How to build a robust and effective capability to design, set and monitor pricing, commercial policies and trade spend in a way that is aligned to increasingly fluid channels, competition and consumer journeys?

As channels become more fluid and markets more competitive, guaranteeing the correct price positioning and commercial policy is essential in realizing an organization’s commercial and marketing strategies.

It is common in this new reality to find companies facing a negative price spiral, consciously or unconsciously, due to a variety of challenges:

• Setting the right price: Deploying a price-to-consumer strategy based on competitors’ positioning, consumer willingness to pay, real price to consumer and channel knowledge is a challenge both in terms of information, tools and also internal alignment. Protecting margins across channels while remaining competitive requires dynamism and may change from region to region.
• Connecting revenue management to strategy: Designing Commercial and Trade policies which enable the organization’s strategy and goals regarding brand positioning, market share and profitability, within their current context is also difficult. It requires deep knowledge of company product positioning and client base.
• Aligning commercial policy with sales objectives: Protecting the sales goals and avoiding disruptive price conflicts between clients requires a harmony between commercial conditions and sales targets / incentives which is hard to achieve.
• Optimizing trade spend: Allocating trade spend based on customer needs and resource optimization, rather than “gut feeling” truly engages a company in thinking sell through rather than sell to its clients
• Monitoring revenue management processes through a clear governance: Implementing and sticking to a documented governance to limit “out of policy” approvals which disrupt positioning or profitability is easier said than done. A company must evolve its revenue management process structure over years. Biting off more than one can chew is a common mistake and can jeopardize the whole concept of Revenue Management
• Reaching a shared understanding between stakeholders: Considering how Revenue Management policies can be built to meet different (and sometimes conflicting) stakeholder needs and setting expectations on the true potential and limit of Revenue Management as a lever is a challenge in itself.

We can support you in translating the product strategy of your organization to the price-to-consumer; from setting fair margins between channels, through to defining the best implementation strategy.

We support both products and services companies in:

• Price-to-consumer strategy redesign: How to position your products or services from a consumer-centric perspective and to capture opportunities considering your marketing and commercial strategies and the market’s reality;
• Commercial policy redesign: How to structure your organization’s Commercial Policy based on your Go-to-Market strategy, to balance price architecture between channels and regions to ensure that the commercial team is equipped with simple and effective price levers;
• Trade spend optimization: How to define your optimal level of investment and measure return, to provide direction on future trade spend allocations;
• Governance and processes redesign: Design the governance and processes related to Revenue Management to monitor the outcomes of the defined pricing, commercial policy and trade spend strategies, and react to make adjustments;
• Deployment strategy: Evaluate the best implementation strategy, defining how to phase price changes, when to pilot, and how to “sell” the renewed offering, considering the risks, the impacts (in clients and consumers) and the complexities of each change. This may involve us assisting you in executing pilots and waves of implementation.
• Enabling tools: We are not software or research sellers, we understand the company needs, evaluate tools in the market and recommend what we find to be the best investment for the company moment and need.

• Re-create revenue management as a strategic enabler: Set product positioning, price-to-consumer and commercial policy as direct activations of Marketing and GTM strategies, ensuring coherence across the organization
• Improve top line results: Drive volume through clear positioning, brand recognition and right price-to-customer for the company portfolio
• Improve bottom line results: Protect margin through effective capture of opportunities along the value chain, and optimized resource allocation in promotions and discounts based on ROI
• Increase monitoring capability: Bring visibility over market prices, competitor behavior, and opportunities along the value chain, defining the best way to capture and analyze information

Revenue Management must start with an understanding from the consumer perspective and market reality. It is then possible to translate this perspective ‘outside-in’ into your objectives along the whole value, defining the price-to-consumer, sell-in prices, trade levers and margins to be targeted in each channel.

Our approach to Revenue Management considers not only our experience from applying our methodology in organizations from different sectors, but also an organization’s team’s knowledge about its market reality. We go beyond data analysis to make sure we understand the company strategies and ability to implement our recommendation, making every project unique. Working side-by-side with teams across the organization, our approach is divided into seven steps:

We can be as hands-on as needed throughout the project – training your sales team, producing negotiation materials, and/or managing the implementation of new systems and tools – to make sure the transition is as smooth as possible.