We work with your team to think strategically about pricing; segment your markets; analyze your invoice data; and rebuild your pricing structures to maximize your profitability. We help you build the guidelines and process metrics to ensure effective execution. We help you train your sales force in the practical and cultural dimensions of this process.

1. SPA Pricing Program
90-Day Review of All Pricing Elements
Focus on Impact:
New List Prices
Distributor Discount Structures
Rebate Programs
Direct Customer Pricing
Diagnostic Interviews to evaluate current
effectiveness and gaps, strategic
opportunities
2-4 Weeks of IT, Staff Time
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2. SPA Pricing Program
Training in Strategic Pricing Principles and
analysis of actual pricing practices to
develop new price structures to improve
profitability
Each business unit submits 12 months of
invoice data to SPA for analysis to develop
recommendations at the customer/sku
level and to profile product sensitivity
2 Training/Implementation meetings; plus
sales force and process training
Team Participants
General Manager, Head of Sales, Marketing, Product Mgt
Division Pricing Manager
Divisional I/T
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3. Strategic Pricing Workshop Structure
Workshop I
Quick Wins &
Data Set-Up
• Shipping &
Handling
• List Price
Cube
• Rush/Small
Order
Premiums
• Clean up and
standardize
price files
• Prepare for
indexing
account review
• Sales rep
education
preparation
Workshop IIA
Workshop IIB
Workshop IIC
Standard
Pricing
Structure
Exception
Pricing
Structure
Process
Management
& Sustainability
• Set pricing
standards by
customer type/
size
combination
per product
family
• Divide product
families into
Core vs. NonCore
• Larger
Accounts
• Customer/SKULevel RecCommendations
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• Set standards
for sales force to
sell value and
manage prices
• Pricing Metrics
• Customer Index
• Rep Index
• Continuous
Improvement
• Generation II
Concepts
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4. Thoughts About Pricing
•
•
•
•
•
•
•
Pricing is a “contact sport”; if your uniform isn’t dirty, you
weren’t in the game
Don’t build your strategy around your exceptions: the best
policies will have exceptions; the key is to manage/limit them
The optimal level of pricing complaints is not 0; otherwise you
are not pricing to resistance
Use data to make decisions
Price pressure usually indicates a lack of differentiation
between you and your competitors: What do you have to do
differently to price to value?
Focus on reducing the price sensitivity of your accounts over
time
You don’t have to be perfect to win
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5. Next Steps
•
•
Please visit the SPA website: www.strategicpricing.com
Take A Free Pricing Opportunity Profile :
www.strategicpricing.com/offer/profile/
•
•
Upcoming Free Events:
Webinars held several times per month; check SPA website
•
SPA Strategy Seminars
•
Full-day seminars, held several times per year in cities worldwide; check SPA
website
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6. Calculating Pricing Potential
in
Your Businesses
• Gross Revenues, less:
• Fixed-contract pricing beyond 1 year
• Equals “Net Revenue in Play”
• Times Impact Percentage:
• 1 percent:
• 2 percent:
• 3 percent:
• 4 percent:
low estimate
conservative estimate
good estimate
excellent performance
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7. Summary
•
The current economy requires urgent action to develop a
pricing architecture and compensating pricing layers
•
Strategic pricing is a big opportunity for manufacturers and
distributors, generally 2+% of revenue
•
Can improve a company’s net profitability by 20% or more
•
The drivers of the opportunity are clear
•
To be effective, a pricing program needs to be data-driven, to
translate strategy into actionable plans
•
Long-term commitment; pricing czar; executive sponsorship;
persistence; and channel engagement are keys to success
•
Pricing is a specialized discipline where expertise has huge
payoff in impact and speed of execution
•
•
Cost plus mentality and sales rep discounting practices
Complexity of product lines, customer base
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