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.