One of the market leading suppliers to the leading diagnostics companies worldwide, and thousands of other clinical laboratories.
+8.4% additional revenue equivalent to £4m EBITDA impact, recurring every year
An upskilled sales force
A plan to ensure sustainability of value capture into the future
As a client with major supply relationships with their customers, we saw the customers getting better terms each year at the expense of the client
The PHG Value Capture Maximisation process was deployed on 12 accounts:
In addition, we provided a holistic assessment of why and where value leakage occurs and resultantly what the client could do to overcome this.
On each situation, we developed quality insights to gain a complete understanding of customer situation and relationship. Understanding why value is leaking and why the relationship dynamics have developed to the position they are today is crucial to making a good commercial decision.
Assessing the level of pricing power was a key analysis, which was done using an unbiased Pricing Power calculator. The calculator was facilitated by a survey given to each account team, taking around 30 minutes to fill. Criteria include:
We collaboratively worked with each team of relationship owners to thoroughly explore opportunities to maximize value capture, and align on the optimal decision. We ensured the strategy was a collectively built solution which the team were confident in executing. We pushed the teams to go further than they would have done naturally, done through a full understanding of the situation and validating positions they had with independent perspectives.
Strategy often focussed on securing a sustainable relationship alongside improved commercial terms for consistency of financials into the future.
You gain additional power in a negotiation by being able to deliver your side well. In each case we crafted optimal messaging for the relationship owners to deliver the new commercial terms. Each presentation painted a picture as to why the proposal was fair and in the interest of both parties.
We worked through potential push back from the customer and how to handle this. Negotiations are a process, and we ensured strategies accounted for what to do after the first play.
Working on the ground allowed a thorough understanding of how the organisation operated. We regularly updated senior stakeholders on what we saw, uncovering business practices and the current stage of pricing maturity. We used PHG frameworks around pricing maturity to do this.
Successful Value Capture Maximisation projects go beyond identification or opportunities. Here, we focused on improving the internal capabilities of sales teams, helping to realising power and developing plans for sustainability of value capture. This included: