case studies
Pricing Case Studies
Our research showed that 80% of the accounts were not meeting their revenue commitment, and out of those 80%, more than 65% did not meet commitment by a margin of 75% or more. To address this problem, we created a dynamic discounting program (VIP). This loyalty program is expected to generate over $65MM annually when all small/medium sized accounts are migrated into the program.
We reviewed a major carrier's travel agency commission practices in Asia and found that all of the agencies were given back-end incentives (rebates) based on the revenue they generated for the airline, regardless of whether they sold high- or low-yielding products. This presented a significant risk for the carrier. To address this problem, we developed a volume incentive plan that awarded different percentages based on the products sold. This program encouraged agencies to sell higher yielding products and generated a 10% increase in revenues.
The published rates of an express shipping company were significantly out of line with their competitors, in some cases by 20% to 40%. After completing some market research, we recommended rate adjustments and zone reconfiguration, supported by a price elasticity study. By studying customer purchasing behaviors, we were able to reverse erosion across 43 global markets, improve sales closure rates by 25% and grow new customer acquisitions by 10%.
Our margin analysis indicated that a majority of shipper's accounts were not profitable. We developed a Strategic Repair Program to address the issue. Once implemented, we were able to strategically target specific products, zones, countries and weight bands to correct a flawed pricing structure. Additionally, we were able to recommend various cost-saving ideas. This program has generated annual revenue increases of more than $55MM.
Our research demonstrated that a major carrier was targeting very minimal segments in the Asian market. To address the problem, we implemented a Fare Categorization project, the goal of which was to develop superior market segmentation. This program expanded market segments from 5 to 21, and improved revenue by 15%.
The importance of building a winning pricing team cannot be understated. It's a challenging process, but making the effort can result in significant revenue contributions. We know how to identify talent, focus employees in the right direction, and encourage them to achieve their maximum potential. And we know that a critical component of successful team-building is showing employees a clear vision for the future and a specific strategy for getting there.
Costing Case Studies
Our costing and process analysis indicated a need for the rationalization and streamlining of back office processes. We applied Business Process Re-engineering and Activity Based Management techniques to convert the existing cost allocation system to an activity based approach to support decision-making. The end result of our analysis and recommendations was a $25m annualized savings to the company. We also produced guidelines, procedures and training modules to facilitate process improvement on an ongoing basis.
Our process and costing analysis revealed significant expenditure and exposure within the Trading Operations department of a major global investment bank. One of our initiatives was to create a paperless work environment using a Document Image Processing (DIP) system. The $1m roll-out was implemented on time and within budget and was predicted to result in $10m in annualized savings.
Our team examined the marketing, pricing and costing of new products to find opportunities for profit improvement. Part of our deliverables included assessing the process for stock inventory controls and the efficient distribution of products throughout the country. We successfully instituted a plan to move to a ‘Just in Time’ stock control system, reducing warehousing costs by 15% in six months.
Our focus was to initiate and implement a complete revision of the Group’s Product and Customer Profitability Program, including global implementation and training of the underlying methodology, using best practice activity based management tools and techniques. Implementation spanned 50 countries in 5 continents. Benefits to the company included a deeper understanding of profitability by customer grouping and product, thereby facilitating sales, marketing and financial investment decision-making.
Our team implemented a cost management system allocating cost drivers at a customer and product level allowing the company’s first ever view of profitability at atomic level detail. This engagement resulted in unit shipment cost savings of 10% in the first year of implementation.