Profitability
Pricing is the fastest lever you own — and the least modeled
The problem
Prices are usually set once, adjusted by feel, and defended by anxiety about losing customers who may not be profitable anyway.
Why it matters
A 3% price increase on $5M with 35% gross margin adds roughly $150K of gross profit and requires no additional labor, inventory or overhead.
How to know if you have this
- Prices have not changed while wages and materials have
- Discounting happens at the rep level without policy
- You cannot state the margin on your last ten quotes
- Price increases are announced without modeling volume risk
How Advisory Motion solves it
- 01Model the price change required to hold margin against actual cost movement
- 02Quantify the volume you could lose and still be better off
- 03Segment customers by profitability before deciding where increases land
- 04Set a discount policy with an approval threshold
Illustrative example
Losing 8% of volume was the better outcome
The model showed a 6% increase remained profitable even if 12% of volume left. Actual attrition was 3%, and the business gained capacity along with margin.
Illustrative composite · not a client identification
Where this connects