Pricing & Margin Management
Improve your organisational pricing maturity. It's one of the most important profit drivers. We help.
Pricing is one of the most important profit drivers for any organisation. Organisations starting the pricing journey benefit from doing the right things right, at the right moment. We help, from margin improvement projects to value based pricing projects. Our many projects have given us deep experience in b2b, b2c, b2b2c markets, products, services and software pricing challenges.
We have 20+ years experience in helping organisations to pricing excellence. Let's talk and see how we can help.
Pricing is definitely our passion. We are true pricing professionals, and always open to share our expertise in trainings and conferences.
The EPP is the leading pricing knowledge platform in Europe, and we are happy to share our expertise in many presentations.
Margin Improvement Projects
Each pricing journey starts with taking 'transactional control' : correcting the obvious margin and price leakages in your product and customer portfolio. Vital pricing and margin reports are important enablers of succesfull interventions.
Margin improvement projects always need good analytics, a tight execution, supported by a commercial sponsor. We have delivered many succesfull margin improvement projects, believe us.
Our team supports you to develop the vital reports and clean your data until everyone trusts the data. Together we define the margin improvement projects (scope, outcome, timing, path) and together we deliver the targets. A typical margin improvement journey is realised within 12 months - and generates an equivalent of between 1% and 3% of revenues on the product/market scope .
We embed the new processes and reports in pricing tools so the margin improvement is locked in for the coming years.
Discount and surcharge policy
A functional discount policy, a clearly defined surcharge policy taking care of costs to serve, and proper governance are always key in each pricing policy.
Our team helps to define the discount grids/policy, define the surcharge principles, install the escalation process and embed the processes/rules in a "Configure To Quote tool" (eg Apptus, Sofon, SalesForce, PROS, ...).
Economic Value Calculation
If you want to sell on value, you must be able to prove and defend your value in economic terms.
Economic Value Calculation is great to connect your sales, marketing and product management around value discussions !
The best question that you can get from your customer is : "we love your value, but why are you so expensive" ? This is - the - moment where you are able to prove your value.
Our teams help you to define the differentiating value drivers versus the next best alternative, set up a data source and calculate your differentiated added value of your competitors.
Value and Price Communication
It's great to price on value, but if your sales does not trust your price you are in trouble. And they will not trust your price guidance until you can prove them the value of your products/services. Value communication is key in order to let your customers see your value.
The number one reason for price pressure : customers do not perceive the differentiation.
If you have a value strategy ; you will not only need to price on value, but also communicate, sell and defend your value.
Our teams help you to define and communicate your value - and to improve your price communication.
Especially when you offer subscription based pricing plans ; your value - and price - communication is key. How you price is as important as what you price in the subscription economy.
The typical pricing knowledge gaps in order to set a value based price are ;
- understanding price (and value) segmentation
- understanding willingness to pay (per segment)
- understanding price elasticity
We support you in value mapping, feature prioritization - and understanding willingness to pay. We combine different techniques (qualitative interviews with DMU's, expert interviews, Van Westendorp Price Meter, Conjoint Measurement, Brand/Price Trade Off, Neuro Research and Market Testing) for optimal insights.
We do price sensitivity and elasticity research (elasticity is a very complex topic, with a lot of parameters influencing price sensititivy...). Elasticity insights help you to optimize your price points, discounts and promotions.
Pricing Maturity Roadmapping
A recent study by the EPP (European Pricing Platform) in 2016 revealed that still many organisations can improve when it comes to value capturing (pricing). In many organisations, pricing is still under-leveraged opportunity for substantial margin improvement. A small improvement in price realisation - or tackling the most obvious price and margin leakages in your product and customer portfolio - have an important impact on your bottom line result.
But still many organisations struggle to define a clear roadmap to develop their pricing maturity. Our team helps you to assess your actual pricing maturity and defines with you a practical roadmap for the next 12 to 24 months to excel your pricing teams.
Our 20+year experience with implementing succesfull pricing strategies is that it's extremely important to do the right things right - at the right moment. We therefore strongly recommend your pricing teams to invest in a "Certified Pricing Manager" Programme to support the process. The CPM programme is recognised as the leading pricing programme, with certification based on a real business project with proven successes.
Price Setting and Policy
Ourt teams support you with your price setting challenges.
A sample of latest pricing projects we supported :
- Value based pricing projects
- Economic value calculation
- Spare parts pricing
- Saas pricing
- Subscription based pricing plans
- Effectively implementing a price increase
After the new investors privatised the company and realised a succesful transformation path - thanks to important investments in operations and implementation of a new global sales organisation - the production facilities were reaching full capacity again. This triggered a new phase for the organisation, switching from a volume strategy to a value/profit strategy. This new strategic path required a new market and pricing approach, with a focus on high added value applications to yield on every ton of the available capacity.Read more
When discount policies have not been managed well during years with sales reps giving too much freedom to negociate net prices, the logic in the discount policy is completely gone. This resulted in widely scattered net prices without any logic in customer performance. The new commercial director wants to reinstall price integrity and discount discipline.Read more
Unilever, Nestle SA and other consumer giants are wooing investors with cash rewards as they lose the pricing power that’s historically driven sales growth and predators circle the industry. Read the full article here : https://www.bloomberg.com/news/articles/2018-04-19/unilever-plans-7-4-billion-buyback-as-pricing-faces-squeezeRead more
VC,, as expert partner from the EPP - the leading platform for pricing and monetization leaders - developed a pricing maturity model to help organisations to assess their as-is and to-be pricing maturity. The model helped leading organisations on their way to pricing excellence and serves as a guideline to define the pricing maturity roadmap priorities. The EPP Pricing Maturity Model ® is continuously updated (version Jan-2018) with the latest insights - and serves as the framework to define the skill cards trained in the Certified Pricing Manager programs. The ‘how-to’ and ‘know-how’ to develop your pricing excellence roadmap is trained in the CPM programs and described in the ‘Crossing the chasm’ white paper.Read more
It’s good to reflect on the enablers to make effective value capturing work. From our experience, there are 4 important enablers.Read more
Developing your pricing maturity is not just a project, it‘s a journey and change process. It takes time and requires efforts, but is very rewarding - and yes, there is a proven path towards pricing excellence ! The main learning after 15+ years of succesful pricing projects : it's important to do the right thing right - at the right moment. This Thougth Leadership Paper gives you a concrete step-by-step approach to lead you to pricing excellence !Read more