Price Increase Execution

Price increases are very effective at boosting top line growth and profitability, however, ill executed price increases can alienate customers and force the business into a reactive and damage control mode resulting in lower realization rates. Knowing how to structure and execute price increases requires a targeted approach with a well planned communication strategy to ensure the highest rates of price realization possible. Did your last price increase actually stick? If yes, great job. If not, it may be time to consider a new approach.

What To Expect
Case Study

Objectives

Outcomes

Improve the execution of price increases
Identify price increase opportunities based on business goals, market environment and customer dynamics in order to minize risk factors
Develop the ability to measure the effectivness of the new process
Develop a repeatable and effective price increase execution process

Execution of price increases to targeted customers
Improved structure and process of executing price increases
Improved reporting measuring the impact of price increases
Higher price increase realization rates due to tighter process and execution capabilties

ROI

Watch Outs

The impact of a well executed price increase can be very significant. We have seen returns on investment ranging from 10x - 20x.
Just as important, the economic benefits of a price increase accrue from year to year.

Some industries are better positioned than others to drive succesful price increases
Gains can be short lived due to changing market conditions
Not all customers will be eligible to a price increase due to a variety of factors so targeting the right customers is key

$2 Billion Logistics Services Provider

Challenge

The company was struggling to implement price increases to customers that would enable them to pass through some of the cost increases they were experiencing in the business
The company wanted to take a more surgical approach to price increase by prioritizing key product lines with smaller or bigger price increases depending on the account strategy for each customer.
They also realize the importance of putting a more robust process in place to anticipate customer push back and be able to respond in a confident manner.

Solution

Measured and demonstrated the negative impact that the inability to pass on price increases is having on the business.
Developed an action plan with each sales rep on how to approach the price increase.
Created a price increase letter along with other communication materials to explain the reasons for the price increase.
Trained the sales team though role play exercises so they could get more comfortable with the process.
Implemented price increase campaign and stuck to our guns. We could not back down now or your customers wouldn't take us seriously.
Measured results to drive greater levels of accountability across the sales team.

Results

$8 million dollars in incremental top line and bottom-line dollars as a result of successful price increase execution
Sales team who is committed to the success of the organization
Metrics and monitoring processes in place to ensure future results