Pricing Assessment for a software applications company

Challenge

Software application pricing was inconsistent across the company’s go-to market industry sectors and modules, lacking justification and process discipline and accountability. Senior management sought to understand business impact and best practices and to develop a plan to align pricing to the company’s overall strategic objectives and financial plan.

Approach

• Situation assessment: Identified the range of current practices and outcomes.
• Competitive benchmarking: Examined the pricing practice of several of the company’s major competitors, as well as other non-competitor software companies.
• Pricing strategy: Incorporated factors such as named users, transaction volumes, SKUs, modules incorporated, algorithms enabled and other factors to align pricing to value creation as well as the cost of deployment and maintenance.
• Pricing Tool: Developed an analytical tool for sales to prepare pricing which also formed basis for justification, documentation and approvals.
• Action Plan: Conducted pricing tool user and process training.

Results

• Clear, supportable and documented pricing strategy and processes, with supporting tool.
• Improved financial results.