Collinson Grant

Pricing

What we do

Pricing is a powerful driver of value. For most companies, managing pricing is the most effective means of driving top-line growth and improving bottom-line results. But very few companies actually manage pricing as a discipline. Compared with cost reduction, pricing gets little attention. Typically, although many people get involved with pricing, no one actually owns the process. Pricing decisions, expertise, and information are fragmented across functions, regions, and business units. Because there are rarely appropriate metrics or effective processes in place to monitor pricing opportunities, threats, and performance, managers have to base decisions on incomplete or inaccurate information. As a result, opportunities are squandered, major threats ignored, and relationships with customers neglected. Companies leave themselves vulnerable to rivals.

How we do it

We help managers to focus on four key elements of pricing:

Responsibility... Make a senior manager fully accountable for pricing – and work out an effective way of measuring his or her performance
Process.... Confirm clear polices and procedures for setting and changing prices. Ensure that all involved understand their responsibilities and limits of authority
Incentives... Design incentives to increase profit, not just volumes and gross revenue. Monitor performance and replicate good practice
Measurement... Use software tools – such as Cognos’ Powerplay – to measure price performance and aid decision-making.

Our experience

Helping clients to consider how to improve profitability by adopting more systematic approaches to pricing is an important component of our work. We have developed sophisticated models for businesses marketing in different countries and in different currencies, and challenged the underlying beliefs and prejudices that affect all managers’ decisions on pricing.