A 1 percent improvement in pricing can lead to better profits, according to a new survey by Deloitte LLP.
The survey results came from a recent webcast in June by Deloitte on pricing improvements. Deloitte polled the 950 business professionals listening to the webcast, and found that 82 percent of them believe a 1 percent pricing improvement can boost profits. However, 22 percent of the survey respondents indicated that their company does not pursue pricing management strategically.
Approximately 24 percent of the respondents said they are now working to improve pricing after slashing prices during the recession.
“Pricing may be the most powerful lever that managers can pull to give their businesses a competitive edge,” said Julie Meehan, a leader in Deloitte’s pricing and profitability management practice and co-author of the recently released book, Pricing and Profitability Management: A Practical Guide for Business Leaders. “No matter the size or type of business, a small change in pricing can have big, long-term impacts on its bottom line. To ensure the impact of pricing decisions is positive, executives should stop taking a scattershot approach to pricing and start understanding it for the refined, strategic discipline it is.”
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