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| Quicklinks to pricing 101: |
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| Quicklinks to getting started: |
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Sucess Stories:
| Company Type: |
Dental Products |
| Problem: |
Commoditization; the product is a better quality product than the competition, yet did not command a premium price. |
| Solution: |
Researched dentists’ value drivers and payment drivers and built a new pricing model based on the value perceptions of the dentists to include a novel way to bundle products and added services. |
| Impact: |
Resulted in 14% increase in sales volume and 8% increase in average unit price. |
| Company Type: |
Agricultural Equipment |
| Problem: |
Commoditization, products sold on price alone
Educated management team for this leading manufacturer of small agricultural products enabling them to differentiate from lower-cost competitors, increase price differential, and sustain and defend price increase against very aggressive competitors. |
| Solution: |
Educated management team for this leading manufacturer of small agricultural products enabling them to differentiate from lower-cost competitors, increase price differential, and sustain and defend price increase against very aggressive competitors. |
| Impact: |
A 12% increase in price realization with no loss in sales volume, turning the company profitable. |
| Company Type: |
Medical Devices |
| Problem: |
The financial situation of this single product company forced it to triple its pricing. A failure to execute the price increases would force the company to shut down. |
| Solution: |
Manage the way the price increase was executed; how it was communicated to the marketplace, trained the sales staff how to defend the price increase and provided ongoing coaching throughout the process. |
| Impact: |
Not a single customer lost. Sales volume unchanged. Company nearly tripled revenues. |
| Company Type: |
High End Audio Equipment |
| Solution: |
Revenues of this once market leading company flat and the company no longer profitable. |
| Solution: |
Researched resellers’ and end-users’ value perceptions. Identified a new market segment willing to pay about 25% more for the product and showed a strategy for how to get it. Additionally, recalibrated management’s reseller strategy, focusing on a few key resellers in each area and thus earning their loyalty and attention. |
| Impact: |
Over the first 12 months, a 56% increase in revenues and more than double the profits. |
| Company Type: |
Specialty Paper |
| Problem: |
The company had a few very profitable customers, supporting the company, but many customers bought at high discounts – some at negative profit margins. |
| Solution: |
Developed and implemented new discounting guidelines and trained the sales force on tactics for defending the value of the products. |
| Impact: |
This enabled the company to stop rampant discounting to successfully raise price realization about 15% while growing sales volume at the same time. |
| Company Type: |
Computer Network Services |
| Problem: |
Launching a new service to optimize computer networks, and thereby inventing a new market vertical, the company did not know if the marketplace would accept this service or what the optimum price strategy would be. |
| Solution: |
Researched market’s willingness to buy and willingness to pay for the new service. Provided price strategy and marketing strategy as basis for very successful launch of service. |
| Impact: |
12 months after its introduction the revenue was at 150% of plan. |
| Company Type: |
Computer Services |
| Problem: |
The optimum pricing strategy for a new product introduction in a new market vertical |
| Solution: |
Researched Small-and-Midsized Business (SMB) marketplace for this vendor of web-based security services. The company primarily had success with Fortune-500 companies and wanted to extend their market to smaller companies. We found they had a mismatch with their resellers that was easily corrected, and we recommended pricing structures and levels that enabled them to substantially pressure their competitors and then to profitably enter this new marketplace. |
| Impact: |
Several options were presented to the company. The company selected the most aggressive price strategy. The pressure this forced on competition enabled the company to acquire one competitor thereby gaining immediate access to a majority share of this market vertical. |
| Company Type: |
Pharmaceutical Chemicals |
| Problem: |
Growth was flat and profitability very low. Company thought their offering met the needs of the entire marketplace. |
| Solution: |
We conducted researched to discover the value perceptions and price drivers for purchasers of pharmaceutical chemicals. Discovered markets the company currently were not serving and showed them the potential these segments offered. It enabled it to quadruple its available market. Additionally Atenga built a more sophisticated pricing model (good-better-best) based on relevant performance metrics, enabling them to profitably serve more-price-conscious customers. |
| Impact: |
With only small changes in its offering, the company was immediately able to add offerings to meet the needs of the underserved segments, leading to a more then 20% increase in revenue within 6 months. |
| Company Type: |
Music Services |
| Problem: |
The company faced severe downward pricing pressure |
| Solution: |
Researched value perception for music discovery service serving radio stations, found that buyers were willing to pay almost double what vendor was charging, orchestrated price increase and in fact added six new clients after the price was raised. |
| Impact: |
Revenues more than doubled over the subsequent 12 months. |
| Company Type: |
Enterprise Software |
| Problem: |
The company was unsure how well this new type of software would be accepted by the marketplace, and where unwilling to devote too much resource into the product launch. |
| Solution: |
Researched market for enterprise-class training software and discovered the market sizing was considerably larger than the company expected when the marketing message was changed to reflect the concerns of executives. Additionally, unique market segmentation was discovered, which enabled client to target and price most receptive and lucrative segments. |
| Impact: |
This data gave the company confidence in its product, more resources were devoted to the product launch and it drove first-year revenue 180% of plan. |
| Company Type: |
Stem Cells |
| Problem: |
Company where unable to defend its better product against more powerful competitors and sold on price alone, rendering the company unprofitable. |
| Solution: |
Researched market for stem cells, isolated factors that drove willingness to buy, attributes that drove willingness to pay, showed client how to raise prices to profitable levels, and isolated an ancillary market for proprietary growth that could dwarf the business of selling stem cells. |
| Impact: |
In 6 months added 37% EBITA making the company profitable |
| Company Type: |
Irrigation Systems |
| Problem: |
Did not know if customers where willing to pay extra now for product that can be upgraded in the future, and did not know if should launch this product line before the upgrades would be available. |
| Solution: |
Researched market for irrigation systems, as client was planning rollout of revolutionary new features, e.g. higher levels of control, savings of water, lower costs of operation. Found surprising willingness to pay now for the capability of adding the features in the future, enabling client to begin earning return on investment a full two years prior to releasing the new features. |
| Impact: |
Launched new upgradeable product line, added approximately 23% revenue in the first 12 months. |
| Company Type: |
Email Marketing Vendor |
| Solution: |
Client did not know how to prioritize growth opportunities. |
| Solution: |
Client was considering several new product areas. We researched the marketplace and found the clear winner in the group and showed how client could become market leader in this emerging technology area. We also showed how its current bundling plans were counter-productive and in fact reduced growth, sales and profits. We recommended alternatives more in line with buyer preferences. |
| Impact: |
14% growth in the subsequent 9 months. |
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