Managing a ledger profitably and maintaining margins in the face of competition is often the hardest part of being a Sales Manager.
This is far simpler in our experience if members of the sales team fully understand some basic economics as to how margins work.
This useful tool allows you to select your business contribution % (your FD or Accountant will be able to give you this) and then shows the % that volume can afford to go down by if you put through a price increase. Conversely, it will also show the percentage that volume has to increase to compensate for a price decrease.
This matrix will help give your sales team some basic understanding of the effect of that discount they give too freely.
Price, Volume & Contribution Matrix
Help your sales team understand the impact of price reductions and the power of margin increases.