How to Test a Price Increase Before You Raise Prices

By the end you'll know what a price increase does to your business's annual cash flow, tested on a copy of your numbers before any customer hears about it.

Before You Start

The Pricing Power Play is an AI Play. AI Plays need Solo or Advisory, and each run costs 1 credit. On the free plan you can test the same idea by hand with a Custom Scenario, covered at the end of the steps.

You also need:

• Your revenue streams in My Business, imported or entered by hand.
• Plays unlocked. They open once you finish, or dismiss, the Score Card's tour.

A Play is a copy of your live business with a frozen "Current" snapshot. Nothing you do in a Play changes My Business.

Steps

1. Open "Plays" in the navbar and click "Start New".
2. Choose "Pricing Power" on "Start a New Play".
3. Set "Items to keep as-is". Mark anything the Play shouldn't touch, such as a stream on a signed contract whose price is fixed for the year.
4. Add notes. Tell it what you know that the numbers don't: which customers are price sensitive, what competitors charge, when contracts renew.
5. Click "Run Play". This uses 1 credit.
6. Read the results (below). If you want to change a recommendation, "Duplicate & Customize" makes an editable copy.

On the free plan: start a "Custom Scenario" instead, tick "Revenue" (and "Direct Costs" if the change affects them), click "Create Scenario", and change the prices yourself. It costs no credit. The free plan includes one scenario at a time; deleting it frees the slot.

What You'll See

Results come in three parts:

• "Recommendations": the changes the Play proposes.
• "Cash Flow Impact": three columns, Current, Change and Scenario. Amounts are annual (or monthly, if you enter your numbers monthly), with no month-by-month timing.
• "Implementation Plan": a task board for putting the change into practice.

Here's the arithmetic that sits under a result like this, using the hypothetical Greenline Landscaping. Residential weekly mowing is $55 a visit with $42 of direct cost, so each visit leaves $13. At $60, each visit leaves $18, which is 38% more per visit. Greenline could lose about 28% of its mowing visits at the new price and still earn the same gross profit from mowing. If fewer than that walk away, the increase pays.

For why mowing is the stream worth testing first at Greenline, see how its margin compares with the commercial work in You Have a Skill. Is Your Business Working?

Common Questions

Does running the Play change my real prices?
No. A Play works on a copy of your business. My Business stays as it is until you change it yourself.

Can I test a price increase for free?
Yes, by hand. The free plan includes one Custom Scenario: pick "Revenue", create it, and edit the prices. The AI Pricing Power Play needs Solo or Advisory and costs 1 credit per run.

Can I ask questions about the result?
On a paid plan, yes. You can ask Occam about the result from the Play's results page, and each question costs 1 credit.