How We Can Help
If your goal is to improve financial performance quickly through pricing, you are in the right place. Better price management is typically the fastest path to finding hidden revenues and reaching higher margins. This is the realm of low hanging fruit. This is the $20 bill you find floating in the dryer. This is the “Bank Error in Your Favor” card in Monopoly. No matter what your pricing belief system — cost based, market based or value based — there are price management opportunities to be exploited. This means pricing pays its own way.
A good rule of thumb is: improve management first and then invest part of the proceeds in strategic pricing improvements. Better management can help any pricer put more money in the company’s pocket. Even as you read this, one of our clients is working on increasing overall revenues by 3% this year from better price management alone. Our experience is that any company can increase revenues by 1-3%, with virtually no costs, through price management. For a $300M company, that is $3M to $9M in pure profit! Rewards from improved margins through better management more than make up for the costs associated with getting them.
Why is price management a sure fix and an easy fix for many companies? The answer is fairly straightforward. As price consultants, we have had multiple opportunities to benchmark company prices against peers. When we do, we routinely find that managers over-estimate the
- Degree of price competition they face, and the
- Price sensitivity of their buyers.
Through better price management – process, controls, structure, tools and incentives – we encourage more responsible pricing behavior with both sales organizations and channel partners.