Recently, one of our clients—a sales executive at a leading chemical manufacturer—was facing a problem that we see time and time again in negotiations. Our sales executive, let’s call him Bob, had submitted an RFP response for a contract renewal. Bob’s customer came back and stated that a competitor had offered a significantly lower price. To make matters worse, Bob was informed that if he didn’t reduce his price, all the business would go to his competitor. Unfortunately, Bob’s feet were being held to the fire internally, as the customer in question contributed a significant amount of revenue.
Topics: Negotiating with Backbone
You probably heard about MoviePass by now. For those who haven’t, MoviePass is a subscription that allows you access to a large theater network for a low monthly fee. Not only does MoviePass create more customer visits in theaters, but increased spending on concessions, leading to overall incremental revenue for the industry.
Topics: Pricing with Confidence
After visiting family in India over the holidays, I was scheduled to fly back to the US. But due to unforeseen circumstances, I had to change plans. So naturally, I looked into rescheduling my booking with Emirates. I initially bought the ticket at INR 60,000 which is equivalent to $900. It was peak season, so the price was higher than normal. The price for the new date of travel, now out of peak season, was INR 50,000 plus a reschedule fee of INR 3,500. So, I happily called Emirates to reschedule, assuming that I would get back INR 6,500 with the new booking.
Do you deliver value that is not captured in price? Do you provide services that are under-appreciated by your customers? If you answered “yes,” you have lots of good company. We constantly see organizations miss the potential to capture value because of misaligned price metrics, offering extra services above and beyond contract agreements, all you can eat offerings, and poor tracking of value delivered.
Topics: Uncovering your Value
Mayuresh Saravanakumar lays out his framework in the video below for creating a simple approach to pricing analytics success: Identify, attack, and monitor.
In the previous three articles in the series What Gets Measured Gets Done, we discussed some basic reporting that every pricing and/or sales operations team should use to drive improved profits for the business. In this last article of the series, we are going to talk about uncovering the drivers of discounting and the effectiveness of an organization's profit improvement initiatives using a combination of waterfall analysis and Pareto analysis.
Topics: Pricing with Confidence
In my previous blog post, “Discounting Control Tool of Choice- The Price Plot” we discussed how a price plot, a very simple tool, can help an organization uncover very deep insights.
Last week in my blog post "What Gets Measured Gets Done”, we discussed how important it is to measure pricing data to support insightful decision making. As a continuation of last week’s article, let’s discuss the approach we took for one of our clients - specifically the price plot. We prepared a price plot to understand the overall discounting culture in the organization. While this price plot is very simple, it is very powerful in showing the overall discounting habits of the organization.
One of our large, multinational clients was aggressively addressing the discounting culture pervasive in the organization. With various verticals, multiple product lines and more than 10,000 customers they were struggling to measure the effectiveness of the various pricing initiatives and identify areas to prioritize efforts for maximum impact. Because of the magnitude and complexity of the organization, they got stuck in the weeds with day to day problems.