Why Pricing Enablement?
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The Pricing Enablement Center
Most pricing projects stop as soon as the implementation of a new pricing
strategy is under way. But without the right internal capabilities, it is quite
possible that the initial results you’ve worked so hard to achieve will slowly
fade with time.
Now is the time to sustain and magnify your results.
Pricing Enablement boosts your organization’s pricing capability, allowing
your people to extract the maximum value from pricing long after our
consulting team is gone.
As a result, your team remains capable of capturing an even greater portion
of the significant opportunity we help identify in a typical pricing project.
Pricing Enablement Helps Companies Sustain
and Magnify Initial Project Results
Traditional
pricing
project
Pricing Enablement project
Post-Enablement results
Return
on
spending
Total opportunity identified
.
Impact from the Pricing Enablement project
Impact from a traditional pricing project
Project timeline
(continued on reverse)
What We Offer
Our Pricing Enablement program includes five core elements:
•
•
•
•
•
A pricing-maturity assessment
Talent assessment, sourcing, and development programs
Trainings, academies, and coaching
Best practices and benchmarks on running the pricing function
Tools and IT system navigation
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The Pricing Enablement Center
We tailor our programs to the specific needs of your organization. We help
identify key areas in which capability improvements will drive step-change
business results, and we work with you to take your pricing function to the
next level.
Our dedicated experts in BCG’s Pricing Enablement Center collectively have
decades of experience in building pricing capabilities across a wide range
of industries. We work with your team to assess your pricing capabilities,
identify the right talent, transfer the required skills, improve your tools
and systems, and align the overall organization to achieve superior and
sustained pricing results.
For further information, please email us at: [email protected]
© The Boston Consulting Group, Inc. 2013. All rights reserved.
How We Assess Your Pricing Capability
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The Pricing Enablement Center
Pricing is a complex task. We find that even the strongest organizations
have areas in which they need to up their game in order to capture the
maximum benefits of a pricing strategy.
To gauge a company’s starting position, our Pricing Enablement program
typically begins with a comprehensive maturity “health check” across all
pricing elements. We evaluate the status quo and compare the company’s
capabilities with industry best practices. This maturity assessment allows us
to determine the key capability gaps that must be addressed to improve the
company’s pricing results.
Key Areas We Assess
During the pricing-maturity assessment, we aim to answer critical questions,
such as the following, about the health of your pricing organization.
The Elements of a Pricing-Maturity Assessment
Client pricing group
Tools and
resources
Strategy
and execution
Processes and
decision rights
People
and talent
Organization
Aspirations, desired results,
context, and constraints
Strategy and Execution
• Do you have a clearly defined and well-communicated pricing
strategy?
• Is your pricing strategy working?
• Does your pricing strategy support your overall business strategy?
(continued on reverse)
Key Areas We Assess (continued)
Processes and Decision Rights
•
•
Is there clearly defined ownership of and accountability for
pricing decisions?
Do you have robust pricing processes that are well understood throughout the organization?
Organization
•
•
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The Pricing Enablement Center
Does your pricing group have sufficient resources to drive effective
pricing decisions?
Do all areas of your business—marketing, sales, finance, and
leadership—understand their roles in setting prices effectively?
Tools and Resources
• Is there an effective set of pricing metrics across your organization?
• Are effective systems in place to gather and disseminate relevant information?
• Do you have the right tools for evaluating the effectiveness of pricing and discounting programs?
People and Talent
•
•
Does your organization have the required strategic and analytic pricing expertise?
What skills can you build internally and what expertise do you
need to bring in from outside the organization?
For further information, please email us at: [email protected]
© The Boston Consulting Group, Inc. 2013. All rights reserved.
Our Talent-Development Approach
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The Pricing Enablement Center
Our Pricing Enablement program helps ensure that you have the most
talented pricing experts in your organization—with the right combination of
analytic skills and pragmatic business acumen. We assist you in identifying
talent needs, assessing current talent, acquiring talent from external
sources, and transferring required skills to your organization.
Our Approach to Talent Development
Talent planning
Talent assessment
Determining talent needs on the basis of strategic and business
requirements through, for example, capability mapping and role
requirements
Strategy
Evaluating current talent levels
and developing plans to retain
top talent
Planning
Assessment
Exit
Talent development
Developing capabilities aligned with
business requirements and strategy
Development
Acquisition
Talent acquisition
Sourcing capabilities that do
not already exist and cannot be
efficiently developed
We focus on critical aspects at each step:
• Planning. Identifying the key pricing capabilities you need in order to deliver against your business objectives
• Assessment. Evaluating the capabilities of your people and identifying
key gaps relative to your talent plan
• Acquisition. Finding, recruiting, and bringing new talent on board
• Development. Building the right set of skills inside your pricing
organization
(continued on reverse)
How We Transfer Skills to Your Organization
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The Pricing Enablement Center
Our pricing experts have deep expertise in a broad range of pricing topics.
We leverage this expertise to transfer critical pricing skills to your
organization.
Our curriculum, which covers 32 pricing topics, can be customized to meet
the development needs of people in your organization.
Our Proven Pricing-Enablement Curriculum
1
Pricing strategy
and architecture
1. Pricing fundamentals
2. Market structure and
pricing power
3. Value extraction
4. Pricing along the life cycle
5. Pricing basis and structure
6. Opportunity identification
7. Basic pricing mechanisms
(such as auctions, bids, and
negotiations)
8. Advanced pricing
mechanisms (such as
bundling, free business
models, and versioning)
2
Price setting and realization
9. Value pricing
10. Competitive pricing
11. Elasticity
12. Price ladders, gaps,
and incentive curves
13. Pricing by country and
currency (macrozones)
14. Pricing by region and
zone (microzones)
15. Dynamic pricing
16. Channel pricing
3
Infrastructure and
running the function
17. Price waterfalls
25. Organizing by function
18. End-customer
discounting
26. Roles and
responsibilities
19. Pricing programs
27. Decision rights by
pricing lever
20. Promotions
21. Rebates
22. Negotiations
(nonstandard
discounting)
23. Channel programs
and trade spending
24. Cost to serve
28. Processes (price
increases, exceptions,
and test-and-learn
approaches)
29. Talent and capabilities
30. Metrics and reporting
31. Tools and technology
32. Incentive alignment
(including incentives for
the sales force)
To achieve results that are sustainable, your people must master the
required pricing skills as they work in the real world. Lectures are
insufficient, so we focus on learning by doing.
Together, we define a set of business objectives. Your team works with
BCG experts to deliver against these objectives. Learning methods range
from formal workshops and online learning to coaching your team, certifying
skills, and building an internal training team.
For further information, please email us at: [email protected]
© The Boston Consulting Group, Inc. 2013. All rights reserved.
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The Pricing Enablement Center
How We Build the Next Level of Pricing Infrastructure
Our pricing-maturity assessment determines how your organization’s
current pricing capability compares with the world’s best-in-class
organizations. We then work with you to design and put in place the
critical infrastructure necessary to move your organization significantly
closer to best-in-class performance.
Four key areas we often address include the following questions:
Organization and Decision Rights
• Where should the pricing organization reside within your company?
• What is the right structure for the pricing group?
• What are the highest-priority pricing decisions and who should be
accountable?
Roles and Responsibilities
• How should pricing activities and roles be distributed across your
organization?
• What is the target profile for pricing-team members?
Processes and Tools
• Which new or refined processes should be added to improve pricing management?
• What tools are needed to help drive processes and pricing decisions?
Metrics and Incentives
• Which metrics are best for offering visibility into pricing performance?
• How should internal incentives be aligned with a pricing strategy?
Specific answers to these questions vary from company to company. Our
proven methodology, which is based on our experience with hundreds of
projects, can help your team build the most effective pricing infrastructure
for your organization.
(continued on reverse)
The Tools and IT Systems You Need
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The Pricing Enablement Center
The plethora of pricing tools and systems can be difficult to understand.
Some companies give up and make key decisions using the most basic of
tools. Others spend millions on systems, but in many cases, they fail to reap
the full range of the benefits.
We help you navigate pricing systems and vendor solutions, including those
focused on business-to-business activities, consumer products and services,
retail customer transactions, and revenue management. We help you choose
the right systems—and get more from the systems you already have in
place.
Furthermore, we work with your people to customize easy-to-use and
effective tools from BCG’s proprietary pricing toolkit. We pass the tools on
to your team during our skill-transfer program.
Finally, we work with your teams, preparing them so that they will have
hands-on experience in using the tools when they grapple with real business
challenges. Learning how to interpret results from these tools is vital to
getting the maximum value from your investment.
For further information, please email us at: [email protected]
© The Boston Consulting Group, Inc. 2013. All rights reserved.
Our Team’s Advantage
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The Pricing Enablement Center
Our Pricing Enablement Center features a committed group of experts and
coaches, each of whom brings years of in-depth, real-life pricing experience
in multiple industries, as well as proven results. All are focused on driving
substantial and lasting impact for you and your organization.
Representative Experts on the Pricing Enablement Team
Richard Hutchinson
• Senior partner and
coleader of the PEC
• More than 15 years of
pricing experience
across multiple
industries, with a focus
on business-toconsumer markets
• Based in Atlanta
Jean-Manuel Izaret
• Partner and coleader
of the PEC
• More than15 years of
pricing experience
across multiple
industries, with a focus
on business-to-business
markets
• Based in San Francisco
Sudipto Banerjee
• Expert principal
• More than 10 years of
pricing experience
across multiple
industries
• Based in Atlanta
Our Pricing Enablement team features broad experience:
• Dozens of partners, principals, and experts worldwide, who, with their significant pricing focus, have delivered breakthrough results for clients in hundreds of pricing engagements
• Deep knowledge of business-to-business and business-to-consumer pricing
• A collaborative working style with the ability to mobilize the organization
• A strategic, holistic perspective
Most of our work is conducted in the field—an approach that we find is,
by far, the most effective. But many of our experts and coaches are based
at our Pricing Enablement Center in Atlanta, Georgia, where we have our
training facilities.
(continued on reverse)
Proven and Lasting Results
nablement
The Pricing Enablement Center
Our Pricing Enablement programs deliver both step-change business
results and the next level of pricing capabilities. Our typical pricing
program provides two to five points of revenue impact to the bottom line.
Enablement programs ensure that these results are sustainable over time.
Full programs almost always provide value greater than ten times the
BCG engagement fee.
We define success in terms of your organization’s ability to sustain and
improve results over time. During the course of the program, we make sure
that we embed new business practices and skills deep into the core of your
organization. For example, we not only help you design a price increase
process, but we also help make sure that your people are able to implement
the process successfully.
We recognize that achieving truly sustainable results requires an ability
to continually optimize business systems and to adapt to the changing
business environment. BCG’s Pricing Enablement Center experts will help
you tackle new issues as they arise—even after the official engagement is
over. Ultimately, we stand by our promise to deliver sustainable results.
For further information, please email us at: [email protected]
© The Boston Consulting Group, Inc. 2013. All rights reserved.
Our Impact
Business-to-Business
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The Pricing Enablement Center
A $2 billion division of a leading industrial-goods manufacturer had been
facing a double-digit decline in sales and a shrinking installed base due to
the economic downturn and intensifying competition.
As part of a multiyear companywide effort, BCG developed new pricing
strategies and helped enable the pricing organization. The division successfully raised prices by more than 4 percent, when no one thought that would
be possible, and enjoyed a dramatic boost in EBIT.
As part of a pricing project to improve the division’s price realization and
ability to execute, we created a pricing model with consistent and adjustable
logic, enforcement of price realization discipline, and an adjustment of the
pricing infrastructure to reduce complexity and lead times.
In parallel, our enablement team did the following:
• Coached executives in a systematic pricing model for the future
• Codeveloped a methodology for pricing guardrails that would ensure price control going forward
• Helped the team ensure that price increases would stick
• Overhauled reporting structures that would assist the company in
analyzing and refining pricing over the long term
(continued on reverse)
Our Impact (continued)
Business-to-Consumer
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The Pricing Enablement Center
A $4.5 billion consumer-goods company was being hit by heavy competition
from private labels and branded competitors in its mass-market,
grocery, and drugstore channels. These challenges had led to significant
price erosion.
As part of a three-year effort, BCG developed new pricing strategies and
helped enable the pricing organization. As a result, the company raised
prices by more than 10 percent across each division, boosting volume and
increasing profits by more than $500 million.
Major elements of the pricing project included streamlining complex pricing
processes, restructuring and aligning sales force incentives, and designing
and implementing an infrastructure blueprint in one business unit before
rolling it out in others. Over the long term, we improved price realization,
built pricing capabilities, and integrated tools to add rigor to the pricing
process.
In tandem with the development of a new pricing strategy, our enablement
team did the following:
•
•
•
•
Conducted training that helped the pricing team make complex
decisions on the basis of market data, using the most up-to-date tools
Rolled out a dashboard of key metrics to improve employee engagement with pricing trends
Implemented a new trade process for identifying opportunities for
improving revenues and effectiveness
Infused pricing into the organization’s overall strategic focus at the
highest levels
For further information, please email us at: [email protected]
© The Boston Consulting Group, Inc. 2013. All rights reserved.