This post originally appeared on INSIGHT2PROFIT.com.
Welcome back to INSIGHT2PROFIT’s 2019 Pricing Challenge! Each article covers a common pricing challenge faced by businesses and provide some tips to help improve your profitability.
Now that we’re about halfway through 2019, let’s talk about the plan you set for the year. How have you performed thus far relative to your plan?
If your performance hasn’t matched your financial projections for this first part of the year, what happened? Maybe you’ve looked at your financial reports, and you see that your customer or product mix isn’t what you were expecting, or that you have been impacted by tariffs, and your profitability has suffered because of it.
That’s a start – having a rough idea of the shortfall – but you need to get to the root causes. Has a shift in your mix driven down margin rates? Are you falling short of plan due to a volume slowdown, or are pricing shortfalls eroding your revenue growth? How does that vary by market segment or by salesperson?
Analyzing the gap down to the customer-SKU level can yield clear, actionable intelligence about your problem. Well-run businesses have a strategy, and the budget is the road map to execute it. Planning at the same level of granularity as your sales allows for a healthier understanding of what’s happening within your business, why, and how to act. By having a detailed budget, you are creating a source of accountability for your team and a path for success for your business.
Accurate revenue planning and measurement is tough to do, but it’s one of our specialties. Every engagement includes strategy, a client-specific model, a detailed plan and road map to execute it, and measurement to achieve the set goals. All while leveraging our DRIVE technology platform.
To learn more about how your company can improve results for the remainder of 2019, schedule a time to talk to one of our profit experts today.
What’s your pricing challenge? Talking about pricing challenge, with tariffs ever present in the news, you may want to download our 3 Steps to Navigating Tariffs Guide.