Presentatie Sales & Marketing Achieving Pricing Excellence | 4 februari 2016 | Simon-Kucher &...

www.simon-kucher.com

How to smartly increase profits?

Achieving Pricing Excellence

Amsterdam, February 4, 2016

Onno OldemanJuriaan Deumer

Amsterdam office

Barbara Strozzilaan 380

1083 HN Amsterdam

The Netherlands

Tel. +31 20 75312 53

[email protected]

Presentation summary

Source: Simon-Kucher & Partners

Simon-Kucher & Partners:Worldwide marketing, pricing and sales experts

Strategy> 400

Sales> 500

Marketing> 500

Pricing> 1,000

� Growth and competitive

strategies

� Product portfolio

(re-)design

� Pricing excellence

� Customer value management

� Sales channel and sales force

optimization

Global presence

Best consultancy in marketing and sales

>1,000 projects in the last 3 years

AmsterdamBarcelona

BonnBrusselsCologne

CopenhagenFrankfurtIstanbulLondon

Luxembourg

Madrid MilanMunichParisWarsawViennaZurich

TorontoBoston

New YorkSan Francisco

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Santiago

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Tokyo

Singapore

Sydney

29 offices worldwide, 800 employees

Atlanta

World leader in giving

advice to companies on how

to price their products

The pricing strategy

specialists

The world’s leading

pricing consultancy

The influence of

Simon-Kucher on the

prices we pay for just about

everything is staggering

BusinessWeek The Economist

William PoundstoneThe Wall Street Journal

World leader in pricing

1 Simon-Kucher & Partners

2 Boston Consulting Group

3 McKinsey & Company

manager magazine

TopLinePower®

14NL4005_Flevum_Achieving Pricing Excellence_Summary 2


We serve renowned market leaders…and hidden champions

Consumer & RetailAutomotive

Audi

Continental

Daimler

Maserati

Mercedes-

Benz

Porsche

Renault

Toyota

Volvo

VW

Würth

Beiersdorf

Coca-Cola

Danone

Ferrero

Henkel

Nestlé

Nikon

Nutricia

Swarovski

Ph

oto

s:

ww

w.c

olo

urb

ox.d

e

Media & EntertainmentTransport, Logistics & Travel

AirFranceKLM

DB Schenker

DHL

EuroDisney

Germanwings

Lufthansa

Thomas Cook

TNT

TUI

Bertelsmann

Eur. Directories

Harcourt

Scholastic

The Economist Gr.

WMG

Pearson

Persgroep

Reed Elsevier

TelecommunicationIndustrial Goods & Services

Aalberts Ind.

Bosch

Caterpillar

CRH

Geberit

Schaeffler

Siemens

SPG

Thyssen Krupp

1&1

DTAG

KPN

Orange

Ooredoo

Skype

Swisscom

Telefónica

Vodafone

Software & TechnologyFinancial Services

Citrix

Google

Intel

Microsoft

Novell

Panasonic

SAP

Semikron

SunGard

ABNAMRO

Allianz

Am -Express

DB

Generali

Western Union

AXA

Barclays

BNP Paribas

Pharma & Life SciencesChemicals & Ingredients

AkzoNobel

BASF

Bayer

CSM

Danisco

DSM

FrieslandCampina

Merck

Cabot

GSK

HRA Pharma

Novartis

Nutricia

Sandoz

Solvay

PGT Healthcare

Johnson&Johnson

Dr. W. Schwabe



Pricing for profit: The formula is simple

Profit

Often not yet optimized

Price

Limited possibilities

Volume

Largely exhausted

Cost

-x=


1) Global Pricing Study; 1,615 companies across the world; 39% C-level executivesSource: Simon-Kucher & Partners

Insights from our Global Pricing Survey

report increasing price pressure83%

are in price war59%

price implementation rate –lowest number ever measured37%



What often lacks is pricing power

Pricing power is the ability

of a company to get the

price it deserves for the

value it delivers.


Source: Simon-Kucher

Fact: Pricing is complex to manage

Pricing complexity is a fact of life, because in most cases it involves:

…too many people

…too many opinions

…too many interactions

…too much data

…too little time

"I know what our

competitors

charge"

Sales

Low prices

"I know how great

our product really

is"

Product

Brand premium

"I know what our

customers say"

Value pricing

Marketing

"I know what our

costs are"

Finance

Target margins


Result: Margin leakages due to lack of pricing power

- "Our pricing is cost-plus and historically grown"

- “Are we asking the right premium for our products and services?”

- "We sell too much on price, rather than on value"

- “We lack capabilities to sell our new solutions and services"

- “Our products are too commoditized"

- “We lack differentiation in our segments"

What the customer is willing to pay…

…and what we actually get

Valuestrategy

Value

pricingValue

selling

Prices which are either too high, or too low

Value not defended, discounts on gut-feel

Product offerings do not fit customer needs

Typical deficiencies and leakages



1) NPD = New Product DevelopmentSource: Simon-Kucher Global Pricing Study 2014

Four key success factors separate the "Best" from the "Rest"

Leadership & strategy:

Clear directions, guidelines and owner-

ship from C-level executives in pricing

Organization:

Clear pricing roles/responsibilities

and dedicated pricing organization

Innovation process:

Early and permanent integration of

pricing/marketing in the NPD1) process

Technology/Know-how

Usage of tools, software solutions and

methods

68%

34%

42%

34%

39%

26%

33%

24%

Share of respondents

Best

Rest

1

2

3

4

+74%

+31%

+27%

+40%


Achieving TopLine Power calls for action on three core disciplines


Value strategy

Value pricing

Value selling

Pro-active sales approach & account management

Increased cross-, up- and deep-selling

Optimized value selling guidelines, tools & skills

Improved KPIs, incentive system & monitoring

Value based list price setting

Optimized conditional discount structure

Systematic project pricing

Monetization of surcharges & services

Clear strategic goals & positioning

Targeted customer & product segmentation

Effective go-to market &channel strategy

Portfolio & price model optimization

9

4

5

106

117

8 12

3

1

2



Value strategy: Know the value

Take-aways

� Clear leadership directions:

Ensure ownership from C-

level executives

� Create insight in value

drivers per customer

segment

� Develop clear strategic

goals and a differentiated

commercial approach per

segment



Value pricing: Price the value

Take-aways

� Use different pricing

methods in combination

� Choose from different

methods to identify

willingness-to-pay and

establish optimal list prices

� Example: Use PriceMaps to

uncover value in your

portfolio and define value-

based list prices

� Monetize your services by

having a clear service menu

and charging for services

delivered



Value selling: Sell the value

Take-aways

� Bundling offers clear

advantages for suppliers

and for customers

� Smartly bundle your

offering to maximize

willingness-to-pay

� Use bundling to assess

willingness-to-pay and to

communicate value

� Equip your salesforce:

Develop a value selling

sales playbook to provide

structure and guidance to

the sales force



Where to start? – It depends on a company’s maturity

B2B client example



Typical project approach

Phase IIIPrepare

implementation

Phase IIDevelop solutions

Phase IStatus quo

analysis

Value pricing awareness and capability development

Handover of sales & pricing methods, processes and tools

3-6 weeks TBD1-3 months

Prioritized & quantified

improvement

opportunities and

solution directions

Roadmap for solution

development and

implementation

Development of implementation-

ready solution measures, incl.

quick wins

Optimization of sales & pricing

strategy, processes and

organization

Redirection of commercial

organization, support market

launch and IT alignment

Business case and

implementation roadmap


Presentatie Sales & Marketing Achieving Pricing Excellence | 4 februari 2016 | Simon-Kucher &...

Economy & Finance

Transcript of Presentatie Sales & Marketing Achieving Pricing Excellence | 4 februari 2016 | Simon-Kucher &...