Pricing

We help large and medium-sized companies to develop and implement profitable pricing strategies. Our particular focus is value-based pricing, both for B2B and B2C companies.
Pricing integrates the processes of value creation, value communication, value capture and value documentation to align price with value: Competing on price is the price companies pay for not satisfying customer needs


Examples of our work

 

Value-based pricing in B2B

Initial situation 

Pricing mainly driven by costs and competition. 

 
What we did

Implementation of value-based pricing strategy.
Development of tools for sales personnel to quantify and communicate customer value to B2B purchasing professionals. 

 
Client results

Profits +15%, revenues flat.  

 
Our value-added

Unique capabilities in value-based pricing.  

 

 

Organizational transformation towards value-based pricing

Initial situation 

Pricing is largely cost-based. Current pricing approach is deeply entrenched in current mindset. 

 
What we did

Organizational transformation towards value-based pricing: development of pricing capabilities, appointment of Chief Pricing Officer, new incentive systems, improved price controlling system, new market segmentation strategy, new marketing and communication strategy. 

 
Client results

+ 3 million € in EBIT during project (18 months)

 
Our value-added

Unique insights into the organizational transformation towards value-based pricing; unique pricing tools; processes and tools to convert product features into quantified customer value

 

 

Value quantification in B2B

Initial situation 

Eroding margins due to sales personnel difficulty to justify price premiums

 
What we did

Implementation of tools to quantify and document value in B2B: value calculator, total value of ownership calculation; post sales value audits;
change in sales approach: from selling product features to selling documented and quantified business value

 
Client results

+ 1.5 € million in EBIT during project (24 months)  

 
Our value-added

Unique insights into quantification and documentation of customer value; deployment of value calculators and other tools; education of sales personnel to sell quantified value added instead of selling product features.

 

 

A structured approach to discounting in B2C

Initial situation 

Discount chaos: on similar transactions discounts and net prices vary dramatically

 
What we did

Analysis of pocket prices by product, channel, customer and sales representative; setting of target prices by product and by customer; capability building at the level of sales managers and regional sales directors; link sales force compensation to net price realization 

 
Client results

+ 1.5 € million in EBIT during project (24 months)

 
Our value-added

Deployment of pricing analytics to drive profits; deployment of price monitoring and price controlling tools; capability building to justify price premiums vis-à-vis competitors.   

 

 

The pricing of a breakthrough innovation in B2C

Initial situation 

New to the world product is ready for launch: initial idea is to set prices at premium versus key competitors. 

 
What we did

Decomposition of product into a bundle of benefits and quantification of customer willingness to pay via interviews and choice-based conjoint analysis.  Application of advanced price optimization modelling to identify the short- and long-term profit maximizing price points. 

 
Client results

Substantial price and revenue premium over original forecast. 

 
Our value-added

Unique insights into customer value-based pricing and consumer psychology. Price optimization to identify profit maximizing price points. 

 

 

Increasing confidence to increase profits in FMCG

Initial situation 

Lacklustre sales, widespread and inconsistent discounting despite strong product differentiation. 

 
What we did

Diagnosis of the fundamental problem not as lack in objective or perceived product quality, not in pricing strategy, tactics or organization, but as lack of sales personnel confidence; workshops with senior managers and sales personnel to increase individual and organizational confidence. 

 
Client results

Improved net price realization and strongly increasing profits during project period (12 months).  Substantially higher sales personnel confidence and motivation. 

 
Our value-added

Unique insights into the role of confidence as driver of pricing power and firm profits. Track record and experience in designing relevant,  confidence-building activities. 

 

 

Market segmentation and value communication in B2B

Initial situation 

Difficulties of sales personnel to sell right products to right customers; difficulties of defending price premium via competition

 
What we did

Development of two tools for sales representatives: a customer segmentation tool based on 8-10 questions and a segment-specific customer value calculator that quantifies customer value of next best alternative. As a result, the sales force has immediate insights into key needs of any customer segment and is able to quantify differential customer value versus next best alternative for all segments. 

 
Client results

+ 2% EBIT 24 months after project completion. 

 
Our value-added

Unique insights into customer value-based pricing, market segmentation and the role of customer value quantification to justify price premiums. Highly customized tools for sales personnel. 

 

 

Pricing of me-too products in B2C

Initial situation 

Management intention was to use cost-based pricing for a private label product in FMCG

 
What we did

Analysis of customer perceived value and of customer price elasticity to understand maximum willingness to pay and likely purchase quantities at different price points. Workshops with sales and marketing personnel to implement new pricing approach internally and vis-à-vis key channel members and customers. 

 
Client results

Price +25% versus original proposal, profits +500% over budget. 

 
Our value-added

Unique understanding of customer value-based pricing, drivers of customer value and price elasticity to determine profit maximizing price points. 

 

 

Benchmarking and improving pricing capabilities in B2B

Initial situation 

Lack of clarity on the role of pricing among sales and marketing managers; no common language; pockets of excellence, but big differences in pricing skills across business units and countries. 

 
What we did

Periodic benchmarking of pricing capabilities across business units and countries based on own, quantitative pricing capability-scale; development of pricing capabilities via projects, workshops, on-the-job trainings, and interactive simulations. 

 
Client results

Closing of pricing capability gaps; systematic identification of best practices; 2% improvement in net price realization. 

 
Our value-added

Ability to quantify pricing capabilities; ability to design and implement measures that jointly improve results and client capabilities. 

 


Pricing is the most important driver of profits; surprisingly, it is also the area most executives overlook.
This research shows how to overcome common Pricing misconceptions.
   Read more

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HINTERHUBER & PARTNERS
Falkstrasse 16
6020 Innsbruck
Austria

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