Impact Pricing Podcast

Memecast #48: Small Improvement

I’m going to try to do a little math with you on this podcast, and imagine we have a company that normally makes a hundred million dollars in revenue. They’ve got costs of $90 million all in. So, they’re making $10 million in profit. And that’s not unrepresentative, that seems pretty reasonable for a lot of companies.

But what happens if we could increase or improve our pricing by 1%? So instead of a hundred million, what if we got 101 million in revenue? Our costs don’t really change so instead of 10 million in profit, now we’re making 11 million in profit. That 1 million in improved pricing went straight to the bottom line. And in the example I just gave you then, a 1% improvement in pricing can lead to a 10% increase in profitability.

This is huge.

“A 1% improvement in pricing can lead to a 10% increase in profitability.”

– Mark Stiving

We should be looking for small places where we can increase pricing because every dollar, when we improve our pricing, goes straight to profitability.

We hope you enjoyed this memecast. If you have any questions or feedback, please email me [email protected].

Now go make an impact.

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Tags: Accelerate Your Subscription Business, ask a pricing expert, pricing metrics, pricing strategy

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