Eliminating Price Leaks and Delivering Accelerated Results

Situation
After being introduced to price leak management concepts and identifying several specific leaks, a global consumer products manufacturer launched a handful of internally-driven initiatives to eliminate the identified price leaks. Over the next 18 months, the client realized savings on several key initiatives; but was unable to establish full controls and institute a culture of continually looking for pricing opportunities. Soon the client recognized the intended results were not fully realized nor sustained and decided to engage the support of Price for Profit.

Approach
Price for Profit was engaged for a multi-phased initiative to assist with price leak management and help build the foundation for a continuous pricing management mindset. Price for Profit’s approach involved broad interaction within the client’s organization; along with analysis and correlation with relevant data utilizing Price for Profit’s proven tools & techniques. The assessment of the previous internal projects revealed that of the price leaks initially identified, less than 50% of these savings were continuing to be realized. Through additional interviews and analysis, Price for Profit identified over $3 Million of new Price Leaks within two months. These price leaks spread across a variety of key business activities including Price Selection, Freight, Payment Terms, Returns Process and Rebate Programs.

Results
In addition to surfacing and prioritizing the savings opportunities, Price for Profit developed a short, medium, and long term approach to improving price management, with detailed actionable solutions. This roadmap helped the client keep the momentum going, realizing quick wins by immediately plugging some price leaks while setting the stage for better ongoing price management.