Automotive Products Distributor & Manufacturer
Quick Wins & Pricing Roadmap for Margin Growth
Pricing Clarity & Discipline for Margin Growth
Granular pricing roadmap uncovers prioritized areas of growth, clear steps to completion, and delivers initial revenue return
A leading North American automotive products distributor faced inconsistent pricing and margin variability across customers and products. Through a qualitative pricing assessment and roadmap, the company implemented four quick wins and built models to measure ongoing improvement. The initiative uncovered a ~$30M pricing opportunity, delivering 1.5% revenue growth within the first year and setting a foundation for long-term margin growth.
Explore More Case Studies
Situation
Margin Variability Despite Strong Processes
- Sales had discretion to set prices, resulting in inconsistent pricing and margin variability across customers and products
- Strong sense of relative positioning against competitors
- Some segmentation and pricing structure in aftermarket channel, with opportunity to enhance across products and channels
- Established policies around price setting, adjustments, and communication, but lacking in discounting, promotions, and payment terms
- Limited pricing objectives to measure against or dedicated resources to improve ownership
- Primarily selling on price, with opportunity sell based on value and improve negotiations with larger accounts
- Client wanted to show pricing discipline and achieve quick-win improvements to support a sell-side narrative emphasizing future pricing upside
- Client recently gained visibility into customer-level profitability but had not yet acted on these insights
Thematic Learnings from Qualitative Interviews
Conducted 12 interviews with organizational SMEs
Pricing
Pricing approach varies by channel, including frequency of review and adjustment, contracts & negotiation terms, points of differentiation, source of price points, and ERP storage
Margin
There is limited ability to view if and how accurately price changes are passed through due to measurement challenges, leading to margin leakage. Additionally, there is an internal belief that Client can better differentiate margin targets across categories and channels.
Process & Controls
Utilizing a workflow tool to set pricing for largely cost-driven deals. Some price floors exist but there is limited governance.
Rebates and discounts are documented well, however, are complex due to acquisitions and successful contribution to margin is unknown.
Costs
Recent cost savings from vendor negotiations have been partially passed to customers. However, certain vendor relationships are not managed through procurement, affecting alignment.
Approach
Granular Pricing & Commercial Roadmap
- Conducted a qualitative assessment with internal SMEs and a pricing and data maturity assessment to identify infrastructure and process improvement strengths and recommendations
- Created a pricing roadmap outlining quick wins, near-term, and long-term actions
- Implemented four quick wins to drive immediate revenue growth, collaborating with pricing, finance, and sales teams
- Built opportunity models to quantify the impact of near-term quick wins
- Established a measurement dashboard to track pricing impact and margin improvement
- Supported the sell-side process with targeted analyses highlighting pricing value and future opportunity
Opportunity Roadmap
Sell-Side Support
Measurement Dashboard
Dashboard Capabilities
- Tracks price measurement, business performance, and key financial metrics
- Provides drill down tables by customer and product attributes
- Explains results through revenue / margin walks and trend analyses
- Monitors growth, churn, and price vs. cost relationships
- Data refreshed monthly for continuous tracking of implemented price actions and other KPIs
Stronger Governance, Stronger Margins
Clear processes and expectations turn complexity into revenue growth
