Monetization Playbook #65 —Small increases in price can leverage large increases in profit

Small increases in price can leverage significant increases in profit

Instituting core policy pricing results in powerfully consistent outcomes for your business

Why?

–a 1% increase in your price can result in a 10% increase in your profit!

The example above shows a typical overview of the financials. 

Sales less variable–(marginal costs of selling product such as cost of goods)–less fixed expenses (salaries, office, etc.)

The original net profit of 10% - can be increased by 10% to 11% by increasing the sales price from 100 to 101. 

–Yes, a 1% increase in price can lead to a 10% profit increase! 

The 1% Rule  

Often overlooked entirely, or at best, seen as overly simplistic, the 1% rule is a powerful policy tool in your monetization execution strategy. 

Best utilized by linking your price to an anchor, such as price inflation - consumer price index or other internal markers, you can power your profits with these minor tweaks.