Diagnostics:  a Pricing Scan to Identify the Value potential.

A Pricing Scan will provide you with actionable insights: ‘Where are you underpricing? Where do you have price leakage?’ Positive outliers will enable you to improve the performance of your team. For instance: which of your Account Managers are achieving structurally higher prices than their peers? Moreover, how can you replicate their success to other Account Managers in your organization?

It all starts with these insights to identify the improvement potential of your current: a) price buildup (waterfall), b) pricing processes, c) capabilities, d) organization, and e) systems & tools. Commonly identified objectives are:

Stop the bleeding: Eliminate price leakage

Perform diagnostics on the realized prices in your running business. A ‘scatter plot’ of realized prices will enable you to quickly identify outliers in the realized prices. Customers that are paying a too low price can be added as a “price opportunity” to the Sales Funnel that your Sales Reps can follow up. This will not structurally solve any issues (see ‘prevent future bleeding’ below), but it does offer low-hanging fruit in improving your margins.

Prevent future bleeding: Setup a controlled pricing process

By setting up a well-controlled Pricing Process, supported by the right systems and tools (e.g. a CPQ module integrated in your CRM system) you will be able to prevent ‘future outliers’. Quite often this also involves setting up the Pricing Organisation, as the relevant required roles might not yet exist in the organization

Realize the Upward Price Potential: Margin Management

Margin Management connects the capture quoting, pricing, and price management.

• Build a transparent price waterfall that offers insight into cost price, rock-bottom price, and target price
• Leverage your Customer Segmentation by defining a strategy per Customer Segment that allows you to grow profitable segments and eliminate unprofitable ones through adjustment of service levels or price differentiation
• Prevent price leakage through a well-managed pricing process that also covers the exceptions, i.e. what is the (automated) process for request and approval of pricing exceptions
• Empower your Sales Reps with actionable insights that will allow them to realize the upward price potential during negotiation and deal closing

Related Content: