Ready to grow revenues? Speak to a Price Consultant
Optimize Prices to Grow Revenues and Unlock Profits
Sales price optimization offers an immediate and sustained impact to revenue generation and profit realization.
But while the financial upside is significant, a thoughtful approach is needed to succeed.
Johnny Grow price consultants help clients calculate optimal pricing to confidently and predictably optimize prices for increased revenues and profits.
We also offer pricing-as-a-service whereby we bring a veteran team of sales, marketing, finance and data scientists together to implement the Pricing Blueprint and thereafter deliver price updates and ROI reporting.
Whether a project-based engagement or a recurring service, our Pricing Framework includes the below insights, accelerators and assets to achieve a predictable outcome.
Facts, Not Opinion
Price recommendations without supporting data are just opinions.
Johnny Grow performs price strategy and optimization research that shows how the Best-in-Class leaders (i.e., the top 15%) implement data-driven and fact-based price setting to achieve greater agility, extract more value from their goods and services, and drive more top line revenue and bottom line profit than their competitors.
We convert the research into quantitative benchmarks, qualitative insights and Evidence-based Best Practices to replicate the actions of the top producers, reduce risk and accelerate financial outcomes.
See the Strategic Pricing Research.
A Proven Process
Strategic pricing is best done with a framework.
The pricing framework defines how the company will use price to increase market share, revenue and profits. Some strategies go further and define how to penetrate new markets or defend markets from competitor encroachment.
The Johnny Grow Price Strategy and Optimization Blueprint is a four-step, end-to-end approach.
There are many repeatable strategies to consider and compare. Selecting the right one will shift your company from a subjective process to an objective and measurable price strategy and take the first step to using price as a revenue growth lever.
Companies that attain intelligent, dynamic and optimized pricing realize a sustained and magnified impact on revenues and profits.
Optimal sales price calculations come from a data model that statistically measures how customers respond to price changes. The model compares alternative scenarios to achieve financial goals, identifies optimal prices, and forecasts how changes impact revenue and profits.
It can also show how to capture the maximum revenue from a specific customer segment or a total addressable market. It can be adjusted to show how short-term changes or alternative scenarios impact or accelerate revenue generation or enable different profit driven goals.
Starting with price setting techniques designed for your industry is an essential prerequisite to aligning pricing with customer willingness to pay, calculating optimal amounts for customer segments or target markets, and maximizing market share, revenue and profit.
Price elasticity shows how changes in product price impact the quantity sold and company revenues.
While an elasticity model can find the highest price a customer segment will pay for a product or service, it can also show when lowering the sale amount increases total revenues.
Knowing the elasticity for items or item clusters creates powerful levers to confidently change prices and increase revenues and margins.
Our pricing service calculates elasticity, shows how to make products more inelastic and identifies the amounts that deliver the greatest upside revenue or profit to the company.
See the Pricing Elasticity Insights.
The Cost of Inaction
Dynamic pricing is a powerful but underutilized revenue growth lever for many companies. It requires specialized skills so companies often default to pricing based on their competitors or anecdotal experience.
However, that misses a significant and sustained revenue and profit growth opportunity.
Even small changes to average price deliver a linear impact to profits. It's simple math really. A 1 percent increase in price will generate a 10 percent increase in profit for a company with 10 percent profit margin.
Research shows the adoption of a data-driven price strategy with active optimization increases annual revenues by 2 to 8 percent and nearly all of the increase falls straight to the bottom line.
Pricing Optimization Technology
Trying to manage complex pricing data in spreadsheets is laborious, inefficient, prone to error and unlikely to surface the optimal prices to maximize market share, revenue or profit. The number of permutations and combinations make manual price setting impractical.
Pricing software replaces financial figures born from guesswork and untested assumptions with dynamic, data driven, fact-based recommendations delivered in real-time.
It harvests market, customer and competitor data. It analyzes a multitude of variables and data relationships. It creates elasticity models and applies algorithms to deliver fact-based optimal pricing recommendations.
Our research reveals the most important performance metrics. Our proprietary predictive analytics and Dashboards (built in CRM systems such as Salesforce and Microsoft Dynamics) deliver the right information to the right person at the right time – and make that information actionable.
The price optimizer dashboard shows the tradeoff among market share, revenue and profit for any given item sale amount. It displays key performance indicators (KPI) such as Revenue per Capacity Unit (RPU), shows how those KPIs align with customer value drivers and how the KPIs impact market share, revenue and profits when an amount is changed.
A price optimizer should continue to be used as long as calculated recommendations increase revenue and profits. That means if you are doing it correctly it's a continuous journey.
Most deployments start small with a pilot to prove the concept. But an incremental start only delivers an incremental benefit. To move the needle on the profit and loss statement or achieve competitive advantage you need to evolve to a transformational approach. And the best way to do that is to use a maturity model.
This approach will yield more value at each stage in the journey, create momentum and turn price setting into a core competency.
Pricing Strategy Consulting
If you are looking for help with selling price optimization, we have some options.
Visit the Price Consulting Insights Hub for expert recommendations, best practices, research findings and supporting technologies.
Or for professional help, schedule an introductory call with a strategic price consultant using the form below.