Infrastructure and Construction Services
Created Robust Pricing Framework and Strong Pricing Culture to Drive Margin Growth
Developed a pricing framework and instilled a pricing culture, driving 4.1% margin growth
Building a Pricing Culture: A Strategic Framework for Margin Growth
An Infrastructure TIC & Construction Services provider implemented a value-aligned pricing framework, driving 4.1% margin growth and organizational buy-in.
With a complex business structure spanning multiple locations, markets, and service lines, this Infrastructure TIC & Construction Services provider struggled with inconsistent pricing and a lack of centralized data. Regional and project-based pricing decisions made standardization difficult, while historical data lacked the necessary details to inform pricing strategies. To address these challenges, the company designed a strategic pricing framework, embedded margin guidance into existing tools, and developed a Pricing Center of Excellence. The result was a 4.1% margin growth, standardized pricing expectations, and a cultural shift towards pricing accountability.
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Situation
Decentralized Pricing Challenges in a Complex Business Environment
Inconsistent pricing, poor data quality, and regional variations created barriers to margin optimization.
- Poor historical data that lacked quality details such as key job attributes
- High degree of business and systems complexity spanning ~125 locations, 7 end-markets, multiple service lines, >10k customers, and >40k projects annually
- Rough margin % targets exist by region but many pricing decisions occur by location and salesperson
- Centralized, standard pricing difficult to implement due to regional and project-based differences
Approach
Establishing a Pricing Framework to Drive Standardization and Performance
By embedding margin guidance, centralizing data, and fostering a pricing culture, the organization improved pricing discipline and profitability.
- Designed a strategic, value-aligned pricing framework that determines target margins based on market segment, technician specialization, and job requirements
- Embedded margin guidance into client’s existing pricing tools via API to reduce process changes for sales team
- Instilled a “pricing culture” for the field estimators by providing credible, defensible recommendations
- Created a centralized dataset for analytics to provide a trustworthy feedback loop of results
- Developed a Pricing Center of Excellence that includes a degree of centralization and performance management
Pricing Framework
Developed methodology that transformed the pricing process to be based on facts, informed judgement, transparency, and continuous improvement
Organizational Buy-In
Leveraged available data and strategic workshops to drive change management through the Client’s business
Impact
Pricing Alignment Drives Margin Growth
Standardized pricing and team buy-in delivered lasting results
4.1%
Margin Growth
Standardized pricing expectations
Organizational buy-in and culture shift
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