The Challenge
The QoP assessment quickly revealed an unstructured pricing strategy creating significant variation:
- Indiscriminate “peanut-butter” spread approach to pricing lacking customer and product segmentation
- Limited pricing structure and process
- Commercial team infrequently selling on value and discussing price with customers
- Inability to analyze and report at the customer and product levels
The Solution
The QoP assessment identified immediate opportunities for price differentiation to yield financial impact pre-transaction and multiple incremental margin improvement areas. The new strategic price increases were based on sales velocity, market pricing, margin floors, and volume discount caps. INSIGHT also developed an opportunity roadmap that identified incremental profit improvements.
- Identified relevant price drivers for pricing model and additional customer and product attributes to enable critical granular data analytics (growth accounts, competitor pricing, etc.)
- Established new list prices based on good/better/best value proposition
- Implemented differentiated value-based price adjustments based on vendor and product category
- Created formal sales processes and account ownership, and built pricing confidence across the organization through INSIGHT’s salesforce effectiveness program – including workflows, playbooks, trainings, KPIs, and sales operations
- Developed a path to implementation with both quick wins and longer-term improvement areas such as price optimization, segmentation, and cross selling