There are only three ways to increase profits: Increase Sales – can you produce any more? Decrease Costs – can you reduce any more? Raise Prices – can YOU actually do that? In this video we are looking at Break-even Points and Price Elasticity – really useful for measuring the extent to which a change in price will affect buyer behaviour.
Watch the video for background information about the 9 Pricing Strategies, feel free to request the templates firstname.lastname@example.org. I am happy to share.
1. Recognise your position on the Price Sensitivity scale.
2. Plot your product or service breakeven point. This is just as important if you are a service based industry.
3. Calculate your current Price Elasticity of Demand. This is measure of your marketing activity. Use this as a base for future pricing activities, primary research testing and research
Please do share your experiences with these models in the comments below. I am building a portfolio of small business case studies and would love to include examples of what has worked well for you.
PS – If you need further help then give me a call on 07962 626604 to arrange a Skype session with me.
PPS – This exercise forms part of a series of workshops on Profitable Pricing