Opportunity/Problem Statement

‍Revenue and margins were eroding year over year within the European markets and impacting North American objectives. Client was in dire need of maintaining revenue growth track while expanding margins in selective customer segments and product categories.

Action Taken:‍

Customer segmentation and rationalization which lead to micro-segmentation and targeted pricing strategies based upon like purchasing propensities in order to identify areas of strength. Identified “cherry pickers” with high quote numbers and low to order ratios. Immediately, instituted relative price floors to lift overall marketplace for select product lines and customers within the quoting process to alleviate pressures.

Leveraged analytic insights to improve the yearly List Price Optimization, to align perceived market prices with new targeted Pricing Strategy.  Then, moved to Net Price Optimization to align price sensitivities to the micro segments for select customer/product combinations.

Finally, an analytics suite was created with a pricing support group.  

Benefits  

• Eliminated ‘cowboy’ pricing by creating strategic guidelines for each customer segment. Increasing prices on roughly 20%of products by an average increase of 4%
• Repriced certain products for select customer segments, average reduction 7%, to increase Customer Lifetime Value in targeted market penetration in attrition areas
• Margins increased by an average of 2.3%including the products that were repriced lower
• Revenues, increased by 8.3% above projected sales goals and increased winning bids by 12%
• Projected ROI for the following 12 months from project completion: 14X

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