How One Major Consumer Packaging Producer Reaped the Rewards of Powerful Pricing Segmentation
With a history spanning more than one hundred years, our customer, based in the US, is a major global player in the production of consumer packaging.
Employing nearly 20,000 people in over 30 countries, the company runs sustainability initiatives that recycle 3 million tons of paper, metals, old corrugated containers and plastics each year.
Custom Orders Create Complexity
The company serves a large and assorted customer base in the consumer package goods industry. While this diversity has been an asset to them over the years, it comes with its fair share of pricing challenges. Each customer has their own unique wants and needs, meaning that all orders the company receives are custom in nature.
To make things more difficult, sales staff were burdened with an overly-complex system and tools that were not up to the job. Prices had to be calculated manually, creating a large amount of work and the potential for human error. There was no standard price for sales reps to reference when preparing quotes, their dated Excel spreadsheets offered no price guidance, and opportunities for margin uplift were being missed.
It was time to bring in Pricefx.
Segmentation Is the Solution
Pricefx quickly identified customer segmentation as key to the company’s pricing success, and set to work on one of the company’s largest business units.
They first implemented their PriceAnalyzer tool, which rapidly and effectively segmented the company’s total addressable market based on a unique set of strategy-specific parameters, while simultaneously identifying price increase opportunities and detecting margin leakage.
Pricefx also implemented PriceBuilder and QuoteConfigurator, the former creating clear and impactful price policy definitions and guidelines, and the latter supporting sales and back-office teams in creating quick and error-free quotes in response to price inquiries.
By segmenting customers into groups based on attributes (like company size, order history and future sales potential), the company was able to standardize and simplify their pricing process and provide segment-based pricing guidance to sales reps.
Having witnessed immediate traction at this first unit, the company rolled out its transformation to the next. As each business unit is unique, so too was Pricefx’s approach. PriceAnalyzer and PriceBuilder were the key tools leveraged at the second unit.
And the Results Speak for Themselves
Streamlined – that’s the best way to describe the company’s new pricing process. Excel has been consigned to history in favor of the new cloud-based solution that keeps sales reps and managers in the loop and on the same page.
While making price adjustments used to mean managers passing changes on to sales reps (making room for error and missed opportunities), today, all price changes and approvals are stored in one place, and visual workflows create a clear pricing picture for all employees.
The segmentation that Pricefx’s tools have enabled is generating immediate reward in terms of improved pricing accuracy and increased margins, and sales reps have renewed confidence in the prices they’re quoting.
Furthermore, with standardized pricing software across the organization, employees who switch from one division to another can be rapidly onboarded with minimal training required.