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Maximize Your Profits

Strategic Pricing

Case Study

Client:

Industrial

 

Situation:

Key client wanted to improve profitability with pricing globally across a $1.5B portfolio, and institutionalize a best practices based methodology (WWG’s value-based segmentation driven).

 

Action:

  • WWG developed and launched a focused segmentation driven pricing strategy - efforts followed a cadence: customize playbook, gain buy-in to playbook, build implementation team, set up governing council, train global team and implement.

  • Executed the strategic pricing program along two angles:

    • Phase 1 – focused on ‘Quick Wins’ that looks for opportunities around the portfolio trends (Tail, Low Margin Clusters etc).

    • Phase 2 -  focused on Customer Segmentation (along key criteria) and Value Creation Capture (identifying what value client adds and creates for the customers’ operations and cash flow relative to next best alternative and establishing a pricing position to capture a % of same).

  • Built a custom XL tool for Quick Wins analytics. A plug and play model. Pricing software firms sell similar for $1M or more.

  • Identified areas of improvement in pricing management and trained a global core group of believers/SMEs in segmentation and value creation based pricing.

  • Customized a WWG tool for customer actions plans (CAPs) that highlighted customer specific value provided amongst other key factors needed to realize full price.

  • WWG issued a detailed Playbook and customized tools to facilitate the adoption of the strategic pricing discipline.

 

Result:

  • Exceeded AOP (annual operating plan) and GD goals despite the cultural challenges. Increased 100% budgeted pricing globally resulting in $21M annual cash flow.

  • Asia outperformed other regions in pricing contribution for the first time in company’s history.

  • A full adoption of the CAPs tool and its impact on business/customer insight and discussion - > 400 CAPs generated globally.

  • Revamped work processes and analytical tools used in value creation assessment and customer management leading to redesigned quantifiable value propositions.

  • Overall moved the organization away from an input cost driver based, and a one size fits all, pricing approach.

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