In most enterprises we can identify profit leakage due to unjustified price disparities among customers. This is the consequence of a lack of discounting guidance and control, price implementation errors or inefficient contract monitoring.
Price Increase Campaigns give you a strategic momentum to eradicate these profit losses and price disparities. We have developed a proven methodology to reach these goals, where every customer’s price and margin are compared against the price and margin of peer customers (i.e. customers that have similar characteristics, service levels and transaction profiles) to derive a price and a margin score. Based on this analysis, we will provide you with :
- Rerating recommendations by customer and product
- A classification of customers into different groups requiring specific actions: regular price increase, higher price increase, moderate price increase, service upgrade, cost of service optimization…
- A realistic estimation of potential gains for each customer
- A step by step methodology to materialize these gains
Increase Net Margin
Fairly differentiate customer contracts increase levels based on peer price analyses. Stay on track by limiting exemption requests through a workflow. The typical minimum effect is +1 point of net margin (e.g. 1 million euros for a company with a 100 million euros turnover) compared to traditional methodologies.
Reduce Price Disparities
Identify customer contracts lagging behind their peers in terms of price and contribution. With this service, you will be able to take action with tangible and objective criteria to reduce these price disparities, preventing value dilution.
Improve Customer Retention
It is well known that the cost of acquiring a new customer is 5 times higher than the cost of retaining an existing one.
Identify customer contracts potentially at risk due to a price significantly above market threshold. Easily define ad hoc retention strategies such as controlled rate migration plans.