Pricing Case Study

When was the last time you reviewed your pricing?

Many companies are reluctant to increase the price of their products and services because they feel the market won’t bear the increase. Currently, companies are experiencing supply chain issues, increased costs of materials, labor, employee benefits, and a shortage of employees. Smith Schafer experts have assisted clients in various industries in examining their specific situations and have guided them in making decisions regarding the pricing of their products and various services. Here is a general approach we utilize and examples of specific situations that have been successful.

Smith Schafer Approach

We begin by gathering and analyzing data such as:

  • Margin by product
  • Margin by key customer
  • Add-on services we may be giving away for free without realizing it
  • Classify customers into A, B, C, others
  • Pricing history of the company
  • How each of these items compares to the industry as a whole

This may be an important time for the management team to examine the overall pricing strategy. We have resources that assist in making informed decisions.

Case Study #1

A business in the printing industry had experienced a decline in gross margin, and our analysis identified that lower valuable customers were creating scheduling inefficiencies by disrupting the production schedule with rush projects. We tested a pricing model on some of these customers and determined the rush surcharge needed to be paid by the customer or move the project to the regular schedule. The company decided to implement this policy across the board and not only received increased revenue in the form of rush surcharges, but it also was able to schedule more effectively and discontinued their third skeleton shift.

Case Study #2

A firearms accessory company was experiencing overall profitability struggles. Our analysis determined the true cost of production for their products was significantly higher than initially thought because of production-related inefficiencies of short production runs. Over time, their customers had shortened the production runs and also requested quick lead-time orders. The customers were vital to the company, so a general price increase was not the best option.

Results

Company management and Smith Schafer experts determined various price points based on the quantity ordered. The company discussed the situation with their customers, and together they were able to agree upon prices and quantities acceptable to both parties.

Why Clients Choose Us

“We have worked with Smith Schafer for over 45 years. They have been great to work with, from wonderful administrative support, tax staff, and CPAs. They have supported us for years with our financials and mergers/acquisitions. Always there to help!”

 - Washburn McReavy Funeral Chapels

“Our service is always exceptional and never have to second guess the answers.”

 - EnergyPrint, Inc.

“Smith Schafer has provided second to none service and value to my business and personal accounts for over 30 years. Their expertise and knowledge are unmatched by any other accounting firm I have encountered over all these years.”

“The relationship we have built over the years with the staff at Smith Schafer & Associates is one that can never be replaced. They are quick with helping us figure anything out, always willing to pick up the phone and walk us through any problem we are having. Also they are just all so friendly and kind!”

I have worked with Jason Boynton for several years. He has consistently provided exceptional service and advice always delivered in a timely, pleasant manner.

“Smith Schafer always makes everything go smoothly. They were recommended to us by our community bank. We have been using their services for many years for our small business and personal taxes. We always feel well taken care of and that we are receiving the best advice, direction, information and tax preparation."

- The Dog Perk Corporation

“Smith Schafer always provides great information for our business. They are thorough with our accounting and financial planning. We have leaned heavily on them with an interpretation of the PPP Loan and COVID-19 planning. They have been instrumental in our success and are always very knowledgeable and quick to respond to any of our questions."

Smith Schafer has provided second to none service and value to my business and personal accounts for over 30 years. Their expertise and knowledge are unmatched by any other accounting firm I have encountered over all these years."

“The relationship we have built over the years with the staff at Smith Schafer is one that can never be replaced. They are quick with helping us figure anything out, always willing to pick up the phone and walk us through any problem we are having. Also they are just all so friendly and kind!"

“We love our CPA team at Smith Schafer. They have helped us navigate many personal and business decisions."

“Smith Schafer is very dedicated to their clients and always has their best interests in mind. They are very knowledgeable and thinking ahead to what the clients may be needing in the future. We would highly recommend Smith Schafer to our family and friends."

"Always fast, great service and questions answered. Love the people I work with at Smith Schafer. We've been there so long, it's like working with family."

- MotoProz, Inc.

"Smith Schafer is always responsive and in the know about what is important for me and my business. The team is responsive and professional with all my interactions. Very customer-focused."

- Custom Communication

"The people at Smith Schafer always take great care of me. They are so knowledgeable and provide great advice and support."

- Sound and Media Solutions, Inc.

 

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