Insights

Making Scientific Pricing Actually Deliver

Capabilities, enablers, and margin uplift

For practical advice on how to implement a more scientific pricing approach to customers, we highlight three capabilities companies need to build, linked to three enablers to drive up to three percentage points of margin (or five points of sales growth).
I know there is a better way to do it, and I know that pricing can be the biggest thing we do this year to drive profits, but I’m not sure where to begin.
President of a $2bn company

This paper summarizes the best approaches we have seen distribution companies use to improve pricing, and outlines a basic methodology which we have seen work successfully many times. The key? Firstly, developing a robust understanding of the powerful and practical science behind pricing, specifically: your cost dynamics, price sensitivity and local market competitiveness. Secondly, engaging the business –particularly the sales force – in the solution. Thirdly, building pricing competence at the corporate center, including better processes and decision support tools to sustain the benefits.

Making Scientific Pricing Actually Deliver

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