Insights & Tips

Already a subscriber? Login

Become a subscriber and unlock an information arsenal focused on making your pricing efforts more effective.

One Deceptively Simple Trick for Boosting Your Margins

In Identifying and Capturing Profitable “Quick Wins”, we explain 15 strategies and tactics for boosting margin dollars without a investing a lot of time or money. One of the strategies discussed in the training session is deceptively simple and almost seems too easy:

Remind your salespeople why they shouldn’t be “rounding down” the prices they’re quoting.

Now, before you dismiss this strategy as being too rudimentary and basic to be very effective, consider the underlying dichotomy it addresses…

On one hand, as pricing professionals, we’re extremely protective about every nickel and dime of price…because we’re acutely aware of just how much impact those nickels and dimes can have on the bottom line.

On the other hand, our salespeople will often readily round off or give away nickels and dimes of price…because to them, those nickels and dimes just seem so inconsequential relative to the top line.

As pricing professionals, we understand the waterfall intimately. We know what a dollar in revenue typically means in terms of gross margin. And, we know what a dollar in gross margin typically means in terms of net profit.

So naturally, we know what a dime in price could mean to the bottom line. As pricing professionals, we can’t help it—we have the basic waterfall formula embedded in our brains!

But do our salespeople understand these dynamics, too?

Do our salespeople really know why a nickel or dime in price is actually a big deal? Do they really understand how top-line revenue dollars turn into bottom-line pennies as they cascade through our cost structure?

Or are we just assuming that they know?

The point is that when our salespeople give away nickels and dimes, it may not be due to ineptitude or nonchalance on their part. It may simply be a matter of having a different reference in mind, and lacking specific knowledge as to how revenues translate into profits.

And in that case, a little reminder…plus a little education…can go a long way.

Get Immediate Access To Everything In The PricingBrew Journal

Related Resources

  • The Essence of Strategic Pricing

    It's easy to fill your to-do list with all sorts of tactical pricing tasks. But if you're only focusing on those, it's hard to generate significant results. View this recorded training seminar and learn about tackling the most powerful and effective aspects of real strategic pricing.

    View This Webinar
  • Getting Your Salespeople to Price Better

    Chances are, the behavior of your salespeople will ultimately determine whether your pricing strategies are effective or not. In this on-demand training seminar, learn proven approaches and strategies for getting your sales team to price and discount far more effectively.

    View This Webinar
  • Exploring the Future of the Pricing Profession

    Pricing is a specialized function and it can be difficult to get a read on the health and status of where the field is headed. Kevin Mitchell of the Professional Pricing Association provides his perspectives on the state of the pricing profession.

    View This Interview
  • Step-by-Step Marketing Research for Strategic Pricing

    In this step-by-step tutorial, learn how to conduct marketing research---the only reliable way to gain the meaningful and actionable insights you need for effective strategic pricing.

    View This Tutorial