SM1.0 How 1% Price Change Gave 11% Profit Increase

Price is a major determinant of the profitability of your business!  A price change of as little as 1% can often lead to profit increases of up to 11%.  A consultant study across 1,200 major businesses found that a 1-2% increase in price, assuming demand remained constant, on average would have increased the company’s profit by 11%. Clearly, this could be a quick boost to your company’s profitability.

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For a quick example of the impact of a price change, consider a business turning over $500,000 per year.  Let us further assume that it makes a 5% profit on that, which gives it a profit of $25,000. If it increased its price by 1%, and assuming demand remained constant, that would lead to an extra $5,000 in income. This extra $5,000 over the original $25,000 is a 11% improvement.  This is a yellow belt article.   

Level 4: Sales

  Improve sales performance – double your Sales and triple your Profits. With YOUR specific issue in mind, select the area below that best fits. Note: Campaign, Skills Module or Leader’s Briefings signup may be required for some articles Drill down to the article that provides the solution. Following are a number of articles covering […]

5 Whys Meets Sales Funnel

The sales funnel concept refers to the process of tipping sales “leads” into the top of a “funnel”.  They then progressively move through the sales process ideally converting them to a sale at the bottom of the funnel.

The 5 Why technique is a method of working our why something is not working or has gone wrong.  As there is a great deal of uncertainty in the Sales Funnel process, applying the 5 Whys to sort through the unknowns can be useful.  yellow belt

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