How far can we raise prices?
Not in theory: from which volume loss the operation starts losing money.
OFFER · PRICE–VOLUME–MARGIN DIAGNOSIS
You have to settle a price, and you do not have a quarter to think about it.
A supplier has raised its prices. A competitor has slashed its own. A key account is asking for a discount your salesperson is ready to grant. Or margin has been eroding for three quarters without anyone knowing exactly where.
These decisions are not handled with a growth plan: they are handled in two to three weeks, with a number. How much volume can you lose before a price rise costs you money? That number can be calculated, and it changes the conversation with your sales team.
WHAT THE DIAGNOSIS SETTLES
Five questions that cannot wait.
What does this discount cost?
Three points of discount often consume more margin than a team imagines.
Where is the margin going?
Price, product mix, discounts, input costs, overheads: the four causes are not corrected the same way.
Should we pass on the cost increase, and on what?
Rarely across the whole range, almost never in the same proportions.
At what volume do we break even?
With today’s costs, not those of last year’s budget.
HOW WE PROCEED
Five steps, two to three weeks.
The format is deliberately short. A pricing emergency that takes six weeks to instruct is no longer an emergency: it is margin already lost.
- 01Frame the urgency: the decision, its date, who applies it
- 02Rebuild the cost structure
- 03Model the scenarios
- 04Calculate the tipping thresholds
- 05Decide and equip the team
WHAT YOU RECEIVE
A short file, and a rule that applies on Monday.
The last line is the one that produces the effect. A diagnosis the sales team cannot apply the next day changes nothing.
- The rebuilt cost structure — fixed, variable, what has drifted
- The compared scenarios — increase, status quo, discount
- The tipping thresholds — the volume you can afford to lose
- The updated break-even point — at observed cost levels
- The breakdown of margin erosion — price, mix, discounts, costs
- The commercial rule — discount ceiling and exception conditions
WORKED EXAMPLE
A seven per cent increase, or three?
A manufacturer faces an input cost increase and considers passing seven per cent on to its entire range. The calculation shows that on half the references, the increase still wins even after losing twelve per cent of volume: the unit margin absorbs the departure of the most price-sensitive customers.
On the other half, the threshold drops to three per cent of volume: the increase loses at the first departure. The decision becomes differentiated — seven per cent on part of the range, three on the other, and a supplier renegotiation on the references where no price holds.
Illustrative case. The model does not predict the market’s reaction; it says at which level of loss the decision turns.
WHAT FEEDS THE DIAGNOSIS
Two spaces, not seven.
Mix carries the price, volume, discount and cost scenarios with a deterministic calculation engine: two people redoing the calculation find the same result. Calc keeps every step auditable, which matters when the decision is challenged by a salesperson or a shareholder.
If the diagnosis reveals a portfolio problem rather than a pricing one — some references are not mispriced, they should not have existed — the follow-up is handled in Grid. If the resulting commitment is heavy, it is formalised as a decision note.
HOW TO GET IT
Three modes, one of them designed for urgency.
Short engagement
Fixed fee
Two to three weeks, aligned with your decision date. It is the default mode for this entry.
On your own
Annual licence
Your finance or sales department builds and maintains the scenarios itself.
Accompanied review
Subscription
Quarterly, for companies whose inputs move continuously. We compare practised prices with calculated thresholds and flag drifts.
It is the shortest format in the range, and the only one whose start date follows yours.
See the three access modes in detailWHO PRODUCES WHAT
We do not set your prices. We make visible what each level costs or earns.
| Deliverable | Produced by |
|---|---|
| Rebuilt cost structure | The tool, from your data |
| Price–volume–cost scenarios | The tool |
| Tipping thresholds and break-even | The tool |
| Breakdown of margin erosion | The tool |
| Choice of the increase scope | Workshop led by inNOVAtio |
| The retained price and the discount ceiling | Your decision, traced in Mix |
The last line cannot be delegated: it is the only one that commits your responsibility.
WHAT THE CALCULATION DOES NOT SAY
Nobody knows your elasticity before having tested it.
We do not claim to know how many customers will leave if you raise prices by five per cent. No model knows. What the calculation gives is the opposite, and that is what is useful: the number of customers you can afford to lose. The question moves from an impossible forecast to a measurable bet.
A break-even point is not a forecast. It is a marker at observed cost levels; it moves as soon as costs move.
A price is not defended with a spreadsheet alone. The diagnosis gives you the economic limit; the conversation with the customer remains yours.
Which pricing decision must you take, and by when?
A first thirty-minute discussion. If the decision falls within three weeks, say so: we align the format on it.