Tailored Pricing Tool Facilitates Consistent and Accurate Quoting Practices

Situation
Price quotes at an industrial manufacturer were handled by many different individuals. Depending on the project scope, quotes were created by sales, engineering, or a combination of both. Because no formal quoting process or system existed, everyone was using different methods and different reference prices to come up with a quoted price. This lack of coordinated approach to quoting resulted in pricing methodology inconsistencies and price leakages.

Approach
Along with the pricing tool, Price for Profit helped the client deploy its strategic movement from a cost-plus model to a market-pricing model. After conducting interviews and defining the quoting process, Price for Profit assembled a cross-functional team comprised of key stakeholders. Leading the team, Price for Profit developed a pricing tool that incorporated the new market-pricing strategy, optimized prices and set guidance for sales and engineers on how to best price individual customers. Highlights of the pricing tool include:

• Customized to meet client’s pricing dimensions and strategy
• Real-time guidance with target and floor prices
• Controls and approvals
• Visibility to margin contribution
• Trend reports including quote-to-order hit rate

Results
By using the tool, sales and engineers used a consistent approach to quoting, which improved overall pricing, reduced price leakages, and allowed better pricing communication with customers. Thanks to its web-based platform, the new tool also enabled remote access for both sales and customers. Additionally, the tool gave business decision-makers real-time visibility into pricing, enabling them to make better pricing decisions on a day-to-day basis.