Pricing
Achieving significant and sustainable gains in profitability through superior pricing and margin management.
Pricing is the most sensitive profit lever that managers can influence, where very small changes in average price translate into huge changes in operating profit—to the benefit of a company when average price goes up, and to its detriment when average price goes down. Through enhanced price management and capability building, most of our clients can sustainably improve their return on sales by 2 to 7 percentage points or more within 1 year.
What we do
We help clients achieve pricing excellence by identifying opportunities—and issues—that fall into three distinct but related levels:
- Market strategy, where we look to understand how market structure, micro-economics, and conduct affect overall market price levels
- Customer value, which creates an understanding of the pricing level and structure that best positions your offering against the competition so as to maximize the value captured in each target segment
- Transaction level, where the exact price to charge each customer is set
We develop approaches and programs to capture those identified opportunities, and also work with clients to:
- Craft the infrastructure—pricing processes, organizations, systems and tools, and performance management approaches necessary to support the pricing function in a business
- Build client capabilities to sustain pricing improvement
Examples of what we do
- Helped an industrial supplier standardize discount terms and conditions, and increase price on low-volume products, leading to a 5 to 7 percent return on sales