Value-based pricing
Background
A small risk capital owned company initiates work to increase profitability. The company is a sub-supplier to a large very cost-focused sector of industry, a manufacturer of patented components. They also manufacture and sell a specialized consumer product.
The strategy is to organize themselves according to the three completely different business. Price and revenue development work is now to be adapted for optimum margins.
Solution
The revenue consultants from Carrus review the company’s business situation with the different business managements in an inspiration workshop. The focus is on customer value and value-based pricing and based on Carrus’s methods and experience of the three business types.
The workshop is partly common for about 20 participants – partly divided up according to the three types of business operations. Carrus’s methods are used to analyse and work with the revenues of their own business operation. At the same time, a common approach and conceptual apparatus is created for the company.
Carrus documents the workshop as a draft action plan.
Result
The differences in methods for optimum pricing for each commercial transaction have become clear.
Participants have found some twenty different customer values that are provided today, which are not priced or communicated to customers.
The potential is identified to increase revenues in the respective businesses.
The client has created a common reference framework for price and revenue work in the company.