Multi-billion dollar provider of scientific products and services was growing at above-market rates but experiencing margin compression. Competition for largest accounts was intense and was pressuring pricing. Senior management was very concerned that pricing action could put volume at risk.
Our strategic pricing approach involved rigorous data analysis to determine the ranges of existing prices by market segment, customer size, and customer situation. We also evaluated off-invoice concessions and hidden discounts. Statistical analysis revealed customers and products receiving prices lower than necessary.
We provided strategies for responding to the largest, most competitive situations as well as standards for differentiating prices according to the market and situation. We added a risk-adjustment layer to the recommendations to minimize any customer defection. In addition, we trained hundreds of sales representatives to price strategically, and we introduced new tools for the sales team to evaluate and change pricing on all of their customers and products.
Margins improved by 50 basis points in the first year and by more than 100 basis points after the 3rd year. Sales growth continued to exceed market growth rates.
“The strategic pricing initiative we launched with Scott and his team was one of the most successful initiatives we have ever had. Their process and approach were outstanding contributors to our profit growth.” – President, Global Scientific Products Provider