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In Pricing, Success Breeds Success


A.T. Kearney

A.T. Kearney's Pricing Full Potential (PFP) Analyzer does the heavy lifting when it comes to pricing. The more market power you have, the more you can still gain from your pricing strategy.

In the summer of 2013, A.T. Kearney surveyed more than 1,600 businesses in five countries to get an "outside view" and answers to two fundamental questions:1 How much money can a business realistically gain from better pricing? Is there a simple, reliable way to predict these gains? The short answers are "much more" and "yes."

This study, which includes major companies in various for-profit industries, has yielded three compelling and practical insights on how companies can make significantly higher profits from better pricing.

- Know what's at stake for your business. Improved pricing increases gross profits by 15 percent on average over a three-year period, often multiplying net profits and raising market capitalization by hundreds of millions of Euros.
- Don't stop. There is always more to gain. The more market power a company has, the more profits it can still gain from further pricing improvements.
- Go deep, not broad. The best pricing performers succeed by focusing on a small number of pricing improvement efforts rather than broad-based pricing programs.

These findings not only illustrate what factors separate the pricing outperformers from others, but also paved the way for development of a new tool, the Pricing Full Potential (PFP) Analyzer. The PFP Analyzer provides simple, reliable estimates of how much profit is at stake.


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