Background
Our client is a North American-based manufacturer with annual revenue exceeding $100MM. Their expertise lies in crafting cooling solutions tailored for a wide range of vehicles, extending from trucks of all sizes and motor coaches to buses, alongside equipment used in construction, agriculture, and mining. Additionally, they provide cooling solutions designed for generators and industrial compressors.
The Challenge
Our client presented different pricing strategies to various types of suppliers. However, having more than 100 price lists created confusion, inconsistency, and missed revenue growth opportunities.
Our client is currently serving diverse markets with a cost-based approach. They contacted Iris Pricing Solutions to move from a cost-based to a value-based pricing strategy.
The Approach
The Iris Pricing Solutions team developed a strategy to transition efficiently from a cost-based to a value-based pricing strategy. They adopted various tools and created micro-segmentation frameworks to better serve each customer segment. The team also addressed inflation to identify immediate pricing opportunities that would benefit the company in the short term through an Analytical Deep Dive.
This project was divided into three phases. The first phase aimed to understand the current scenario, identify opportunities and company strengths, uncover short-term revenue increase opportunities (Quick Wins), and classify our client according to the five levels of World Class Pricing. The second phase involved developing a micro-segmentation framework, creating a pricing strategy and target price approach, and developing pricing recommendations for each customer and product. The third phase was the value-selling training.
