Pricing is the single greatest lever for improving near-term profit in a business. A 8% net margin business that improves realized pricing by just 1% stands to improve its profits by about 12.5%. Is pricing in your business a set of individually negotiated deals? Do you have a Head of Pricing for your business?
Transaction Pricing and Customer Profitability : If your company sets prices through negotiation and bids and has several types of discounts, rebates and promotions, it is likely that your pricing has significant room for improvement. We figure out exactly what drives your profits for each customer and transaction so that your sales force can be smart about setting the right price. A typical client realizes a 2-3% increase in ROS.
Value Pricing : Strong brands extract a premium. We help you map where your products stand relative to the competition on the cost and benefits perceived by the consumers. Pricing is a key customer touch point. It says something about your brand just as packaging and TV commercials do. Wrong pricing can destroy your brand and franchise.
Services and Solutions Pricing : Businesses that provide services, e.g. software companies, financial services and travel, face special pricing challenges. To succeed, service businesses must price not only to recover the cost of providing the service but also the risks they face in managing the cost of delivery over time. We use a proprietary approach to pricing for both service and risk. | |  | A leading European business travel agency was being squeezed by industry giant American Express on one hand and smaller niche players on the other. Aggressive bidding led to contracts that were unprofitable over time |  | A full analysis of over 200 corporate contracts revealed there were over 15 drivers of profitability – including volume of transactions, mix of bookings among hotel, car and air, type of contract, number of changes per booking, etc. |  | The risk was controlled sometimes by the travel agency and at other times by the customer (e.g. volume of transactions was customer controlled) |  | By changing the contracts and building risk based escalators in the pricing, the company greatly improved its realized pricing |
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