Customer case: New pricing strategy and sale packages improves media company’s sales and profitability

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Customer case: New pricing strategy and sale packages improves media company’s sales and profitability

PriceGain helps media company develop and implement a new global pricing strategy in order to simplify sales and increase profits.

Service companies that compete based on technology are constantly in a bind. They must continually fight for market share using their existing infrastructure when new competitors come into their space with the latest tools.

Situation:  New competitors utilizing new lower cost technologies were hurting sales and margins.

New technologies that allowed competitors to offer fixed prices were taking business away from our client, who offered a variable-cost service. The clients offering was complex and it was difficult for users to predict the price for our clients services on a month-by-month basis. The clients business model was also complicated by different service offerings and prices in different countries. They did not have a global price strategy in a transparent marketplace and their services were not clearly defined across all markets. Could PriceGain help the client develop a comprehensive, global pricing strategy that would increase revenue, simplify the offer and help it compete more effectively?

Solution: Market research combined with analysis of historical sales data helped PriceGain identify key leverage points for change.

We conducted a survey of customer buying practices and analyzed the result. We found that customers showed a preference for fixed, predictable pricing in most market segments. The research also revealed that there was substantial confusion regarding the clients complicated rate structure. The results helped us understand the specific things that needed to change in order to make the clients offer more attractive.

Our analysis also indicated that our client could substantially improve profits in some regional markets by plugging income leaks. We helped the client develop a new global prepaid offer along with a series of simple service bundles that users can customize with various options. We also helped our client organize pricing decisions at the group level in order to coordinate future pricing changes.

Results:  A new global offer was introduced to simplify sales, increase profits and improve cash flow.

The client implemented a new set of offers that included fixed prices and prepayment options in all markets worldwide. The client also plugged the income leaks we identified in order to improve profits in a number of markets.

Reaching internal consensus on offers and prices had historically been challenging. Top managements support for the new global strategy helped the business units collaborate much more effectively and to efficiently leverage the firms global competencies.

14-05-22|