Should We Raise Our Prices?
in Manufacturing

The short answer

The question is never whether prices should rise in general. It turns on which orders, measured by contribution per machine hour, should carry higher prices and what loss in booked machine time that will produce. Manufacturers carry a specific bind here — the $45M automation case depends on the very customer that causes the margin problem. Until that is priced, contribution per machine hour will keep moving for reasons nobody can attribute, and the debate about realised vs list price will stay a matter of opinion.

Changing prices alters contribution per machine hour at once because it changes the revenue attached to each hour already inside the three plants without any need for higher capacity utilisation or shorter changeovers. Plant directors commonly leave prices untouched even while scrap rates and material costs move, so the lines keep running orders that pull the overall margin down.

A useful price review sorts the order book by contribution per machine hour rather than producing one target price. It shows which customers sit below the value created by the hours they occupy, which ones already sit at the ceiling, and where discounting has let individual negotiations set the price instead of a rule tied to takt and scrap impact.

Any real adjustment will drop some orders. If every customer remains after the change, the adjustment left too much contribution per machine hour on the table, particularly when the account that anchors both the $45M automation case and the margin problem is the one that should absorb the largest increase.

How to tell this is actually your problem

These three together are the signature. One on its own usually points somewhere else.

✓ Nearly every quote converts and moves straight into production with no negotiation on price, so low-contribution work fills the schedule.
✓ Discounts appear on most jobs and differ by salesperson instead of tracking contribution per machine hour or the scrap rate the order creates.
✓ Prices have stayed fixed while scrap rates and changeover times have risen, so the margin attached to each machine hour keeps falling.

The move that usually makes it worse. Applying the same percentage increase to every product, which lifts prices on the high-scrap items that already drag contribution per machine hour while still leaving margin on the concentrated customers that set the takt pace.

Who this is for — and who it is not

It is for you if you run or finance a manufacturer and almost every deal closes, and closes quickly. It is the situation where the numbers are available but nobody has put them in an order that produces a decision.

It is not for you if Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.

Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.

What this looks like when the analysis is actually run

Below is an excerpt from a real run of this analysis on a manufacturer. It is a sample profile rather than a customer, and it is unedited engine output — this is the format you get, on your own numbers.

The subject is Kessler Industrial Components, a sample company profile used for testing rather than a customer — $310M revenue, three plants.

This is one move out of a full analysis. Read a complete report — every page, no email required.

What the engine does with this question

This question routes to Pricing & Revenue Optimization, one of 29 engagements the platform runs. For manufacturers it works through contribution per machine hour, capacity utilisation, customer concentration and scrap, then produces the sequence rather than a list of options — which move first, what it funds, and the observation that would say the sequence is wrong.

You watch the analysis get built before paying anything. Read a complete report here if you would rather see the depth first.

Questions people ask about this

How much can I raise prices without losing customers?

There is no general answer, and the useful analysis is per segment. What can be said is that the loss you fear is usually concentrated in a group whose economics you would improve by losing them.

Should I raise prices for existing customers or only new ones?

New first is safer and slower; existing is where the money is. A defensible sequence is to move new-customer pricing, watch win rate for a quarter, then bring existing customers up at renewal with notice.

What if my competitors are cheaper?

Then you are selling against them on something other than price, or you are not — and that is the real question. Competing on price without the cost structure to support it is the most reliable way to lose money at increasing volume.

Is this different in manufacturing than in other industries?

Materially, yes. The $45M automation case depends on the very customer that causes the margin problem — which changes both the diagnosis and the order of the fixes. The metrics that decide it here are contribution per machine hour, capacity utilisation, customer concentration, and an answer built on industry-general benchmarks will usually point at the wrong one first.

What data do I need before this analysis is worth running for a manufacturer?

Less than most people expect. Your last twelve months of revenue and cost split the way you already split it, plus whatever you hold on contribution per machine hour and capacity utilisation. The analysis is explicit about what it is assuming where your data stops, which is more useful than waiting for numbers you may never have.

When is Percision the wrong tool?

Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.

Does Percision replace a lawyer, tax advisor, auditor, or AI implementation team?

Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.