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Improved price mana­gement by reduced price leakages

Tibnor

Description

In a strategic review of their organization, Tibnor identified pricing as a key area. Internal studies had indicated a profit potential of around 1% of sales to be gained by improving price management. A common ERP platform was also expected. Capacent was chosen to audit and provide Tibnor with quick wins, mid term actions and strategic key direction within pricing.

What was done

Capacent conducted a study of Tibnor’s current pricing process on an aggregated as well as on a sales organization specific level. The study revealed large discrepancies between the sales organizations in their ways of working and significant differences in price and discount leakages. Total leakage potential accounted for over 4,5% of analyzed sales volume. The findings were combined with recommended hands-on actions to stop or reduce revenue leakages in pricing and gain quick wins.

Results

16 MEUR in addressable and identifiable price leakages were presented within e.g. freight, general discounting and regional biased discounting per sales organization. The study enabled Tibnor to improve its discount policies and realize the profit potential in their own pace.

“Capacent provided structured leakage analytics of complex data sets, this combined with a solid ERP understanding enabled trust in the findings throughout the project. Clear and practical recommendations delivered!”

 Jonathan Nejman, Head of Market Development, Tibnor