Pricing Excellence
Pricing Maturity Assesment Tool
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1: PRICE STRATEGY
How would you rate your organizational pricing maturity ?
Current organizational pricing maturity
(Required)
LEVEL 1 : List prices are set by product or category management, but market pricing is mainly owned by sales. Price setting is cost plus/market based. We are very volume driven.
LEVEL 2 : Pricing is very much seen as a margin optimisation project driven by the finance department. Price setting remains mainly cost plus and the pricing team works very often in a silo.
LEVEL 3: Pricing is embedded in the commercial processes, reporting to the commercial department. Value based pricing is done were possible. Pricing is aligned with marketing, finance and sales for optimal value pricing, value communication and value
LEVEL 4 : Pricing plays a key role in developing new revenue and business models and is seen a major shareholders’ value driver. A VP Pricing is reporting directly to the CEO.
Target organizational pricing maturity
(Required)
LEVEL 1 : List prices are set by product or category management, but market pricing is mainly owned by sales. Price setting is cost plus/market based. We are very volume driven.
LEVEL 2 : Pricing is very much seen as a margin optimisation project driven by the finance department. Price setting remains mainly cost plus and the pricing team works very often in a silo.
LEVEL 3: Pricing is embedded in the commercial processes, reporting to the commercial department. Value based pricing is done were possible. Pricing is aligned with marketing, finance and sales for optimal value pricing, value communication and value
LEVEL 4 : Pricing plays a key role in developing new revenue and business models and is seen a major shareholders’ value driver. A VP Pricing is reporting directly to the CEO.
Does your company have specific pricing goals ?
Current specific pricing goals
(Required)
LEVEL 1: There are no specific pricing goals defined.
LEVEL 2: General guidelines and KPIs on e.g. Margin Protection, avoiding price erosion, discount caping.
LEVEL 3: Specific pricing goals and KPIs per segment/market and targeted price positioning vs competition
LEVEL 4: Pricing goals are linked, and visibly correlated, to commercial compensation plans and overall company shareholders goals.
Target specific pricing goals
(Required)
LEVEL 1: There are no specific pricing goals defined.
LEVEL 2: General guidelines and KPIs on e.g. Margin Protection, avoiding price erosion, discount caping.
LEVEL 3: Specific pricing goals and KPIs per segment/market and targeted price positioning vs competition
LEVEL 4: Pricing goals are linked, and visibly correlated, to commercial compensation plans and overall company shareholders goals.
Do you have a list price strategy ?
Current list price strategy
(Required)
LEVEL 1: A list price is set by product management at product launch. No further defined strategies for transactional/ promotional/ special pricing
LEVEL 2: List Pricing strategies exist for some products / brands and markets. The price strategy is yearly/quarterly reviewed but often still inconsistently applied within the company.
LEVEL 3: List Pricing strategies are developed for all major products / brands and markets - and aligned to overall business objectives and corporate strategy.
LEVEL 4: List Pricing strategies are pro-activaly adapted on product lifecycle, changing market environment, based on frequent market scan insights, data analytics and competitive intelligence.
Target list price strategy
(Required)
LEVEL 1: A list price is set by product management at product launch. No further defined strategies for transactional/ promotional/ special pricing
LEVEL 2: List Pricing strategies exist for some products / brands and markets. The price strategy is yearly/quarterly reviewed but often still inconsistently applied within the company.
LEVEL 3: List Pricing strategies are developed for all major products / brands and markets - and aligned to overall business objectives and corporate strategy.
LEVEL 4: List Pricing strategies are pro-activaly adapted on product lifecycle, changing market environment, based on frequent market scan insights, data analytics and competitive intelligence.
How is your pricing strategy developed ?
Current price strategy
(Required)
LEVEL 1: A basic pricing strategy and price positioning are centrally defined (often by Product Marketing). Local sales organisation has a large 'freedom' to adapt the price strategy to local market conditions.
LEVEL 2: Pricing strategy and price positioning are developed by a small central Pricing Team (including mainly product management and finance
LEVEL 3: Pricing strategy and price positioning developed by a central Pricing Team (including marketing, sales and finance) - and all commercial stakeholders are aligned around the vision.
LEVEL 4: In addition, top management is fully aligned with the pricing strategy and communicates/reinforces the price strategy towards to market
Target price strategy
(Required)
LEVEL 1: A basic pricing strategy and price positioning are centrally defined (often by Product Marketing). Local sales organisation has a large 'freedom' to adapt the price strategy to local market conditions.
LEVEL 2: Pricing strategy and price positioning are developed by a small central Pricing Team (including mainly product management and finance
LEVEL 3: Pricing strategy and price positioning developed by a central Pricing Team (including marketing, sales and finance) - and all commercial stakeholders are aligned around the vision.
LEVEL 4: In addition, top management is fully aligned with the pricing strategy and communicates/reinforces the price strategy towards to market
How do you use price segmentation ?
Current price segmentation
(Required)
LEVEL 1: Very basic product (e.g., category) and customer segmentation (e.g., regional, application, industries) is in place.
LEVEL 2: customer segmentation (e.g., regional, revenue, application, industries) is in place. More detailed sub-segments for products are identified (e.g., ABC), mainly based on analysis of historical transactional data. Also, the subsegmentation is used for product- and/or price-differentiation.
LEVEL 3: Detailed customer segments identified based on differing customer needs / behaviours and value drivers. Product Segmentation is done on Product attributes (e.g., KVI-items, Product Cycle stages, etc) Segmentation is regularly reviewed and adjusted based on market research and in depth data analytics
LEVEL 4: Customer segmentation is dynamic, based on multiple and connected data sources and predicts customer behaviour (e.g., Strategic, Loyalty, CLV etc
Target price segmentation
(Required)
LEVEL 1: Very basic product (e.g., category) and customer segmentation (e.g., regional, application, industries) is in place.
LEVEL 2: customer segmentation (e.g., regional, revenue, application, industries) is in place. More detailed sub-segments for products are identified (e.g., ABC), mainly based on analysis of historical transactional data. Also, the subsegmentation is used for product- and/or price-differentiation.
LEVEL 3: Detailed customer segments identified based on differing customer needs / behaviours and value drivers. Product Segmentation is done on Product attributes (e.g., KVI-items, Product Cycle stages, etc) Segmentation is regularly reviewed and adjusted based on market research and in depth data analytics
LEVEL 4: Customer segmentation is dynamic, based on multiple and connected data sources and predicts customer behaviour (e.g., Strategic, Loyalty, CLV etc
Do you incorporate product life cycle in your pricing strategy?
Current product life cycle management
(Required)
LEVEL 1: Life cycle pricing is not a practice.
LEVEL 2: Limited management of product life cycles. Product portfolio pruning is done on yearly basis, but with very little alignment to the price strategy
LEVEL 3: Product life cycle management installed as a yearly process, with clear integration and alignment of price strategy.
LEVEL 4: Product life cycle and pro-active fade-out strategies are embedded in the price strategy.
Target product life cycle management
(Required)
LEVEL 1: Life cycle pricing is not a practice.
LEVEL 2: Limited management of product life cycles. Product portfolio pruning is done on yearly basis, but with very little alignment to the price strategy
LEVEL 3: Product life cycle management installed as a yearly process, with clear integration and alignment of price strategy.
LEVEL 4: Product life cycle and pro-active fade-out strategies are embedded in the price strategy.
How good is your value chain understanding ?
Current value chain understanding
(Required)
LEVEL 1: There is no formal mapping of the market value chain (go-to-market) by country.
LEVEL 2: The market value chain (go-to-market) is mapped by country. Prices and margins are understood within the chain.
LEVEL 3: The market value chain is mapped per country and prices/margins are understood within the chain- and regular updates are part of the pricing review. Corrective actions discussed with commercial strategy team to (re)gain chain power.
LEVEL 4: Additionally new go-to-market approaches and/or monetization models are investigated/tested to (re)gain market power.
Target value chain understanding
(Required)
LEVEL 1: There is no formal mapping of the market value chain (go-to-market) by country.
LEVEL 2: The market value chain (go-to-market) is mapped by country. Prices and margins are understood within the chain.
LEVEL 3: The market value chain is mapped per country and prices/margins are understood within the chain- and regular updates are part of the pricing review. Corrective actions discussed with commercial strategy team to (re)gain chain power.
LEVEL 4: Additionally new go-to-market approaches and/or monetization models are investigated/tested to (re)gain market power.
2) PRICE POLICY
To what extent is price guidance used ?
Current price guidance use
(Required)
LEVEL 1: Local sales organisation decide independently on their local market prices, with little or no alignment between the countries. Only global floor prices/product exist as guideline.
LEVEL 2: Local sales organisation decide independently on their local market prices, but the pricing department has together with sales teams defined (global/regional) target price guidance with ceiling and floor prices per region.
LEVEL 3: Target price guidance by customer and product segments defined by the central Pricing Team based on input from, and discussions with. both the local sales teams and global marketing team. Local sales organisations are aligned around a regional market
LEVEL 4: Dynamic target price guidance by customer and product segments defined by the central Pricing Team based on input from, and discussions with. both the local sales teams and global marketing team - and in depth data analytics and forecasting.
Target price guidance use
(Required)
LEVEL 1: Local sales organisation decide independently on their local market prices, with little or no alignment between the countries. Only global floor prices/product exist as guideline.
LEVEL 2: Local sales organisation decide independently on their local market prices, but the pricing department has together with sales teams defined (global/regional) target price guidance with ceiling and floor prices per region.
LEVEL 3: Target price guidance by customer and product segments defined by the central Pricing Team based on input from, and discussions with. both the local sales teams and global marketing team. Local sales organisations are aligned around a regional market
LEVEL 4: Dynamic target price guidance by customer and product segments defined by the central Pricing Team based on input from, and discussions with. both the local sales teams and global marketing team - and in depth data analytics and forecasting.
How consistent is your product portfolio pricing structure ?
Current product portfolio pricing
(Required)
LEVEL 1: Price structure evolved historically with well known inconsistencies in portfolio prices.
LEVEL 2: Portfolio pricing inconsistencies have been reported and are discussed. Corrective actions have been decided and in progress. Price distance guidelines (e.g., per customer group, price list, or countries)between the product lines have been decided but not fully implemented.
LEVEL 3: Portfolio price guidelines (price distance between the product lines) and both internal and market consistency (versus competition) fully deployed.
LEVEL 4: Additional, up & cross-selling initiatives are discussed and initiated for profit optimisation.
Target product portfolio pricing
(Required)
LEVEL 1: Price structure evolved historically with well known inconsistencies in portfolio prices.
LEVEL 2: Portfolio pricing inconsistencies have been reported and are discussed. Corrective actions have been decided and in progress. Price distance guidelines (e.g., per customer group, price list, or countries)between the product lines have been decided but not fully implemented.
LEVEL 3: Portfolio price guidelines (price distance between the product lines) and both internal and market consistency (versus competition) fully deployed.
LEVEL 4: Additional, up & cross-selling initiatives are discussed and initiated for profit optimisation.
To what extent is your product portfolio aligned with your market segments ?
Current market segments alignment
(Required)
LEVEL 1: We try to sell everything to everyone (at every price), without product differentiation. We have a one fits all product strategy.
LEVEL 2: Market - Product- and price differentiation has been installed (eg : good/better/best tiered offering) for price and margin optimisation.
LEVEL 3: Additional, segmented solutions have been developed for full value capturing (e.g. products & services bundled, product bundling, option bundling). Price bundling is installed based on willingness to pay within the segments.
LEVEL 4: Additional, we develop and introduce advanced Pricing & Business models: e.g. customer specific end-user solutions and price the output (performance or consumption based pricing, eg. pay/landing for aircraft tyres).
Target market segments alignment
(Required)
LEVEL 1: We try to sell everything to everyone (at every price), without product differentiation. We have a one fits all product strategy.
LEVEL 2: Market - Product- and price differentiation has been installed (eg : good/better/best tiered offering) for price and margin optimisation.
LEVEL 3: Additional, segmented solutions have been developed for full value capturing (e.g. products & services bundled, product bundling, option bundling). Price bundling is installed based on willingness to pay within the segments.
LEVEL 4: Additional, we develop and introduce advanced Pricing & Business models: e.g. customer specific end-user solutions and price the output (performance or consumption based pricing, eg. pay/landing for aircraft tyres).
How do you handle discounts ?
Current discounts
(Required)
LEVEL 1: Our discount policy has historically evolved and now requires refinement to ensure uniformity and alignment with our market strategy.
LEVEL 2: Discount policy is recently reviewed and optimised. The risk of cross-channel conflicts is minimalised, but there are still many unconditional discounts.
LEVEL 3: The discount structure is aligned with the market/price strategy and uniform. The full discount structure is based on functional discounts only.
LEVEL 4: Additionally conditions for granting / eligibility of functional discounts are systematically controlled and consequences management triggered.
Target discounts
(Required)
LEVEL 1: Our discount policy has historically evolved and now requires refinement to ensure uniformity and alignment with our market strategy.
LEVEL 2: Discount policy is recently reviewed and optimised. The risk of cross-channel conflicts is minimalised, but there are still many unconditional discounts.
LEVEL 3: The discount structure is aligned with the market/price strategy and uniform. The full discount structure is based on functional discounts only.
LEVEL 4: Additionally conditions for granting / eligibility of functional discounts are systematically controlled and consequences management triggered.
How do you handle discounts ?
Current price/value mapping
(Required)
LEVEL 1: Price/value mapping not in use.
LEVEL 2: Price/value mapping discussions have started between pricing team and marketing/ product development..
LEVEL 3: Price/value mapping research deployed per segment and aligned with marketing department/ product development.
LEVEL 4: Insights from price/value mapping are actively guiding portfolio and product positioning, as well as pricing strategies. Pricing levers are well-documented and systematically employed in data collection
Target price/value mapping
(Required)
LEVEL 1: Price/value mapping not in use.
LEVEL 2: Price/value mapping discussions have started between pricing team and marketing/ product development.
LEVEL 3: Price/value mapping research deployed per segment and aligned with marketing department. & LEVEL 2: Price/value mapping discussions have started between pricing team and marketing/ product development.
LEVEL 4: Insights from price/value mapping are actively guiding portfolio and product positioning, as well as pricing strategies. Pricing levers are well-documented and systematically employed in data collection.
To what extent do you understand price elasticity ?
Current price elasticity understanding
(Required)
LEVEL 1: Knowledge about the price change responsiveness is scattered in sales team.
LEVEL 2: LEVEL 2: Price elasticity analyses (data/ insights) are available. Data quality is checked, and knowledge from price elasticity analyses is used to apply these insights at the product segment and customer cluster levels, providing valuable input for internal qualitative discussions to set the optimal prices for your products
LEVEL 3: In addition, advanced research tools (as conjoint analysis, monadic design) and market tests are used to understand price elasticity & willingness to pay within segments.
LEVEL 4: Additionally usage of microsegmentation and cross-elasticities to model and forecast the impact of price changes on revenue and profits.
Target price elasticity understanding
(Required)
LEVEL 1: Knowledge about the price change responsiveness is scattered in sales team.
LEVEL 2: Price elasticity analyses (data/ insights) are available. Data quality is checked, and knowledge from price elasticity analyses is used to apply these insights at the product segment and customer cluster levels, providing valuable input for internal qualitative discussions to set the optimal prices for your products
LEVEL 3: In addition, advanced research tools (as conjoint analysis, monadic design) and market tests are used to understand price elasticity & willingness to pay within segments.
LEVEL 4: Additionally usage of microsegmentation and cross-elasticities to model and forecast the impact of price changes on revenue and profits.
To what extent do you understand willingness to pay ?
Current willingness to pay understanding
(Required)
LEVEL 1: Insights on willingness to pay is based on internal (sales) judgement.
LEVEL 2: Mainly internal workshops or client/non client focus groups are used to understand willigness to pay.
LEVEL 3: Inside-out analysis is completed with external research and third party data to determine customer willingness to pay (e.g. price elasticy analysis, conjoints, statistic modelling, etc).
LEVEL 4: Extensive set of scientific value analysis tools is available including price sensitivity research (e.g. price sensitivity algorithm, micro-segmentation, conjoint analysis, behaviour-based modelling, market simulators).
Target willingness to pay understanding
(Required)
LEVEL 1: Insights on willingness to pay is based on internal (sales) judgement.
LEVEL 2: Mainly internal workshops or client/non client focus groups are used to understand willigness to pay.
LEVEL 3: Inside-out analysis is completed with external research and third party data to determine customer willingness to pay (e.g. price elasticy analysis, conjoints, statistic modelling, etc).
LEVEL 4: Extensive set of scientific value analysis tools is available including price sensitivity research (e.g. price sensitivity algorithm, micro-segmentation, conjoint analysis, behaviour-based modelling, market simulators).
How do you mainly set prices ?
Current price setting
(Required)
LEVEL 1: Price setting for new products is purely cost-plus with market price alignment
LEVEL 2: Pricing is still mainly cost-plus, but prices (the cost +) are optimised based on better understanding of value components per segment.
LEVEL 3: Value based pricing (per segment) is used where possible based on good understanding of the value components, the price/value positioning and price elasticity.
LEVEL 4: Solutions pricing is installed, based on in-depth insight of the end-user benefits.
Target price setting
(Required)
LEVEL 1: Price setting for new products is purely cost-plus with market price alignment
LEVEL 2: Pricing is still mainly cost-plus, but prices (the cost +) are optimised based on better understanding of value components per segment.
LEVEL 3: Value based pricing (per segment) is used where possible based on good understanding of the value components, the price/value positioning and price elasticity.
LEVEL 4: Solutions pricing is installed, based on in-depth insight of the end-user benefits.
Please focus on your non-commodity product or services.
3) PRICE IMPLEMENTATION
How do you handle price escalations ?
Current price escalations handling
(Required)
LEVEL 1: Price escalation levels are not formally defined and not monitored. Authorisation process often not correctly followed or take a long time.
LEVEL 2: Price escalation levels formally defined and post-factum monitored. Authorisation process is still often not correctly followed and only visible after reporting.
LEVEL 3: Different levels of approval are predefined based on the size of the discount and the size of the deal, monitored and excessive escalations discussed in the pricing team. Price deviations are only possible in the system after formal authorisation.
LEVEL 4: In addition, price escalations are minimized and approvals are automated in an approval engine, reducing the amount of time required to approve/unapprove.
Target price escalations handling
(Required)
LEVEL 1: Price escalation levels are not formally defined and not monitored. Authorisation process often not correctly followed or take a long time.
LEVEL 2: Price escalation levels formally defined and post-factum monitored. Authorisation process is still often not correctly followed and only visible after reporting.
LEVEL 3: Different levels of approval are predefined based on the size of the discount and the size of the deal, monitored and excessive escalations discussed in the pricing team. Price deviations are only possible in the system after formal authorisation.
LEVEL 4: In addition, price escalations are minimized and approvals are automated in an approval engine, reducing the amount of time required to approve/unapprove.
How do you sell ?
Current sales
(Required)
LEVEL 1: Sales is mainly selling on product features, product advantages 'trust us' or 'on price'.
LEVEL 2: Sales team is mainly selling on differentiating product features, product advantages & company strengths (fast shipment / on demand, return policy) . The value differentiators are documented and benckmarked versus competitive alternatives.
LEVEL 3: Sales teams get segmented value argumentations and are trained to defend the prices (on the question 'great product, but why is it so expensive'?). Value calculator exists for key account use.
LEVEL 4: Sales teams trained to sell end-user solutions based on an in-depth understanding of the business model of the client. Sales seen as a strategic partner that enables the customer to develop and implement the next generation of business model
Target sales
(Required)
LEVEL 1: Sales is mainly selling on product features, product advantages 'trust us' or 'on price'.
LEVEL 2: Sales team is mainly selling on differentiating product features, product advantages & company strengths (fast shipment / on demand, return policy) . The value differentiators are documented and benckmarked versus competitive alternatives.
LEVEL 3: Sales teams get segmented value argumentations and are trained to defend the prices (on the question 'great product, but why is it so expensive'?). Value calculator exists for key account use.
LEVEL 4: Sales teams trained to sell end-user solutions based on an in-depth understanding of the business model of the client. Sales seen as a strategic partner that enables the customer to develop and implement the next generation of business model
How is list price maintenance handled ?
Current list price maintenance
(Required)
LEVEL 1: List Price Updates are entered by multiple persons (often in Sales or Order Administration) without additional checks
LEVEL 2: All price updates are based on authorized price change requests; login for system price updates are personal and correctness of price updates are reviewed by second person.
LEVEL 3: Exception list are system generated and flagged for price structure inconsistencies / business rule violations
LEVEL 4: Scenario Planning of Price changes to simulate business impacts; automated implementation of selected scenario
Target list price maintenance
(Required)
LEVEL 1: List Price Updates are entered by multiple persons (often in Sales or Order Administration) without additional checks
LEVEL 2: All price updates are based on authorized price change requests; login for system price updates are personal and correctness of price updates are reviewed by second person.
LEVEL 3: Exception list are system generated and flagged for price structure inconsistencies / business rule violations
LEVEL 4: Scenario Planning of Price changes to simulate business impacts; automated implementation of selected scenario
Do you have pricing KPI's ?
Current KPI's
(Required)
LEVEL 1: Managers need to reach out for pricing reports at the right level of detail to provide actionable insights; only ad-hoc reports.
LEVEL 2: Price Management has defined vital Pricing KPI Reports but only shared ad-hoc with limited audience.
LEVEL 3: Vital Pricing KPI Reports exist, distributed and used in regular commercial excellence reviews.
LEVEL 4: Vital Pricing KPI Reports are part of the business planning process and reviews and part of a dashboard in a pricing/analytics tool.
Target KPI's
(Required)
LEVEL 1: Managers need to reach out for pricing reports at the right level of detail to provide actionable insights; only ad-hoc reports.
LEVEL 2: Price Management has defined vital Pricing KPI Reports but only shared ad-hoc with limited audience.
LEVEL 3: Vital Pricing KPI Reports exist, distributed and used in regular commercial excellence reviews.
LEVEL 4: Vital Pricing KPI Reports are part of the business planning process and reviews and part of a dashboard in a pricing/analytics tool.
How do you manage contract compliance ?
Current contract compliance
(Required)
LEVEL 1: Random and unsystematic, no clear rules for condition deviations (e.g. cherry picking, pricing linked to volume commits)
LEVEL 2: Clear procedure and process to monitor condition adherence, but unclear/undefined consequence management
LEVEL 3: Clear procedure and process to monitor condition adherence including consequence management in order to avoid / reduce risk and margin exposure (e.g. switch to a functional discounting)
LEVEL 4: Additionally build-in mechanisms e.g. bundle checks or client supply process integration to avoid / prevent cherry picking and/or fraudulent usage of conditions
Target contract compliance
(Required)
LEVEL 1: Random and unsystematic, no clear rules for condition deviations (e.g. cherry picking, pricing linked to volume commits)
LEVEL 2: Clear procedure and process to monitor condition adherence, but unclear/undefined consequence management
LEVEL 3: Clear procedure and process to monitor condition adherence including consequence management in order to avoid / reduce risk and margin exposure (e.g. switch to a functional discounting)
LEVEL 4: Additionally build-in mechanisms e.g. bundle checks or client supply process integration to avoid / prevent cherry picking and/or fraudulent usage of conditions
Do you have a price/margin improvement process in place ?
Current price/margin improvement
(Required)
LEVEL 1: Little guidance given on where greatest opportunities for improvement reside.
LEVEL 2: Some guidance given on accounts and/or products with greatest need for margin improvement (e.g., by comparing general margin metrics).
LEVEL 3: Customer and customer/product rankings based on opportunity for price/profit improvement available. Visibility of peer performance (customers, products). Ability to drill into any level of detail for root cause analysis.
LEVEL 4: Additionally tool generated targeted proposals for upsell & cross sell opportunities for profit improvements.
Target price/margin improvement
(Required)
LEVEL 1: Little guidance given on where greatest opportunities for improvement reside.
LEVEL 2: Some guidance given on accounts and/or products with greatest need for margin improvement (e.g., by comparing general margin metrics).
LEVEL 3: Customer and customer/product rankings based on opportunity for price/profit improvement available. Visibility of peer performance (customers, products). Ability to drill into any level of detail for root cause analysis.
LEVEL 4: Additionally tool generated targeted proposals for upsell & cross sell opportunities for profit improvements.
Are your sales incentives aligned with the price strategy ?
Current sales incentives
(Required)
LEVEL 1: Sales incentives are mainly volume driven or on total revenues.
LEVEL 2: Sales incentives are a mix of volume/margin targets per product group or channels.
LEVEL 3: Sales incentives are based on a combination of volume/margin and net price realization per segment/channel. Strategic actions are also taken into account, such as the digitalization of customers, acquisition of new strategic customers, etc
LEVEL 4: Additionally quota retirement is linked to price guidance realization - e.g. different accelerators by good / better / best price levels.
Target sales incentives
(Required)
LEVEL 1: Sales incentives are mainly volume driven or on total revenues.
LEVEL 2: Sales incentives are a mix of volume/margin targets per product group or channels.
LEVEL 3: Sales incentives are based on a combination of volume/margin and net price realization per segment/channel. Strategic actions are also taken into account, such as the digitalization of customers, acquisition of new strategic customers, etc
LEVEL 4: Additionally quota retirement is linked to price guidance realization - e.g. different accelerators by good / better / best price levels.
4) PRICE REPORTING
To what extent is your price waterfall visible ?
Current price waterfall visibility
(Required)
Level 1: Gross margin details available on product line and customer level
Level 2: Detailed price waterfalls are installed for every customer. Net customer profitability is systematically monitored - cost to serve are allocated on assumptions.
Level 3: Detailed price waterfalls are installed for every customer, net customer profitability is systematically monitored - and cost-to-serve per customer is based on activity based costing model
Level 4: In addition, customer life time value is calculated/forecasted - and used to for deal making purpose
Target price waterfall visibility
(Required)
Level 1: Gross margin details available on product line and customer level
Level 2: Detailed price waterfalls are installed for every customer. Net customer profitability is systematically monitored - cost to serve are allocated on assumptions.
Level 3: Detailed price waterfalls are installed for every customer, net customer profitability is systematically monitored - and cost-to-serve per customer is based on activity based costing model
Level 4: In addition, customer life time value is calculated/forecasted - and used to for deal making purpose
To what degree is your profitability visible ?
Current profitability visibility
(Required)
Level 1: No systematic monitoring of segment / channel / customer / product profitability
Level 2: Segment / channel / customer / product profitability is systematically monitored - cost to serve is allocated on assumptions
Level 3: Segment / channel / customer / product profitability is systematically monitored - cost to serve is based on activity based costing model
Level 4: Additionally simulation reports on profit improvement potential available
Target profitability visibility
(Required)
Level 1: No systematic monitoring of segment / channel / customer / product profitability
Level 2: Segment / channel / customer / product profitability is systematically monitored - cost to serve is allocated on assumptions
Level 3: Segment / channel / customer / product profitability is systematically monitored - cost to serve is based on activity based costing model
Level 4: Additionally simulation reports on profit improvement potential available
To what extent do you report win/loss analysis ?
Current win/loss analysis
(Required)
Level 1: There is no systematically reported win/loss analysis.
Level 2: Win/loss analysis information is centralised and available for sales/marketing/product mgt/pricing. But no formal review meetings installed.
Level 3: Win/loss analysis information is centralised and available for sales/marketing/product mgt/pricing. Periodic review meetings and corrective action plans developed and implemented. Reactive mode.
Level 4: In addition the win/loss information is linked to the Pricing system for automatic dynamic price guidance generation. Proactive mode.
Target win/loss analysis
(Required)
Level 1: There is no systematically reported win/loss analysis.
Level 2: Win/loss analysis information is centralised and available for sales/marketing/product mgt/pricing. But no formal review meetings installed.
Level 3: Win/loss analysis information is centralised and available for sales/marketing/product mgt/pricing. Periodic review meetings and corrective action plans developed and implemented. Reactive mode.
Level 4: In addition the win/loss information is linked to the Pricing system for automatic dynamic price guidance generation. Proactive mode.
To what extent do you track competitive price information ?
Current competitive price information
(Required)
Level 1: Competitve price tracking is done ad hoc and availibility is scattered amongst sales
Level 2: Competitive price tracking is internally tracked via call reports, win/loss reports etc., but only limited analysis is used on an ad hoc basis for pricing decisions
LEVEL 3: Competitive price tracking is systematically carried out by both sales and pricing research teams, utilizing advanced pricing software and scraping tools. These tools grant immediate access to competitive pricing data, including archived B2B agents' price lists for historical trends analysis and price scraping in the B2C market. Moreover, calculations of average margins for distributors and chain partners are routinely conducted to obtain insights and determine correlations with our competitors' pricing.
Level 4: In addition, sales is also tracking competitive insights (eg capacity) and informations is centralised.
Target competitive price information
(Required)
LEVEL 1: Competitve price tracking is done ad hoc and availibility is scattered amongst sales
LEVEL 2: Competitive price tracking is internally tracked via call reports, win/loss reports etc., but only limited analysis is used on an ad hoc basis for pricing decisions
LEVEL 3: Competitive price tracking is systematically carried out by both sales and pricing research teams, utilizing advanced pricing software and scraping tools. These tools grant immediate access to competitive pricing data, including archived B2B agents' price lists for historical trends analysis and price scraping in the B2C market. Moreover, calculations of average margins for distributors and chain partners are routinely conducted to obtain insights and determine correlations with our competitors' pricing.
LEVEL 4: In addition, sales is also tracking competitive insights (eg capacity) and informations is centralised.
5) PRICE ORGANIZATION
How is your pricing organised ?
Current pricing organization
(Required)
LEVEL 1: No pricing organisation installed, prices are mainly advised by PM and set by sales
LEVEL 2: Pricing team installed, often embedded in the finance department, reporting to the CFO - Sales has accepted the pricing team members as solid advisors in deal making and as a very good source of price/margin information.
LEVEL 3: Pricing team installed with clear mission - Pricing goals and KPI's are defined - a RACI-document is developed around the core pricing processes. The pricing department is embedded in the commercial organisation reporting to the CMO
LEVEL 4: Pricing role is present in the leadership team (Chief Pricing Officer) and reports directly to the CEO - the global pricing team is often established as a center of excellence.
Target pricing organization
(Required)
LEVEL 1: No pricing organisation installed, prices are mainly advised by PM and set by sales
LEVEL 2: Pricing team installed, often embedded in the finance department, reporting to the CFO - Sales has accepted the pricing team members as solid advisors in deal making and as a very good source of price/margin information.
LEVEL 3: Pricing team installed with clear mission - Pricing goals and KPI's are defined - a RACI-document is developed around the core pricing processes. The pricing department is embedded in the commercial organisation reporting to the CMO
LEVEL 4: Pricing role is present in the leadership team (Chief Pricing Officer) and reports directly to the CEO - the global pricing team is often established as a center of excellence.
How strong are your pricing capabilities in terms of people ?
Current team pricing capabilities
(Required)
LEVEL 1: Little or no specific training on improving front-line pricing skills and performance exists
LEVEL 2: Most individuals with a role in pricing have been through a (in-house or open) pricing training program; the learning program receives good reviews and has some positive impact on behavior.
LEVEL 3: Everyone with a role in pricing received comprehensive in-house pricing training (e.g., sales manager, both experienced and new sales reps); multiple venues used to reinforce good pricing (e.g., sales meetings, one-on-one coaching, joint sales calls...)
LEVEL 4: Pricing seen as a strategic area, centralized highly skilled and experienced team of experts and strategic management; continuous exchange of the pricing team with external organisations and experts.
Target team pricing capabilities
(Required)
LEVEL 1: Little or no specific training on improving front-line pricing skills and performance exists
LEVEL 2: Most individuals with a role in pricing have been through a (in-house or open) pricing training program; the learning program receives good reviews and has some positive impact on behavior.
LEVEL 3: Everyone with a role in pricing received comprehensive in-house pricing training (e.g., sales manager, both experienced and new sales reps); multiple venues used to reinforce good pricing (e.g., sales meetings, one-on-one coaching, joint sales calls...)
LEVEL 4: Pricing seen as a strategic area, centralized highly skilled and experienced team of experts and strategic management; continuous exchange of the pricing team with external organisations and experts.
Do you have a long term pricing capability development plan ?
Current long term pricing capabilities
(Required)
LEVEL 1: There is no vision how to further develop the pricing skills/maturity in the organisation.
LEVEL 2: The core pricing team has been trained to evaluate the organisational pricing maturity and developed a pricing action plan for the next year. Additionally, the team has been EPP CPM2 certified (or equivalent)
LEVEL 3: The pricing team has a clear picture of the pricing maturity. They have defined the future status and a 3-years planning to reach the desired pricing maturity. The pricing team (and preferable also the key marketing team) is EPP CPM level 3 certified
LEVEL 4: Pricing maturity seen as an enabler to develop, implement and support of new go-to-market strategies and concepts; seen as a competitive advantage and as an opportunity to outperform competition
Target long term pricing capabilities
(Required)
LEVEL 1: There is no vision how to further develop the pricing skills/maturity in the organisation.
LEVEL 2: The core pricing team has been trained to evaluate the organisational pricing maturity and developed a pricing action plan for the next year. Additionally, the team has been EPP CPM2 certified (or equivalent)
LEVEL 3: The pricing team has a clear picture of the pricing maturity. They have defined the future status and a 3-years planning to reach the desired pricing maturity. The pricing team (and preferable also the key marketing team) is EPP CPM level 3 certified
LEVEL 4: Pricing maturity seen as an enabler to develop, implement and support of new go-to-market strategies and concepts; seen as a competitive advantage and as an opportunity to outperform competition
6) PRICE SYSTEMS
How is your pricing infrastructure integrated ?
Current infrastructure integration
(Required)
LEVEL 1: Fragmented IT landscape, tools / systems not integrated, multiple data entry. Typically distributed and independent ERP systems.
LEVEL 2: CRM and ERP systems established but no integrated data exchange, independent / stand-alone Pricing-, Configuration- and Quoting systems.
LEVEL 3: Data exchange between front-end and back-end systems, partially integration of CPQ (Config-Price-Quote) into CRM and ERP infrastructure.
LEVEL 4: Pricing maturity seCentralized ERP and CRM systems; company-wide data and reporting structures; fully integrated Lead-to-Cash system infrastructure.en as an enabler to develop, implement and support of new go-to-market strategies and concepts; seen as a competitive advantage and as an opportunity to outperform competition
Target infrastructure integration
(Required)
LEVEL 1: Fragmented IT landscape, tools / systems not integrated, multiple data entry. Typically distributed and independent ERP systems.
LEVEL 2: CRM and ERP systems established but no integrated data exchange, independent / stand-alone Pricing-, Configuration- and Quoting systems.
LEVEL 3: Data exchange between front-end and back-end systems, partially integration of Price Management and or CPQ into CRM, eCommerce/ PIM and ERP infrastructure.
LEVEL 4: Pricing maturity seCentralized ERP and CRM systems; company-wide data and reporting structures; fully integrated Lead-to-Cash system infrastructure.en as an enabler to develop, implement and support of new go-to-market strategies and concepts; seen as a competitive advantage and as an opportunity to outperform competition
What pricing tools do you use ?
Current pricing tools
(Required)
LEVEL 1: Mainly Excel based for price list maintenance and ad hoc reporting. No vital pricing reports are automatically available periodically.
LEVEL 2: Still mainly Excel based or home grown tools; vital pricing reports have been defined and delivered frequently - reports can deliver insights in specific customer- and product segment clusters. Pricing software tools and providers are explored/evaluated.
Level 3: Pricing software is implemented to manage and automate price management processes. This software generates uniform price lists tailored to each customer and product segment, employing various highly segmented pricing strategies. Suggestions for optimal prices, provided by intelligent ML algorithms, are utilized for price optimization. Proposals (quotes) are created using this pricing software in conjunction with CPQ (Configure, Price, Quote) software.
Level 4: Pricing software is fully integrated into the sales enablement process, and it is utilized not only by the pricing team but also by marketing, sales, and finance. The organization is constantly learning and identifying new pricing drivers/levers to incorporate into the pricing algorithms.
Target pricing tools
(Required)
LEVEL 1: Mainly Excel based for price list maintenance and ad hoc reporting. No vital pricing reports are automatically available periodically.
LEVEL 2: Still mainly Excel based or home grown tools; vital pricing reports have been defined and delivered frequently - reports can deliver insights in specific customer- and product segment clusters. Pricing software tools and providers are explored/evaluated.
Level 3: Pricing software is implemented to manage and automate price management processes. This software generates uniform price lists tailored to each customer and product segment, employing various highly segmented pricing strategies. Suggestions for optimal prices, provided by intelligent ML algorithms, are utilized for price optimization. Proposals (quotes) are created using this pricing software in conjunction with CPQ (Configure, Price, Quote) software.
Level 4: Pricing software is fully integrated into the sales enablement process, and it is utilized not only by the pricing team but also by marketing, sales, and finance. The organization is constantly learning and identifying new pricing drivers/levers to incorporate into the pricing algorithms.
To what extent is your sales force enabled with pricing tools during the sales process ? (Special Pricing & Quote Process)
Current sales force tools
(Required)
LEVEL 1: No Sales and Partners enablement, all Special Pricing handled via back-office processes, back-office predominantly based on manual processes.
LEVEL 2: Special Pricing request handling still done by back-office but supported by pricing tools (predominantly home grown). Predominantly min. margin / max. discount based guidance.
LEVEL 3: Pricing and/or CPQ software availble to generate Pricing Guidance for transactional pricing but no integration to CRM or other Sales system; communication of pricing guidance via spreadsheets and or mail.
LEVEL 4: Integrated self-serve Configure-Pricing-Quoting infrastructure for Sales, Partner or end-customer with system controlled exception handling and tracking workflows. Usage of system generated Pricing Guidance.
Target sales force tools
(Required)
LEVEL 1: No Sales and Partners enablement, all Special Pricing handled via back-office processes, back-office predominantly based on manual processes.
LEVEL 2: Special Pricing request handling still done by back-office but supported by pricing tools (predominantly home grown). Predominantly min. margin / max. discount based guidance.
LEVEL 3: Pricing and/or CPQ software availble to generate Pricing Guidance for transactional pricing but no integration to CRM or other Sales system; communication of pricing guidance via spreadsheets and or mail.
LEVEL 4: Integrated self-serve Configure-Pricing-Quoting infrastructure for Sales, Partner or end-customer with system controlled exception handling and tracking workflows. Usage of system generated Pricing Guidance.
How satisfied are you with the pricing data quality in your systems ?
Current pricing data quality
(Required)
LEVEL 1: Pricing data is incomplete or not available (e.g., missing key variables such as rebates or cost to serve); data is scattered across different data systems; data requires significant manual “cleaning” and manipulation to be useable.
LEVEL 2: Data is mostly correct and complete but tends to be scattered across multiple data systems requiring regular integration to be useable.
LEVEL 3: Data (e.g. pricing analytics, profitability metrics) is mostly correct and complete but tends to be scattered across multiple data systems requiring regular integration to be useable; data is periodically updated and believed to be accurate enough.
LEVEL 4: Centralized databases for all relevant pricing data with key price, cost, market and segmentation information is in place (e.g., all pocket price elements, and important cost to serve, competitive price levels, terms, win/loss data).
Target pricing data quality
(Required)
LEVEL 1: Pricing data is incomplete or not available (e.g., missing key variables such as rebates or cost to serve); data is scattered across different data systems; data requires significant manual “cleaning” and manipulation to be useable.
LEVEL 2: Data is mostly correct and complete but tends to be scattered across multiple data systems requiring regular integration to be useable.
LEVEL 3: Data (e.g. pricing analytics, profitability metrics) is mostly correct and complete but tends to be scattered across multiple data systems requiring regular integration to be useable; data is periodically updated and believed to be accurate enough.
LEVEL 4: Centralized databases for all relevant pricing data with key price, cost, market and segmentation information is in place (e.g., all pocket price elements, and important cost to serve, competitive price levels, terms, win/loss data).
Do you anticipate using pricing software, algorithms, machine learning or CPQ (Configure Pricing Quote) software in the future?
No
Yes, in 1 year
Yes, in 1-2 years
Yes, in 2-4 years
Yes, in 5+ years
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