Our Take on Pricing
One piece at a time
When companies do take on the challenge of improving their pricing, it can be hard to know where to start. The job of setting the right price is only the most visible part of the overall strategy. The more effective course is to take on the challenge of pricing in bite-size portions that set clear, aggressive goals within tight timelines. Segmentation. Improving price execution processes. Understanding profitability at the customer, product, or channel level. Important steps like these can be executed within 100 days and together, they add up to significant long term changes.
The six core pricing competencies
In improving pricing and profitability management our methodology consists of six competencies that enable an organisation to realise the full benefits that an improved pricing approach can bring.
Pricing Strategy provides a framework to support business objectives by understanding and capturing the value of an offering relative to competitive alternatives and customer demands.
Price Execution deals with the effective implementation of defined policies and processes that govern profitable decision making on a daily operational level.
Analytics and Price Setting is all about data and modelling techniques that help determine profit-maximising prices and strategies for products and services.
Organisational Alignment and Governance seeks to establish an effective management of people and cultural dimensions within an organisation so that it can sustain pricing excellence.
Pricing Technology and Data Management focuses on pricing analytics and execution tools to enable effective pricing decisions and to enhance the quality and consistency of pricing processes.
Tax and Regulatory Effectiveness looks at proactive management of tax, regulatory compliance and governance issues related to pricing decisions.
Getting it done
After helping leading companies optimise their pricing, here are some things we’ve learned.
Create structured, repeatable and supported pricing processes. Focus on the key processes that will help create sustained performance over time.
Focus on value provided to customers as well as the prices charged. Clearly define and communicate the value you provide to customers.
Make your pricing improvements sustainable and repetitive by adopting technology. The benefits gained from examining your pricing process need to continue to pay dividends into the future. Consider technology solutions that empower your pricing decision makers with key information time and time again.
Align the company to focus on price. Consider compensation incentives that better align employee goals with the goals embedded in your pricing strategy.
|Understand the level of pricing maturity of your sales organisation||Pricing Maturity Assessment|
|Understand which customers and products provide greatest value to your organisation||Transactional Pricing Analytics|
|Identify customer segments and tailor product and service solutions accordingly||Customer Segmentation|
|Create a common understanding of price and margin levers in your organisation||Price Waterfall|
|Provide the sales force with the right tools to execute pricing guidelines successfully and minimise margin leakage||Pricing and Profitability Tools|
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