- 80% of businesses’ profits suffered because price changes are too slow
- 87% of pricing professionals are worried about their ability to respond to future volatility
- 63% don’t have the ability to model the impact of price changes
10th July 2024 – Global research among pricing professionals reveals that 80% of businesses’ profits have suffered because prices couldn’t keep pace with rising costs and changing market conditions.
The study conducted by Flintfox, the intelligent pricing specialist, found that on average businesses estimated they lost $478,000 in potential profit as a result of not being able to change prices fast enough and 87% of pricing professionals are worried about their ability to respond to future volatility.
As market conditions continue to be challenging, businesses are attempting to adopt more sophisticated pricing strategies with mixed success. Most businesses now employ tailored pricing for different regions and sales channels to maximise revenue and margin opportunities, but according to the research, 64% find it challenging to roll-out their complex channel pricing and 62% struggle with regional pricing strategies.
In addition to the lag between market changes and pricing changes, respondents also believe that pricing errors have negatively impacted margins. Despite widespread digital transformation, 40% of businesses still rely on spreadsheets for pricing management to supplement their ERPs, leading to inaccuracies.
Nearly two thirds of businesses say they lack the ability to model price changes in advance, so critical pricing decisions are being made without an understanding of the likely impact.
John Moss, Chief Executive of Flintfox said: “In the face of ongoing instability driven by demand fluctuations and cost volatility due to supply chain disruption, businesses have learnt to adapt their pricing strategies. But the ability to roll out fast, responsive price changes still eludes too many organisations.
“Price is a critical decision and is one of the biggest drivers of profit. Given this Importance and the higher likelihood of public scrutiny, pricing should be higher up the corporate agenda and pricing professionals given the tools they need to manage margins effectively. In challenging times, businesses are often tempted to pause investment, but the cost of not investing in pricing technology is far too high.”
