Life Sciences pricing strategy
Unstructured customer discounting. Significant variation in sales team negotiation experience. Broad range of customers (size, sector, geography) requiring tailored negotiation strategies.
Main challenges faced were:
- Weak relationship between discounting and account revenue
- Multiple failure points observed making discount control difficult without enhanced focus on process and organisational behaviours
- No standard sales negotiation approach
- Sales reps avoid price discussions
- Sales reps consistently underestimating customer value
- Limited price governance
FORMAL ACCOUNT REVIEW
Process designed to help sales rep: Understand current ‘pricing power’; Identify new revenue opportunities; Create a 3-year strategic plan
Before suggesting: Negotiation strategies & tactics; Pricing strategies; Areas for relationship improvement and growth
To develop a process applicable to all customers including: Strategic decision support tool – suggesting negotiation strategies; ‘Pricing Power’ & Strategic Customer frameworks; Account insights questionnaire; 3-year Account Plan
And to embed this process in BAU: Sustainable RACI framework; Governance and authorisation recommendations; How-to-guide & support materials for all processes
DISCOUNT REDUCTION of 4.3%, exceeding project target by 2.6%pts REVENUE GROWTH of up to £5m in Y1, with a further £8.9m possible in Y2 and Y3 totalling £13.9m over 3 years (equivalent to 8% rev growth) PRICING Embedded a structured & collaborative sales process which will drive future consistency in customer discounting. Increased the confidence of the sales team to negotiate price. Automation of negotiation strategies decision process driving efficient pricing reviews of hundreds of accounts.