Enhancing pricing and discounting analytics to strengthen margin management for a leading med-tech company.

SITUATION

A leading med-tech company aimed to improve its pricing and discounting analytics capabilities to enhance margin management.

The company struggled with visibility into macro insights, granular price, margin leakage drivers, and managing discounting discipline among sales teams.

The client, operating in North America and Europe, faced significant challenges in effectively managing its pricing and discounting strategies. There was a notable lack of visibility into macro-level insights and an inability to access the granular drivers behind price and margin leakages.

This hindered their efforts to maintain robust margin management discipline.

ACTION

Revology Analytics partnered with the company to implement a six-step engagement process, developing a Margin Analytics platform that included executive dashboards, in-depth analyses, and training modules for sales teams.

The company partnered with Revology Analytics to tackle these challenges due to our expertise in Revenue Growth Management and Advanced Analytics. We implemented a six-step engagement process to develop a comprehensive Margin Analytics solution:

1. Understand Critical Pricing Problems: Identified and defined the core pricing and margin management issues.

2. Split the Problem into Sub-Components: Aligned on the solution concept by breaking the problem into manageable parts.

3. Iterative Alignment Sessions: Conducted regular sessions with executive stakeholders and the core team to ensure alignment.

OBSTACLES

Decision-makers lacked quick access to insights for fixing price and margin leakages.

Sales teams needed help understanding the top customer and product-level opportunities, leading to inconsistent discounting practices.

The company faced several obstacles that impeded its ability to manage margins effectively. Decision-makers struggled to access timely insights to identify and address price and margin leakages.

This delay in obtaining critical information often resulted in missed opportunities to optimize pricing strategies.

RESULTS

Implemented in under 90 days, the Margin Analytics solution improved Net Price realization and enhanced discounting behavior and price realization, laying the groundwork for a value-based pricing journey.

The Margin Analytics solution was successfully implemented in less than 90 days, leveraging the client’s existing technology stack, including Tableau. The rapid deployment allowed the company to address its pricing and margin management challenges quickly.

As a result, the company improved its Net Price realization within the first year by identifying and addressing previously unnoticed price leakage and margin erosion drivers. The platform enabled the organization to understand better various factors impacting its gross profits, leading to more effective discounting behavior and enhanced price realization.