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Blog: The Impact of Pricing Is Real | Stephan Liozu

The power and impact of pricing on the bottom line cannot be denied nor ignored. There exists a large body of academic and practitioner research demonstrating the positive impact that pricing can have on firms’ gross margins and also on bottom line profits. Pricing is actually considered by lots of experts as one of the most powerful levers of profit improvement. McKinsey reported that a 1% price increase, all things remaining equal, increases operating income by 8%. Other consultants also report the impact of pricing investments in strategies and in software as shown below.

Simon-Kucher & Partners   35% Increase in EBITDA for firms with higher pricing power.   2012

Deloitte   3.2%   Average operating margin increase of 3.2% for pricing initiatives after 18 to 24 months of implementation.   2012

Deloitte   26%   Companies that are pricing leaders are 26% better at managing true profitability.   2012

Gartner   2 to 4%   Pricing optimization software leads to average total revenue improvement of between 2 to 4% and a payback of under 2 years.   2012

Innovation Insights   15%   By 2015, best-in-industry enterprises will increase revenue by up to 3% and profits by up to 15%, due to improvements made using price optimization technologies.   2012

Read complete blog here:

https://www.linkedin.com/pulse/article/20141107164127-1716378-the-impact-of-pricing-is-real

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