Why Pricing Matters

Pricing Is Crucial – For Many Reasons:

  1. Leverage: For many companies, a 1% increase in average prices will produce a 10% increase in profitability.
  2. Fast results: Profitability improvements from better pricing can be realized almost immediately – as opposed to years (or, worse, never) from other initiatives.
  3. Morale and productivity: Improved pricing leads to increased profits without the detrimental effects on both morale and productivity that cost-cutting tends to create.
  4. ROI: Pricing improvement initiatives typically return three to five times the investment within 12 months.
  5. Probability of success: For many established companies, the odds of increasing profits are higher through better pricing than through additional market share gains, which frequently involve price discounts and free or low priced services and support.
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