Poll shows a 1% pricing improvement can boost profits

"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 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."

Pricing strategy

When describing their companies' current pricing management, 22% indicate that their company doesn't pursue pricing management strategically. Roughly one-quarter (24%) are working to improve pricing management after slashing prices during the recession.

"As simple as it may seem to focus on more fact-based pricing decisions, leaders inside and outside of sales should focus on price-value selling and a disciplined process for capturing price in transactions," added Larry Montan, a leader in Deloitte's sales force effectiveness practice and book co-author. "It takes cross-functional and C-suite involvement to confirm that the pricing decisions made are in the best interest of the company and will positively influence customer behaviour."

More than 950 business professionals from the consumer and industrial products, financial services, technology, media and telecommunications and other industries responded to the polling questions during the webcast, "Pricing and Profitability Management: Finding Hidden Pockets of Profit," held on 15 June 2011.