It might be a buzzword, but it is more suitable than ever before – living and doing business in a VUCA world. VUCA stands for volatility, uncertainty, complexity, and ambiguity. In pricing and revenue management, inflationary and highly volatile markets, a constantly changing competitor landscape as well as big data and artificial intelligence are just a selection of challenges resulting from the VUCA world. To tackle these and other challenges, companies show a strong increase in demand for highly professional price management. The typical range goes from pricing strategy and pricing analytics over fast pricing execution until strategic revenue management. Our experts are eager to support you and your company to get your pricing into shape and manage your business successfully.
Pricing & Profitability – the time is now
Pricing is the top profit lever, and still remains underdeveloped in most companies
It is no secret that many companies, even today, calculate their prices based on simple cost calculations. While they might generate minimum margins, most of the times there is only a weak connection towards the overall market strategy of the company, and they do not exploit product or customer value. Having that in mind, the potential in price management and revenue management is immense.
Next to conceptual improvements, data and tool-based advancements related to artificial intelligence are also driver for profitability. Based on our experience, profits can usually be increased between two and five percentage points in average. To visualize the dependencies of profitability and maturity level of price management within a company we define five development stages:
Horváth pricing excellence framework
Successfully refining price and margin management
Our pricing excellence framework is an integrated approach that analyzes and further develops your pricing with focus on:
- Price strategy: What decisions have been made regarding price level, price structure, price dynamics, and price communication for a product or service offering? How was the market segmented? What is the price acceptance of the individual customer segments? Where is pricing management located within the organization?
- Price setting: What are basic pricing guidelines and logic? How is the customer’s decision architecture and price acceptance actively designed?
- Price realization: How to best enforce our prices and achieve our goals by discounts and bonus policies? What does pricing governance look like? How is the sales team incentivized?
- Price controlling: What are adequate KPIs for sustainable reporting? How does the organization monitor feedback on the pricing strategy?
To implement these concepts, our experts support you with behavioral pricing and selling as well as AI-powered methods or by setting up state-of-the-art reporting tools.
Pricing & Profitability by Horváth
Pricing & Profitability by Horváth aims to improve top-line growth and bottom-line performance. Our pricing solutions combined with our outstanding Horváth consulting culture sets us apart in the market. Moreover, the deep roots of Horváth in performance management, controlling & finance drives our analytical and customer centric perspective on pricing excellence. Our solutions actively contribute to your company’s success, as independent advisor Horváth has in-depth knowledge of pricing software & their suitability for your individual needs. The End-to-End philosophy is at the core of our service to companion you as a client from first analysis to concept until implementation to ensure your sustainable success.
Learn more about our solutions and assess your pricing maturity level.
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Nikolas Spatz