Commercial Services Provider
How Well Are You Pricing To Sustainably Grow Profits?
Revolutionizing Pricing with Data-Driven Solutions
Empowering sales teams and unifying processes to deliver $100M in price impact.
Facing decentralized processes, inconsistent pricing, and low CRM adoption, a U.S. market leader sought to align pricing with their product and service value. INSIGHT developed a nationwide market-based pricing model, integrated it into their CRM, and provided sales teams with accessible, data-driven recommendations. In-person workshops engaged sales reps, while our analytics engine tracked compliance and performance. These solutions delivered $100M in price impact over four years and equipped the client to sustain success with enhanced systems and training.
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Situation
Aligning Pricing Strategy in a Complex Landscape
- Made a large investment in Salesforce.com for quoting needs, but complex pricing factors made it insufficient for their needs
- Struggling to get adoption across their sales team
- US market leader but not pricing appropriate to their product and service offerings versus the competition
- Limited price guidance, segmentation, or tools in place across nine regions
- Aggressive acquisition strategy led to decentralized processes
- Significant and unpredictable price variation
Deep Understanding of Current State
Conducted in-depth qualitative and quantitative analysis to build a quantified opportunity summary and supporting implementation plan
Key Learnings from Analysis:
- Internal pricing strategies weren’t tied to value offered or cost – e.g., unit rental price did not account for labor, delivery, and ancillary services and in some cases were providing discounts
- Pricing decisions were made by siloed reps trying to get a sale
- Unique position and scale created significant pricing power
- Strong corporate leadership was critical to driving desired behaviors
- Pricing processes and tools were needed to support the business, not weigh it down
Example: Regional Variation
Significant price variations across branches within the same region
Example: Cost Structure
Cost structure was heavily driven by number of weekly services; organization rewarded opposite behavior
Example: Service Charge Variation
Variation on extra service charges by region, branch, individual
Approach
Innovative Solutions for Market-Driven Pricing
- Created nationwide rental rate pricing targets through a market-based pricing model
- Integrated the pricing model into the existing CRM, including all necessary pricing factors and better quoting recommendations, providing the sales team the ability to access data driven recommendations within their current systems and processes
- Engaged sales reps by conducting in-person pricing-focused workshops
- Generated measurement engine to track results and sales rep compliance and performance
Impact Process
Differentiated Pricing Implementation
Explored customer, product, and order attributes to align on pricing power and key factors relevant for the pricing model, while mitigating risk.
- Primary Model Factors – Bold
- Secondary Model Factors – Italicized
- Tertiary Model Factors – Standard
Quoting Application Integration
Quote Application Benefits
- Agile approach: began with excel-based tool, followed by web-based application, then integrated into CRM
- After launch, high user compliance to pricing recommendations
- No change to historical win rates
- Some regions saw price impact results >20% when using the quoting application
- Simple to maneuver; did not slow down or delay the quoting process
- Ability to provide the optimal price target while on the phone with a customer
- Allowed easy incorporation of price increases with simple updates
Driving Impact Through Measurement
- Example Change Management Reporting: # Quotes, Win Ratio, Order & Price Compliance, Unit Pricing Trends
- Example Measurement Reporting: Price-Volume Trends, Price Realization, Unit Quantity Trends, Price Sensitivity, Seasonal Trends
(shown left: example price sensitivity scorecard to monitor how changes in price are affecting KPIs and where price model changes might be needed)