In the recent context of increased costs and lagging demand, it has become even more critical that Carriers execute successful price increase campaigns.

Discover Open Pricer’s recipe for a successful General Rate Increase (GRI), leveraging the Rerating Campaign module.

Why are GRIs critical for Carriers?

Rate increases are a key business process for parcel and freight carriers for two main reasons:

  • Safeguarding Profitability

Rate increases are critical as they directly impact the profit margins of carriers. GRIs primarily aim to reflect rising costs of logistics, which carriers need to pass on to shippers.

  • Improving Value Delivery

Without sufficient revenue and profit, carriers might not be able to invest in the necessary infrastructure, equipment, and staff to provide the services customers expect from them. 

Why should Carriers start planning for their GRIs, now?

GRIs are typically announced at the end of each year, although in recent years, due to cost volatility, multiple GRIs in a 12-month period have become frequent.

Implementing a GRI is a high-stakes initiative that necessitates rigorous project planning: 

  • It is essential to establish a clear scope and objectives.
  • One must align all stakeholders’ expectations and ensure that the project’s goals are achievable and measurable. 
  • It requires cross-functional collaboration and effective resource allocation.
  • There is a clear deadline, as communicating rate changes effectively is crucial to maintaining customer satisfaction and minimizing disruption. 
  • Finally, adequate performance management principles (metrics, governance) will enable evaluating the success of the initiative.

Our experience shows that initiating the GRI project 5 to 6 months ahead of the planned effective date of the increase is crucial to successfully prepare and execute your next campaign. 

How to maximize the impact of your next rate increase campaign?

Here are 6 key areas to help carriers boost the impact of their next GRI.

1. Alignment & Executive Support on planning, targets and modus operandi

2. Data Analysis, Segmentation & Differentiation

We recommend that you avoid the ‘One Size Fits All’ approach because not all customers are the same. Instead, we would advise you to segment customers and differentiate the price increase they will receive.

  • Consider prices paid by similar customers.
  • Factor in your current competitive position in the market.
  • Evaluate willingness-to-pay (WTP) along with the risk of attrition/churn.
  • Align with your Business Strategy.

3. Customer communication plan

The messaging you build around the campaign shall enable you to minimize the friction with customers. 

4. Sales enablement

Sales teams will be instrumental in executing the price increase: the more confident, empowered, resolute they will be, the better for the bottomline. This could be done through:

  • Documentation of the increase (context, speech, value proposition…).
  • Sales review of the targets per customer: allowing them to review the individual targets will give you critical information for the success of the campaign.
  • Negotiation Training.
  • Compensation.

5. Flawless Execution

Formalize the sequence of events, from increase notification, to implementation of the rate change in the billing system. Here are a few tips:

  • Create customer level negotiation scenarios.
  • Equip your teams with the right tools to simulate the impact of the alternatives.
  • Establish a clear escalation process.
  • Monitor the progress of the campaign with weekly reports.
  • Streamline the workflows to secure the materialization of the expected impacts.

6. Tight Monitoring

A measurement of the impact of the price increase campaign on price and volume is essential to assess its success.

  • Identify the declared price increase impact.
  • Assess the volume and mix impacts.
  • Keep track of the trade-off and monitor the business afterwards.

It should now be obvious how complex successfully planning and executing a GRI can be. It is a high-stakes initiative that necessitates meticulous planning, flawless execution. It has to be supported with the right tools. 

Boost your next GRI campaign, with Open Pricer

Open Pricer is the only price management and optimisation platform dedicated to logistics.

With significant customer success stories in Europe and the Americas, Open Pricer Rerating Campaigns module is the solution you need to successfully prepare, execute and monitor your next GRI. Our customers typically measured an impact of 0.5 to 1.5 point of additional EBIT compared with traditional methods.

Rerating Campaign will support your pricing and sales managers to effectively plan and manage your campaign:

  • Define the scope of the campaign;
  • Analyze price disparities and uncover margin uplift opportunities;
  • Leverage multiple factors to differentiate rate increases based on WTP, current pricing performance, strategy, context and prediction of churn and attrition;
  • Create negotiation scenarios, with target and minimum price increase constraints;
  • Accurately forecast potential gains, incorporating foreseeable price dilution;
  • Orchestrate adequate governance through escalation processes and validation workflows;
  • Get real-time end-to-end visibility over the progress of each negotiation;
  • Monitor the financial impact of the campaign.

Our customers value how the solution is designed for: 

  • Quick adoption;
  • No Excel spreadsheets wandering around;
  • Differentiated increase recommendations based on tangible factors, and supporting the negotiation speech;
  • Capacity to create negotiation scenarios, allowing for better negotiation tactics;
  • No manual reporting;
  • A gauge enabling them to measure their progress against the target (which can translate in additional compensation).

In a nutshell, with Open Pricer, conducting a GRI generally results in: 

  • Shorter time to action;
  • Increased transformation and retention;
  • Improved experience and collaboration:
  • Increased profits.