A Simple Framework to Find Out Profit changes year-over-year — but too often, we don’t fully understand why. 🤔 Was it a shift in costs? A change in volume? Or was it pricing — often considered the most powerful profit lever? Without a structured way to break this down, businesses risk reacting to symptoms rather than addressing the real cause. A Simple Way to Decompose Profit Impact To truly understand what’s driving profit movements, you can break the change into three impa

Despite its direct impact on profitability, pricing remains one of the most underdeveloped capabilities in modern organizations. The core issue is simple: pricing is still not treated as the strategic priority it should be. But why does this happen? Below are some of the most common root causes. Not all apply everywhere, but you’ll likely recognize at least a few behind most pricing failures or weak pricing management. Pricing Teams Are Too Small to Drive Impact Compared with

How to maximize revenue and profit Finding the optimal price for profit and /or revenue is the holy grail for most businesses. But it’s far less straightforward than it seems. Let’s break it down. Revenue is (relatively) simple We know the basics: If a product is inelastic (e > -1), increasing the price increases revenue If it’s elastic (e < -1), increasing the price decreases revenue So, in theory, if you know elasticity, you can estimate the price change that maximizes reve

Most Companies Track Price. Very Few Track Pricing Performance. Most companies know their: List price Discounts Margins But very few companies track pricing performance . Pricing performance answers a different question: How effectively does pricing drive revenue, profit, and market outcomes? To answer that question, companies need a system of pricing metrics , not just a few isolated KPIs. Below is a simple framework for thinking about pricing metrics. Price Level Metrics Th

They collapse quietly, and long before you notice! 😲 Many industries are under serious margin pressure. The reasons are familiar: ⚠️ Intense competition ⚠️ Price pressure ⚠️ Limited customer budgets ⚠️ Rising energy and raw-material costs ⚠️ Macro uncertainty Even highly differentiated markets like AI are feeling it. For example, in a recent post, Gary Bailey  highlighted that OpenAI may be operating at margins as low as -70%. So here’s the real question: 👉 How easy is it t

AI is no longer about demos and hype — it’s about who can turn usage into profit! Almost a year ago, I wrote about the coming AI monetization war ! Since then, two shifts are impossible to ignore: 1️⃣ AI buyers now care more about business outcomes than the technology 2️⃣ AI vendors face pressure to monetize amid exploding compute costs 👉 OpenAI’s pricing experiments made this visible: The $200 Pro plan looked expensive. Yet even that tier struggles with profitability due

Most companies are locked inside it. And most don’t even know it. 👀 Pricing failures rarely look dramatic. They feel normal. Routine. Safe. That’s the problem! The four pricing traps   Here are 4 invisible pricing defaults holding companies back:   🔒 Set & forget pricing   Pricing is treated as a one-time decision. Product improves. Marketing evolves. But pricing stays frozen.   The catch:   Costs change. Inflation moves. Competitors adjust. Customers adapt.   Profit leaks

🤓 Everyone loves quoting McKinsey’s rule : 1% price increase → 10% profit increase! 🚀 It’s quoted everywhere. And sounds universal. It isn't. 🤔 👉 There is no 1→10 rule. The real relationship is simple: % profit change = % price change ÷ % profit margin That’s it. No magic. No mystery.   When the McKinsey rule actually works: Margins around 10% Typical for manufacturing and industrial firms Now look at tech 👇 SaaS companies: Contribution margin: ~80% 1% price increase → ~

Price cuts rarely help you hit revenue goals — and they almost never protect profit. 😲 In a previous post  (Part 1), we showed how the volume needed to keep profit steady is often unrealistic. Here’s Part 2 — and it reveals the next mistake: 👉 Skipping the elasticity check. Watch the video above to see the elasticity needed to hit profit targets for: 🔸 Margins from 5% → 80% 🔸 Discounts from 1% → 20% 🔸 Profit goals from –10% → +10% Here’s what the data makes clear: 1️⃣ N

The answer may surprise you👇 At the recent Professional Pricing Society  profitABLE 2025 conference in Barcelona, renowned pricing expert Augustin Manchon delivered a powerful keynote on AI Monetization and Trust!   He shared a thought-provoking scenario: You launch a new AI initiative. First results show +6% revenue 🚀 …but +30% customer complaints ⚠️ So, what do you do? Scale anyway — financial gains come first Delay — fix issues Pilot — learn more Kill it — trust is too

Price cuts don’t fail by chance — they fail by math. Here’s the checkpoint almost everyone forgets. 😯 Two checkpoints In a previous post (Part 1), we looked at the first checkpoint: ➡️ Required volume growth: 15%+ is challenging, 25%+ extremely hard  But there is also a second checkpoint: ➡️ Price elasticity A simple guide 🟩 Low elasticity (1.0–1.5) Buyers care less about price Stronger differentiation e.g., branded clothing, specialty coffee, toiletries 🟨 Medium elastic

Price cuts are easy to implement and welcomed by customers, but rarely deliver the results we expect. In a previous post , we examined why price cuts typically fail to generate the required revenue growth. Now, let’s extend the same logic to profit  — and here’s where things become even more challenging. When it comes to profit, one additional parameter changes the entire story: 👉 Your current margin. How Margin Shapes profit growth when discounting A single formula links m

Most discounts demand scary volume jumps. Read on to see what to check before you enter the discount zone👇 Discounting strains margins and cash flow 💸 And “cut price = sell more” is often weaker than it looks. Why? It’s just math. 🧮 One formula links revenue, price, and volume changes: r = p + q + p*q (r,p,q: % change of revenue, price, quantity) You can use this formula to estimate the real volume uplift needed to hit revenue targets at a given discount. In most cases, yo

Profit depends on many factors, but which one really moves the needle? The Poll We asked, which is the most powerful Profit Level? 📈 ...

Forecasting the Future of Everything! FutureUP's Founder & CEO, George Boretos , hosts the latest episode of the prestigious Forecasting Impact ( #1 podcast in Predictive Analytics ), a monthly podcast by the International Institute of Forecasters about Forecasting and AI! In this episode, we speak with Dr. Theodore Modis , acclaimed forecasting expert, strategist, and founder of Growth Dynamics , about the science behind forecasting and the natural laws that govern technolo

FutureUP 's founder, George Boretos , joins acclaimed pricing expert Marcos Rivera , host of the successful podcast Street Pricing , for...

Spoiler alert: It’s Not Just the Algorithms! 💡🤖 The key to AI success is built on three essential pillars: 🧠 ALGORITHM : The core. The...

AI is rewriting the rules of pricing! First movers are already winning.🚀 🎉 Excited to launch our first online course with the...

And it’s not just about subscriptions anymore. 🤔   AI  is transforming how we price software. Even Salesforce - the company that made...

What came true - and what it means for you and your company’s future! 📍 November 2023 - one year after ChatGPT launched. We delivered a...