Pricing Strategy FAQs
We believe there is a difference between just ‘doing pricing’ and maximising the pricing opportunity, which means most businesses are not doing as well as they could, don’t realise what they are missing and invariably are ‘leaving money on the table’. Here are some of the questions we’re asked.
How can you help when we're happy with our pricing?In our experience most of our clients became clients despite saying they were happy with their pricing. The feedback that we often receive is that “they didn’t know what they didn’t know” when they endeavoured on the pricing project. Our expertise uncovered hidden pricing optimisation opportunities that unlocked further value and contributed to margin improvement. Again, adding on average 2-5% to margin expressed as a % of revenue.
Why should we review our pricing?We have successfully uncovered and improved our clients’ profitability, typically adding on average 2-5% to margin expressed as a % of revenue.
On every £100 million of turnover, you are effectively giving away between £167,000 and £415,000 a month in margin by not starting a price optimisation project.
It is a huge opportunity to dismiss. Our collaborative approach means that we will work with your business and adapt our approach to the situation and challenges you may currently be facing. As a result, there is no reason to ignore or delay capturing pricing opportunities.
We observe that our recommendations typically deliver on average 10-20x return on investment expressed as a multiple of our fees.
Have you experience in our specialist/niche sector?We work across a wide range of sectors with most of our clients experiencing unique challenges in very specialist areas. We typically observe that however specialist a client’s business, there is always room to improve pricing. We pride ourselves on our personalised and innovative approach to handling these situations.
Despite our broad experience, we often find ourselves working with a client in a new sector or industry where we do not have prior experience. One of our key values, and a contributor to our success, is our ability to ask the right questions and listen carefully to ensure we’re uncovering the right information to guide our work. We are also firm believers that our clients are sector experts, while we are pricing experts. Working collaboratively, another core value, this combination and approach is powerful.
How can you add value when we have an internal pricing team?We believe there is a difference between just ‘doing pricing’ and maximising the pricing opportunity, which means most businesses are not doing as well as they could, don’t realise what they are missing and invariably are ‘leaving money on the table’.
Several of our clients have large teams (30+ people) dedicated to pricing and yet they still seek our expertise to optimise their pricing. They acknowledge our expertise is derived from our specialist focus on pricing - we do this every day – including analytics, methodologies, proprietary tools and commercial acumen.
We observe that optimising pricing improves margin by 2 – 5% of revenue. For every £100 million of revenue, we typically add £2–5 million to the bottom line (margin). Or between £167,000 and £415,00 per month for every £100 million of turnover.
We have used consultants, what makes you different?Other consultancies ‘do’ pricing and offer a wide range of other consulting skills. We are pricing specialists, it’s all we do. In our experience, non-specialist pricing consultancies tend to be more limited in their pricing scope and focus on the analysis and recommendations but not on implementation. Indeed, their insights and recommendations tend to ignore implementation leaving their clients struggling to derive any impact from their pricing work.
We believe that implementation and monitoring are crucial. So much so, that our insights and recommendations always consider the implementation requirements and importantly the client organisation’s ability to implement. In many cases we help our clients with improving capability and work with them to successfully implement our recommendations.
Again, adding on average 2-5% to margin expressed as a % of revenue.
We observe that our recommendations typically deliver on average 10-20% return on investment expressed as a multiple of our fees.
What pricing challenges don’t you do?There are some areas in which we don’t do pricing. These are:
- Equities, Bonds, and other financial instruments
Our focus is on all other areas of pricing where humans make decisions and where pricing affects their choices.