Test how a proposed price ladder changes contribution when customers move between entry, core and premium offers.
About this analysis
Enter the current and proposed economics for each offer, then set the expected movement between offers. The calculation separates retained customers, trade-up, trade-down, exits and new demand before testing how much adverse movement the proposed ladder can absorb. Customer movement is entered by the user rather than inferred from an external benchmark. For more information, visit our pricing and packaging consulting page.
Offer economics
Current volume represents the existing customer or transaction base. New demand is incremental volume that does not come from the current base.
Customer movement
Enter the share moving to another offer or leaving the ladder. Retained share is calculated automatically so every row remains at 100%.
What the interactive shows
PRICE LADDER MIGRATION TEST: ILLUSTRATIVE DEFAULT RECORD OFFERS 1. Entry Current price: $49 Proposed price: $55 Current variable cost: $16 Proposed variable cost: $17 Current volume: 3,000 New demand: 0 2. Core Current price: $89 Proposed price: $99 Current variable cost: $28 Proposed variable cost: $30 Current volume: 4,500 New demand: 0 3. Premium Current price: $149 Proposed price: $169 Current variable cost: $48 Proposed variable cost: $52 Current volume: 1,800 New demand: 0 CUSTOMER MOVEMENT Entry -> Entry: 92%, Core: 5%, Premium: 1%, No purchase: 2% Core -> Entry: 8%, Core: 84%, Premium: 5%, No purchase: 3% Premium -> Entry: 1%, Core: 9%, Premium: 87%, No purchase: 3% COMPUTED POSITION Current revenue: $815,700 Proposed revenue: $885,447 Current contribution: $555,300 Proposed contribution: $614,649 Contribution change: +$59,349 Average current realized price: $88 Average proposed realized price: $98 Average realized price change: +11.5% Trade-up volume: 405 Trade-down volume: 540 Lost volume: 249 CONTRIBUTION TRANSFER Retained customers: +$69,096 Trade-up: +$20,520 Trade-down: −$14,598 Customer exits: −$15,669 New demand: $0 BREAK-EVEN POSITION Additional trade-down tolerance: approximately 751 units under the strongest available adverse trade-down path Additional exit tolerance: approximately 507 purchasing customers under the highest contribution-loss path FINDING The proposed ladder increases contribution by $59,349 under the entered customer movement assumptions. Trade-up contributes $20,520, while trade-down contributes −$14,598 and customer exits contribute −$15,669. The current gain would be eliminated after approximately 751 additional units of adverse trade-down under the most economically damaging available path. METHOD STATUS Management-entered prices, variable costs, current volumes, incremental new demand and customer movement assumptions. Retained share is calculated as the residual after entered movement to other offers and no-purchase share. Current contribution equals current volume multiplied by current unit contribution. Proposed contribution carries each current customer through the entered movement matrix and adds entered new demand at proposed economics. Break-even migration tolerance is solved from the contribution change and the strongest financially adverse or favorable available movement paths. No external elasticity, migration rate, willingness-to-pay threshold or hidden score is used.
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