From the course: Measuring Team Performance
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Pricing performance
From the course: Measuring Team Performance
Pricing performance
- Pricing is a powerful lever. A 1% change in top line price can result in a 10% bottom line impact. This metric needs to be monitored very closely. Imagine I sell my product for a hundred dollars. I make a hundred dollars of revenue. On every one I sell, I make $10 of profit. Let's say I decide to decrease price, just by a dollar. So I go from a hundred dollars a unit down to 99, no big deal. Well, that $1 comes off the bottom line too, and I went from making $10 per unit to $9. I went from a 10% margin down to a 9% margin. It has a huge impact. Marketing and sales functions are usually responsible for pricing decisions. You have to monitor the decisions that they're making. Monitor product price, both as a trend and in relation to competitive offerings. That lets you know where you're positioned in the market. It gives you key insights into why customers are or are not buying your product. If you're priced way above…
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