Packing and Label Manufacturer
Is Low Price Realization Affecting Your Margin Growth and Profitability?
Established a price change process and measurement methodology, driving $21M in margin impact over 4 years.
Streamlining Pricing Strategy to Unlock Growth
Unified tools and data drive a $21M margin impact and 90% price realization over four years.
Following mergers and acquisitions, a client faced declining margins and fragmented pricing practices across business units. INSIGHT developed a centralized master data source, a custom pricing model, and a tailored quoting application to align pricing with business value and market dynamics. Measurement tools were implemented to track and manage price impact effectively. These solutions delivered a $21M margin improvement over four years, achieved 90% price realization, and established a unified approach to pricing and performance management.
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Situation
Navigating Complexity to Drive Pricing Excellence
Addressing fragmented pricing, margin decline, and growth opportunities with unified strategies and systems.
- Pricing is complex due to a wide range of services, different competitive profiles, and ability to customize products
- After a series of mergers and acquisitions, new leadership wanted to understand margin decline and opportunities for growth
- Historically, the client struggled with price realization, vendor cost increases, and the ability to measure impact of pricing initiatives
- Limited product segmentation, including pricing distinct or custom offerings lower than commodity offerings
- Each business units handled pricing and cost differently, and there was a desire for a more unified approach, including supporting systems to understand and measure performance
Approach
Building Smarter Pricing Solutions
Centralized data, custom tools, and precision models to streamline pricing and drive results.
- Developed a central master data source to remove all offline excel work
- Built a custom pricing model that accounts for their unique business value based on products, services, and markets to set target margin recommendations for new and existing customers
- Built and implemented a tailored quoting application with the ability for client to experiment with and adjust model parameters
- Built measurement tools to accurately measure and manage price impact
- The scatter chart is reflective of individual customers and products (color is reflective of product line)
- The bottom right quadrant (highlighted in red) shows areas where client had cost increases but didn’t raise prices thus eroding margin
- Company was lacking process to ensure successful price adjustments and pinpoint which customers and products to address
Integrated quoting app to ensure usage and adoption of price and margin recommendations
Impact
Driving Exceptional Margin Growth Through Pricing Strategy
A transformative approach delivers significant financial impact and improved pricing adoption.
$21M
Margin impact over 4 years
90%
Price Realization
Adoption of price and margin recommendations
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