Pricing:

Services firm gets modernized pricing capabilities

The Situation

This global professional services firm was facing increased competition that was beginning to affect their margins. While they were #1 in their market, their competitors were moving to match the firm’s capabilities, and often at a lower price.

At the same time, the firm had neglected its pricing. The last list price update was 6 years earlier. New sales reps were sometimes given out-of-date pricing guidance (or they learned by “word of mouth.”) Large deals were struck with clients, without appropriate executive input or approvals.

In short, the firm’s pricing capabilities could generously be described as being in a “nascent state” that needed to be modernized.

The Solution

Team modernized and updated the firm’s price capabilities in multiple regions:

• Statistically analyzed the drivers of customer pricing, and analytically segmented the customer base
• Developed a pricing framework with recommendations and ranges for the sales force
• Revamped the pricing governance to ensure low-priced deals could be reviewed efficiently by the right people
• Incorporated price recommendations into SFDC
• Trained entire sales force on price ranges and new price governance

The Impact

The transformation was a great success. In multiple regions, the company The company successfully implemented the transformation in all major regions. Once implemented, the company saw a 50% reduction in low-priced deals and +7% accelerated profit. It had established ongoing price update capabilities. The pricing process was smooth; being tech-enabled, many deals did not need review, and those that did got the appropriate oversight and governance without it slowing deal flow.

The company was able to modernize its pricing capabilities and smartly compete in the market.