Expert Spotlight | Strategic Pricing Solutions

Strategic Pricing Solutions (SPS) is a management consulting firm helping clients with pricing strategies, data analytics, and pricing processes.

Strategic Pricing Solutions was formed by Scott Francis in 2005 with a vision of enabling B2B clients to build sustainable strategic pricing capability to significantly improve their profitability. By providing flexibility in how we serve our customers, Strategic Pricing Solutions consulting enables clients to build sustainable strategic pricing capability and continuous improvement in profitability through better pricing decisions.

Scott is an executive with extensive management experience in complex domestic and international environments with a demonstrated track record in profit improvement and executive leadership in pricing, finance, and marketing. Prior to forming Strategic Pricing Solutions, Scott’s roles in industry included SVP Marketing & Pricing, VP Finance and CFO of multiple businesses.

Strategic Pricing Solutions’ consultants are all senior executives with years of hands-on experience in pricing, strategic planning, marketing and finance. As engagement leaders, our pricing consultants spend time both engaging in strategy discussions with senior management and rolling up our sleeves and working with data analysts. This enables SPS to be flexible in designing engagements to meet our customers’ needs.

Consulting Services

The Strategic Pricing Solutions consultant engagements focus on utilizing rigorous analytics, behavioral economics, and pricing strategy discipline. Our goals are to provide our clients with specific actionable recommendations for near-term and long-term improvements in pricing strategies, analytics, and processes and to transfer our knowledge and methodology to them. When done properly, the shift to a more strategic value-based pricing capability typically results in sustainable profit improvements of 1% to 4% of sales.

Pricing Methodology

Strategic Pricing Solutions starts with a view that pricing decisions should be driven by the data, and pricing strategies should be aligned with business strategies. That means pricing strategies should reflect the clients’ value proposition and how they can win in their markets. We also believe that the value equation usually varies among customers, and pricing should match those different levels of value – turning customer value into shareholder value.

We are flexible in how we offer pricing consulting services to clients, and we develop custom engagements ranging from quick diagnostics, to providing regular pricing analytics to implementing complete price optimization and value pricing processes. In any engagement, we encourage our clients to finalize their pricing strategies and identify the pricing improvements they want to make before investing significantly in new pricing tools.

Strategic Pricing Solutions pricing processes is based on data as represented by these charts and graphs

Our pricing methodology starts by segmenting the customer base and identifying the different levels of value for each. Then using client data, we conduct extensive analyses of historical performance by segment, customer, and product type, plus relative price comparisons, and comparisons of price to value. This work can provide a quick view of where the opportunities for improvement are, and how much they could be worth.

The next step is to recommend pricing strategies and structures that reflect the clients’ competitive strengths, are aligned with the values for each segment, and begin to correct specific prices that are not aligned with customer value. These recommendations are often piloted on a subset of the business, to prove that the changes will deliver value, and to develop organizational buy-in.

Implementing sustainable value-based strategic pricing requires commitment, and typically organizational change management is required. The SPS process includes training to develop the required skill sets, tools to facilitate the process, and management processes to lead and reinforce the changes. Additionally, implementation should include measuring results versus objectives and making adjustments based on the results.

Pricing Consulting Services

Pricing Assessment

A typical offering of pricing consulting is a pricing diagnostic, which is an assessment designed to evaluate your pricing capability and identify near-term and long-term opportunities for improvement. We review your market and the drivers of success, evaluate how well your pricing strategy is aligned with your business strategy, and evaluate your price levels, pricing processes, and tools compared to best practices. We conclude with recommendations for near-term and long-term pricing improvements, and quantify a range of what the improvements could be worth.

A pricing assessment is generally data and analysis-intensive, and we can either guide you through the analyses or receive your data set and do the analyses for you. By applying some market tested analytical approaches to your transaction data, we can estimate customer price sensitivity and willingness to pay and compare those estimates to your current price levels. When we combine the analyses with a review of your strategies, pricing processes and tools, a picture will emerge with your path to world-class pricing.

Pricing Strategy

Strategic Pricing Solutions works with clients to develop data-driven strategies that are consistent with their business strategy. We review the market(s), value proposition, competitive positioning and current pricing strategies and architecture. We also analyze the historical results of existing pricing strategies and conclude with recommendations for enhancements or modifications to your current pricing strategies.

Learn more about our approach to pricing strategy

Pricing Analytics Packages

For those without resources or data analytics tools, we receive a monthly or quarterly data feed and we provide a series of pricing analyses. The packages include price realization and price effectiveness by business unit, location, segment, customer, and other dimensions relevant to the client’s business. Price elasticity and the impact of price changes on volume can also be determined. Pricing analytics packages offer clients a way to quickly build strategic pricing capability and begin to implement margin-improving changes without the time-consuming process of hiring new people.

See data analytics examples

Pricing Optimization

SPS works with clients to integrate pricing strategy and analytics to recommend a pricing architecture and process that will improve margins without sacrificing volume. We develop pricing models with estimates of value and price sensitivity by customer segment and product type, and we estimate customer-specific willingness to pay. We then recommend an optimized target price structure, including customer and product-specific recommendations, plus risk mitigation and a price management process. Equally important, we provide the client a durable framework for evaluating and updating target prices and managing deviations from targets, ensuring price optimization is a sustainable process.

New Product Pricing

For clients preparing to develop or launch new products into the market, Strategic Pricing Solutions works with your R&D, Marketing, Sales, Finance, & Pricing teams to identify market dynamics and customer segments and estimate value by segment.

New product pricing considers whether a new product is revolutionary, evolutionary, or me-too, and must also consider industry and competitive dynamics. Is the company is already a market leader or a new entrant? Is the market for this type of product growing? How will competitors react?

We present pricing strategy options and potential impact ranges, plus a recommended new product price structure.

Pricing Capability Development

We help build institutional capability within client companies. This includes change management planning & implementation, transferring our knowledge to clients and building expertise within client pricing teams, sales training, and process design to reinforce new pricing strategies and tactics.

To learn more about the Strategic Pricing Solutions approach to the pricing process click here

Client Success Stories

Our Blog

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Be Bold -It’s Time For Price Increases

We are seeing more and more evidence that prices are increasing in a number of markets, so if you are refining your pricing strategies and plans for 2015, be bold. Don’t wait until everyone else has raised their prices. Be confident and take the lead in raising your prices. Most markets appear ready for it.

So You Want to Price Strategically – What Do You Do Next?

You’ve read enough to understand your current cost-plus approach to pricing is nowhere near best practices and you want to price strategically, but your real challenge is deciding how to get there. It is not a trivial effort, but you can begin to make progress in developing your strategic pricing process by incorporating these major…

Lessons From a Price War

I often find myself in discussions with clients or potential clients about whether lowering prices to take market share is a good strategy. To illustrate the effects of trying to win with lower prices, I look back at this story, sent to me by a former service station manager in Texas. In 2010, my company started a price war with our local competitors. Within a week I saw the price of gas drop more than thirty cents, and my margins dissipate until we were losing money. The erosion of margins crippled the store’s ability to stay profitable, and by year’s end we were forced to shut down.”