Price-Volume-Mix Analysis
Due to constant changes in customer mix and product mix, most organizations do not understand the real drivers of revenue change in each of their lines of business. While many organizations attempt to measure price, unit volume, and mix shifts, few seem to do so accurately.
We have found that disaggregating revenues is critical to understanding the health and growth opportunities of a business. Consider the following chart:
There are key questions that make the search for opportunities less of a struggle and the analysis more accurate. In order to determine exactly which questions you should ask, you need to thoroughly understand whether prices and volumes are up or down.
KiniMetrix accurately separates revenue changes into price, volume, and specific mix components across different customers and product lines. As a result, you can:
- Determine how much of your revenue changes are attributable to customer mix shifts, territory mix shifts, market mix shifts, and region mix shifts
- Create a sales incentive structure that rewards your top performers for hitting explicit price and unit volume targets
- Hold your sales force accountable for what they can directly control
- Execute better in the field