MarginMax Case Studies
PricePoint Partners has helped companies from a variety of industries improve their pricing strategies and boost profit margins. Whether you are looking to price new products, improve current pricing levels, develop a competitive pricing strategy or improve your pricing practices, PricePoint Partners has the experience to lead your company through the most challenging pricing issues.
These case studies feature a selection of real-world assignments. Each and every PricePoint Partners project results in solid financial results. See how we can help you.
Medical Device Manufacturer Improves EBIT by $1.5 Million
The Problem:
A leading NYSE-listed medical device manufacturer with a strong competitive position was unable to improve prices over a 7-year period. Complicating matters, the company had locked into a long-term price freeze agreement.
The Solution:
Using the MarginMax Process, our pricing experts measured customers perceived value of the company’s products and services to determine that 82% of the company’s non-contract business could support a price increase. The process also identified specific accounts that could not support an increase, implemented a market communications program, and trained and coached sales representatives. A pilot program was initiated to test the new price levels through a small group of thought-leading sales representatives. The team was instantly successful and the remaining sales team members responded with confidence.
The Results:
A price increase exceeding 6.5% that yielded 1.5 million in incremental income.
Industrial Adhesives Manufacturer Simplifies Discount Schedules to Improve Margins By 5.14%
The Problem:
A leading industrial adhesives manufacturer had an established discounting program that had evolved over several years and a number of product lines. Legacy pricing for older products, combined with the introduction of newer products contributed to a confusing pricing structure that was also difficult to manage. Additionally, customers were confused over the rationale to qualify for various discount levels, making an often uncomfortable situation for the sales team.
The Solution:
PricePoint Partners conducted and in-depth statistical analysis to create a new pricing grid that greatly improved through new pricing tiers, more consistent price basis amounts, and a more logical discount structure.
The Results:
By creating a new non-linear pricing grid, the company was able to simplify pricing structures while improving profitability. Sales generated using the new pricing structure resulted in a 5.14% improvement in margin, despite the fact that some prices were lowered.
Pricing strategies help Midwest-based rubber company boost net income 21% this year.
The Problem:
A leading Ohio-based rubber company found itself in a precarious position when sales volume was steadily climbing and fixed costs were largely under control, yet the company failed to realize profits goals due to rising material costs.
The Solution:
The only real option to resolve the situation was to consider increasing prices to regain the margins the company deserved. The firm hired PricePoint Partners to assess the situation. Using the MarginMax Process, our pricing experts measured customers’ perceived value of the company’s products to discover that perceived value was higher than actual price. PricePoint Partners developed a strategy to improve price levels in a number of markets, including automotive and heavy truck. Our pricing experts set price targets and worked with the sales and marketing team to communicate new pricing.
The Results:
The company achieved record profits -- 21% improvement in income on an average price increase of 2.5% with no loss in unit sales volume.
Industrial Tape Manufacturer Improves Price Revenue by 5.06% Within Year
The Problem:
A world leader in specialty tapes for automotive, packaging and industrial assembly was focused on developing new products and building marketshare. While the firm’s revenues grew impressively, margin improvement opportunities through price optimization went unrealized. At the same time, the industry was nearing capacity and competitors began pushing prices upward. The company knew that the time was right to optimize prices, but did not know where improvement could be realized, or in what amount.
The Solution:
PricePoint Partners was retained to provide the tools, analysis and processes to identify “how” and “where” to improve price levels. By measuring customer value perceptions, providing sound analytical tools and providing tactical assistance including sales coaching, the client realized a record margin imparovement.
The Results:
Within one year, the company realized a pricing improvement of 5.06% for goods sold to customers who were not under pricing agreements. Long term, the client was able to adopt new strategies and procedures to maintain a pricing discipline that provides regular pricing “maintenance” to assure profitability.
Medical Software Company Averts New Product Disaster
The Problem:
A leading medical software company developed a new product that tracked donated blood from donor to hospital. Scheduled for release in a few months, the company needed to identify an appropriate price.
The Solution:
PricePoint Partners developed a plan centered on a value equivalency model that identified perceived price versus perceived benefits. Using market research techniques, our pricing experts identified key buying factors and competitive value offerings in order to help price-position the new product. The research included a detailed ranking of product features versus specific user needs and compared them to competitive offerings. The results were surprising.
The Results:
The new product filed to meet some basic performance features required to successfully compete in the market. Pricing the new product in its configuration became irrelevant and re-design became the critical success factor. In the end, a potentially disastrous product introduction was averted. The client was able to later enhance the product performance and positioned it well to compete in the market.
Manufacturer of Test Equipment Discovers $1.5 Million in Price Improvement Across 3 Market Segments.
The Problem:
Management believed they were leaving money on the table and that there was an opportunity to improve pricing levels either across the board, or surgically within marketing segments and specific customer groups.
The Solution:
PricePoint Partners was hired to diagnose pricing practices, compare to industry best practices and identify pockets of opportunity to improve pricing levels. Working hands-on with the company’s marketing, IT and finance groups, PricePoint Partners was able to gather and analyze transactional pricing data, develop a pricing band analysis and identified wide-ranging inconsistencies in pricing within specific marketing segments – indicating a lack of pricing discipline.
The Results:
Analysis pinpointed opportunity for margin lift. The company was able to capture $1.5 million in price improvement across three market segments.
