Pricing roadmap, next quarter
- First: Raise list price 3% on the long tail of products.
- The order is sensitive to: none of the tested weightings.
Financial Intelligence
Revenue and profitability
Revenue leaks quietly, and it is hard to see which customers, products or sites actually make money.
Demonstration: Brightwater Software (fictional) · Software. Fictional data and a scripted answer.
The situation
- Organisation
- Brightwater Software (fictional)
- Who is asking
- Chief commercial officer with the CFO
- Industry
- Software
- What happened
- Margin has slipped and the leadership team has five candidate pricing actions but time for one this quarter.
The question asked
Which pricing action should we take first, given what we care about?
What it reads, and who can see the result
- Revenue and margin by product and customer exportLast four quarters.
- Discount history exportAverage discount by deal size.
- Churn and renewal data exportFor customer-risk scoring.
- Reads
- Aggregated revenue, margin, discount and renewal data by product and segment.
- Does not read
- Individual customer contracts or personal data.
- Permission
- Commercial finance read access.
- Who sees it
- The CCO, CFO and the pricing council.
Try it
Change how much each criterion matters. The ranking is recomputed, and the page tells you whether the leader would survive a different judgement.
- 1Raise list price 3% on the long tail of productsSmall accounts, little negotiation.Margin impact: 3Low customer risk: 4Speed to effect: 4Low effort: 43.67
- 2Remove the discretionary discount tier above 15%Touches large deals under negotiation.Margin impact: 5Low customer risk: 2Speed to effect: 3Low effort: 33.33
- 3Bundle onboarding services into the premium tierCreates value to charge for.Margin impact: 3Low customer risk: 4Speed to effect: 2Low effort: 23.00
- 4Re-price the top five accounts at renewalBiggest effect and biggest risk.Margin impact: 5Low customer risk: 1Speed to effect: 2Low effort: 22.67
- 5Retire two loss-making productsSlow, with customer migration.Margin impact: 4Low customer risk: 2Speed to effect: 1Low effort: 12.33
Leader's margin over the next option: 0.33. The leader holds under every weighting tested.
The answer
Simulated answer. Written for this fictional case, not produced by a live model. Only the figures in it are computed, from what you decided above.
With these weights, the top-ranked action is: Raise list price 3% on the long tail of products (score 3.67).
The ranking depends on what the leadership team values. The order is holds under the weightings tested; the leader would change if none of the tested weightings [S1][S2][S3].
A weighted score is a way to make a judgement explicit, not to replace it. The lead over the next option is 0.33 on a five-point scale, which is small enough that the team should discuss the top two before committing.
Relies on: S1 · Revenue and margin by productS2 · Discount history by deal sizeS3 · Renewal and churn summary
Review and approval
The CCO and the CFO decides. Approving the ranking records which action leads the pricing roadmap this quarter. It does not change any price.
Ready for the reviewer.
In the product this is a different person with the right permission. Here you play that role to see the rule.
What it produces
Decision basis
- Criteria, weights and scores are recorded with the approval.
Limits of this example
- The scores are illustrative judgements, not measurements; a real use would document where each came from.
- Weights are the team's values and are meant to be argued about.
- This is a scripted demonstration on fictional data. No model was called and no real organisation, person or result is shown.
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