Turning Pricing Into a Competitive Advantage
About the Customer
This company offers medical services and devices to customers in almost a thousand stores in more than 15 countries. With more than 20 000 employees and millions of customers, this company has a market capitalization of well over €4 billion.
With the changing market landscape and increasing competition, the company knew that it had to transform its way of conducting business. Pricing had to become an active player in the company’s revenue strategy. However, we were able to identify several issues in the pricing practice:
The client’s pricing manager knew that something had to change. He knew about Pricefx and our capabilities from his previous company, and as a result contacted us.
Pricefx implemented their cloud-based PriceAnalyzer, PriceBuilder, and Integration Manager capabilities.
- All pricing management is now handled in one purpose-built system. With better insights, client’s pricing team can calculate prices much faster, and send them out to stores instantly. Prices are being adjusted with a higher frequency and can reflect the immediate market situation.
- External data in the form of 200k+ competitor price records is imported daily. With one click, the team can see real-time prices for specific products.
- Location-based pricing was set up so that should a competitor open a new store near one of client’s existing store, the company could adjust its pricing accordingly.
- Products are categorized in product families according to several attributes. Prices are then calculated based on these criteria.
- Check and balance mechanisms are in place to avoid pricing errors and manual override is enabled if needed.
- Pricefx integrates with client’s various SAP environments to ensure smooth data export and mapped the Product ID and their internal SAP ID to ensure multiple exports do not occur.
The team noticed many benefits after the transformation:
- Multiple systems have been consolidated into one
- Manual work is reduced to almost zero, eliminating human error
- Faster response to market thanks to instant real-time competitor prices
- Price update can be done in hours instead of weeks
- New pricelists can be set up: within a day, rather than six months
- Reduced ad hoc price discounts to customers in the store
- Margin improvement thanks to pricing transparency
After more than two years using the Pricefx software, the customer engaged in a pricing maturity mapping exercise with Pricefx. The Pricefx Maturity Map helps companies assess their overall level of pricing maturity, identify opportunities for improvement, and create a roadmap to effective pricing (including – but not only – software).
The customer was able to measure the pricing maturity before and after the pricing function came into focus and could see the maturity increase from 1.5 to 3.2 within two years – a sensational achievement!