Price Elasticity

Revenue, commercial and pricing teams who set prices and need to understand the demand effect before they do. Finance uses it to see where margin is being left on the table.

Sensitivity is related to product availability, so pricing reflects what you have left to sell rather than treating demand as unconstrained. Paired with inventory management, markdown goes where it clears stock instead of where it gives away margin.

Yes. Elasticity in subscription businesses varies sharply by tenure: long-standing customers tend to absorb an increase with little effect on retention, while recently acquired customers churn at a rate that can cancel out the gain. The model shows you where that line sits.

Historical pricing, sales volumes and promotional history for each product, plus competitor prices where you have them. Customer and segment data sharpens the curve considerably, so if you're already running segmentation, the two connect directly.

No, that's the aggregate approach and it's where most models stop. Ours resolves to segment and individual level. Averaging across your whole base hides the customers who'd pay more and the ones who'd leave at the first increase.

Benchmarking tells you what competitors charge. It doesn't tell you how your customers respond to your price. Most pricing decisions come down to competitor prices, last year's price and the judgment of whoever knows the category best. This model replaces the judgment call with a measured curve.