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Pricing Analysis

On Cloud 9 Accounting Pricing Analysis

Price Analysis, Questions?
 

What do you charge?

Too little, not enough profit

Too Much, not enough Sales

Pricing is s a mixture of Art and Science

Pricing

 

The price of a Product/Service is about the value you bring to someone, not simply Price. The more value a product/service delivers, the higher the price.
 

Please bear these two quotes in mind when thinking about your price


“Sales are vanity and profit is sanity” & “Anyone can sell something for nothing.”

We have 25 Year of pricing experience in delivering value and profit via pricing, changing the price of a product but £1 and delivering £100k’s in a week.


A plumber increases his day rate by £5 per hour and takes home £200 per day, 25% more (with no impact on demand)


Value Pricing


We can make more money for you, pricing is about value, and you need to be valued correctly.

Establishing the value of your goods/services is hard, but basically, what would you pay to get what you want or save you time and money.


Not all sales are good; walking away from a deal that makes you no money is the correct thing to do.

 

Remember, Profits are sanity, and Sales are vanity; anyone can sell something for nothing

Price & Elasticity

Price and volume are connected, raise the price, and the volume goes down, reduce the price volume goes up, this is called Price Elasticity

E.g., 1,000 units being sold

Price is £100 then reduced to £90, a £10 saving/10% reduction

Volume in sales go from 1,000 to 1,250, a 25% increase

Elasticity = 2.5

For every 1% reduction in price equals a 2.5% increase in Volume

Lost Leaders

Where a product is sold for less than its profit margin/cost.

So why do it?  Get more volume, get the customers or encourage customers to buy more ancillary products at a higher margin.

 

Basket Analysis (BA)

The analysis of what people put in their baskets, understanding how your customers spend money with you will help you leverage their basket to increase your sales and margin