume, and reducing your cost of goods sold all deliver bottom line profit. But no element of your business mix can deliver more impact to your bottom line than strategic price.

We have worked with hundreds of distributors and manufacturers to deliver margin gains of 2 to 4 points or more. How? By helping our clients implement a structured approach to pricing that avoids these common and costly pricing errors and approaches:

  • Charging small customers less than they are willing to pay
  • Missing the opportunity to charge premiums on products that are less sensitive to price
  • Allowing exceptions to drive pricing architecture
  • Using a cost-plus pricing approach

Making small changes to your Pricing Strategy typically delivers worth 2 to 4 margin points or more. That’s $200,000 to $400,000 per year per $10 million in affected revenue! Hear what our clients have to say.

The numbers speak for themselves

Take a look at the invoice data of a typical SPA client before they implemented Strategic Pricing and see for yourself. If you are not using Strategic Pricing, chances are good that your company’s data mirrors what’s below. If you’re still skeptical, answer a few quick questions and we will help you to quantify your company’s specific pricing opportunity.

The combination is typically worth 2 to 4 margin points, or $200,000 to $400,000 per year per $10 million in affected revenue.

Common Pricing Error #1: Undercharging small customers who are less sensitive to price

Scatter plot graph of Customer Sales Volume versus Price Index
source: invoice data of a typical SPA client prior to Strategic Pricing


Common Pricing Error #2: Missing the opportunity to charge premiums on products that are less price sensitive

Scatter plot graph of SKU Sensitivity versus Price Index
source: invoice data of a typical SPA client prior to Strategic Pricing

Companies that work with SPA have seen the following percentage gains in operating profit.
arrayed by margin gain and baseline operating profit level; all units in percent (%)

Percentage Gains in Operating Profit by Margin Gain
and Baseline Operating Profit Level
Margin
Gain
Current Pre-Tax Operating Profit as a % of Sales
0.5%1%2%3%4%5%6%7%8%9%10%12.5%15%17.5%20%
1%2001005033252017141311108765
2%400200100675040332925222016131110
3%6003001501007560504338333024201715
4%80040020013310080675750444032272320
5%1000500250167125100837163565040332925
6%12006003002001501201008675676048403430
7%140070035023317514011710088787056474035

How many margin points is your company
leaving on the table?

Click here to find out. This free Pricing Opportunity Profile takes only a few short minutes to complete and will tell you the likely impact Strategic Pricing can have on your company’s bottom line.