Worksheet: Rebuild elasticity against a stated reference price

A regression of your own price against your own volume says whatever the last two years happened to say. Customers react to a price against something: what they paid last time, or the nearest competitor. This sheet names that reference, rebuilds elasticity for your ten biggest products and plans one experiment. It builds the Competent step of the check:

Elasticity is estimated from granular history against a stated reference price (what the customer last paid us, or the nearest comparable competitor's price), by segment.

Step 1. Name the reference price

Segment	Reference price (last price paid, or nearest competitor)	Why this one	Data source
e.g. Trade accounts	The customer's last invoice price for the item	Buyers compare each quote with the last one	Invoice lines

Step 2. Estimate for the ten biggest products

Two methods, depending on your history:

A. Where your price moved: compare matched periods before and after the change, same season, same customers.
B. Where it did not: use changes in the gap between your price and the reference price.

Product	Segment	Method (A or B)	Change against the reference (%)	Volume change (%)	Elasticity (volume % ÷ price %)	Confidence (high, medium, low)	What else moved in the period
e.g. Product 3	Trade	A	+4%	-2%	-0.5	Medium	Competitor B short of stock

Elasticity is rarely one number. Look for pockets where it differs: lead time, channel, order size, payment terms, region.

Step 3. One controlled experiment this half

Item	Plan
What we expect to learn
Test group (region, customer cohort, product)
Matched control group
Price change
Length (weeks)
Measure
When we stop early
Owner

Done when: elasticity for your ten biggest products is estimated by segment against a written reference price, from invoice-level history.

Adapted from our own elasticity study (Deloitte, 2015).