If your organization is like most, pricing is a set of disparate activities carried out in different parts of the business. And in many businesses, each function – Finance, Marketing, Sales and Operations – works with a different set of data to make pricing decisions. Different functions also often define goals and reward performance using different metrics, which can be in conflict with each other.
Effective pricing management can help you increase profitability by improving the way you analyze, set and deliver prices, including enforcing pricing policies. And the benefits can be realized in good times and bad. The tools and discipline of pricing and profitability management can help a business address the immediate issues presented during economic instability, as well as help position the company for long-term profitable growth. Learn more about Pricing and Profitability Management.
When companies do take on 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, which can engage nearly every part of the business. The more effective course is to take on the challenge of pricing in bite-size portions that set clear, aggressive goals within tight timelines. Important steps - like segmentation, improving price execution processes, or understanding profitability at the customer, product or channel level - can be executed within 100 days. And, as an interconnected whole, they can add up to significant long-term changes.
No matter where you start, gaining transaction-level insights –that is, knowing exactly what is happening in each and every sales transaction– is the key to understanding exactly where and how a company’s pricing and profitability can be improved. Armed with these insights, you can align spending on individual clients with the value they create. For example, a discount is an investment in your customer. Are you getting the right level of return on that investment? Do you know which customers consume the most technical support? All customers are not created equally. Transaction-level insights can help you understand the differences more clearly – and change your pricing accordingly.
Deloitte is routinely ranked as the top pricing practice in the world by leading analysts.We offer an end-to-end approach to improving the entire spectrum of pricing capabilities, not just bits and pieces along the way. Strategy. Price optimization. Process improvement. Organization design. Transaction analysis. Technology selection and implementation. Change management. We put it all to work together, building on transaction-level insights to help some of the world’s most successful companies become even more competitive through improvements in pricing strategies, processes and capabilities. And when it’s time to put technology to work in support of your plans, we have close alliances with the top solution vendors to help you get more value, faster.
Here are some of the ways we can help:
Deloitte has helped many leading companies improve their approach to pricing. Here are some of the things we've learned along the way: