Reference
Plan a price increase
Exemptions, delay and concessions reduce the revenue a price increase adds in its first year. The worked example leaves A$27,000 before any volume or mix change.
Make a price increase decision sheet, or work through the calculation below. The tool shows the same example before you enter anything.
First-year revenue formula
Use annual revenue for the product group or customer segment covered by the plan. Count delay from the start of your twelve-month planning period.
Extra revenue = R × p × (1 − e) × ((12 − d) / 12) × (1 − c)
| Symbol | Meaning | Example input |
|---|---|---|
| R | Annual revenue before the increase | A$1,000,000 |
| p | Planned increase, as a fraction of the original price | 0.05 = 5% |
| e | Share of revenue exempt from the increase | 0.20 = 20% |
| d | Months before the increase takes effect | 3 months |
| c | Share of the remaining uplift given back through concessions | 0.10 = 10% |
Enter percentages as fractions in this formula. The tool accepts percentage numbers, so enter 5 for 5% there.
Use positive annual revenue and a positive planned increase. Exemptions and concessions range from 0% to 100%, inclusive. Their formula fractions range from 0 to 1. Delay ranges from 0 to 12 months, inclusive.
Concessions remove a share of the uplift after exemptions and delay. A 10% concession here removes a tenth of that remaining increase. It does not discount the whole new selling price by 10%.
Worked example: A$27,000 in the first year
The decision sheet uses these invented figures. Annual revenue is A$1 million, with a proposed 5% increase.
A$1,000,000 × 0.05 × 0.80 × (9 / 12) × 0.90 = A$27,000
| Step | Calculation | Amount |
|---|---|---|
| Proposed annual increase | A$1,000,000 × 5% | A$50,000 |
| Less: exempt revenue | A$50,000 × 20% | A$10,000 |
| Increase after exemptions | A$50,000 − A$10,000 | A$40,000 |
| Less: three months before prices change | A$40,000 × 3 / 12 | A$10,000 |
| Increase after delay | A$40,000 − A$10,000 | A$30,000 |
| Less: concessions | A$30,000 × 10% | A$3,000 |
| Extra revenue in the first twelve months | A$30,000 − A$3,000 | A$27,000 |
The result equals 2.7% of starting annual revenue. It retains 54% of the proposed A$50,000 increase.
Assumptions and limits
Revenue is spread evenly across twelve months. Underlying volume and mix stay constant. Exempt revenue receives no increase.
The increase starts once, after the stated delay. The concession percentage applies to the remaining uplift. Seasonal revenue or different effective dates need a more detailed calculation.
The result measures extra revenue. Costs and customer response need separate analysis. This illustration is not a forecast of revenue or profit.
Revenue and contribution answer different questions
The volume-loss breakeven explanation asks how much volume a price increase can lose while holding contribution constant. It assumes full, immediate exposure to one price increase.
Do not use the first-year 2.7% revenue result as the price change in that formula. Exemptions and timing need analysis by segment or period.
Choose your next step
- Make a price increase decision sheet. Enter your assumptions and print the result.
- Check a planned price increase. Review what you have covered and what to check next.
- Make a price increase rollout plan. Assign actions, owners and dates, then edit the plan.
Limits
The tools work separately. Your inputs are not transferred between them. Check agreements and notice requirements before using the rollout plan.
Review the pricing practices behind the decision
The Pricing Health Check reviews the practices behind your prices. The full check is optional.
- Review your pricing practices.
- See the public-record Domino's case study.
- See all four decision tools.
Calculation and corrections
Published by onestepright. Worked calculation checked 31 October 2026 against the decision sheet's arithmetic. The inputs are invented for illustration.