Industry

Logistics & Distribution

Company Profile

  • €10bn annual revenue
  • Leading company in global air and sea freight forwarding

Situation and Objectives

  • Price levels constantly under pressure
  • Unsystematic pricing approach
  • Determine systematic but pragmatic approach to derive prices/mark-ups
  • Identify the key factors driving willingness to pay
  • Let these factors determine the price level

Approach

  • Based on customer survey, data analysis and profound industry experience, we determined a structured yet simple and pragmatic approach for price setting.
  • Using only four easy to identify criteria (current revenue, weight of freight, density fit, special requirements) we developed a system how to calculate the price.
  • As the pricing rules were so easy to follow and fit on one page, we printed them on the sales team's mousepads. Thus they could give the correct quote to their customers immediately while talking to them on the phone.

Pricing Rules on a Mousepad

Results

  • Price decision based on four key factors
  • Easy to use and implement, with no additional tool usage required
  • Significant improvement of price setting behavior (more in line with willingness to pay, higher profits, and hit rates maintained)

Impact

  • 2.4% points profit increase

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