Allredi recorded an 8.7% increase in total margins
Allredi, a manufacturer and distributor of surface preparation equipment, parts, and supplies, faced challenges with low utilization of list prices among the sales team (20-30%) and a reliance on “last price paid” or “lowest acceptable price” instead of maximizing the full value customers would pay. They needed a new pricing model that could be easily communicated while mitigating the risk of volume compression. Previous pricing projects by competitors had eroded trust from both sellers and customers.
Pricing
Company’s Challenge
The retained agencies were non-performers.
Allredi faced the challenge of low utilization of list prices among the sales team, with only 20-30% adherence.
The company relied heavily on the "last price paid" or "lowest acceptable price" approach.
It was crucial to develop a new pricing model that could be easily communicated internally and to customers, while also mitigating the risk of volume compression.
Previous pricing projects by competitors had resulted in a significant erosion of trust from both sellers and customers, creating resistance within the sales team.
Uncertain and unpredictable supplies due to post-pandemic supply chain issues added complexity to the project and pricing decisions.
Cortado Group Results
Allredi witnessed significant improvements in their financial performance as a direct result of the engagement. Net margins on the covered products increased by a remarkable 14.7%, while overall margins grew by 8.7%.
By exceeding their EBITDA targets, Allredi demonstrated the effectiveness and impact of the implemented pricing strategies, contributing to the company's enhanced profitability.
The successful turnaround achieved at Allredi through the engagement with Cortado Group positions the company for sustained growth and success in the industrial, infrastructure, and downstream energy sectors.
Cortado Group SolutionStrategies
New Pricing Strategy and Model
Designed a go-forward pricing strategy and model based on research and customer dynamics, prioritizing high-value customers.
Targeted Pricing Increases
Improved the ability to target pricing increases in areas of opportunity while mitigating risks of volume decline.
Customer Buying Behavior Insights
Provided insights into customer buying behavior and migration to new pricing, with a focus on the impact on the overall financials of the business.
Campaign Planning
Implemented campaign planning and governance at multiple levels, from the high-level annual plan to individual campaign plans.
Pricing Model Implementation
Rolled out the new pricing model and conducted training sessions to ensure compliance with the sales team.
Solutions Provided
Pricing Strategy & Model
Pricing Execution
Pricing Enablement
Training
Key Insight
Implementing pricing strategies resulted in a remarkable financial turnaround at Allredi, with net margins increasing by 14.7% and overall margins growing by 8.7%
