PE-backed Automotive Technology Company Transforms Business Model and Pricing to Accelerate Growth

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Case Study
PE-backed Automotive Technology Company Transforms Business Model and Pricing to Accelerate Growth

Industry: Automotive Technology

Challenge: Pricing Strategy, Business Planning and Decision Support

Solution: Pricing Analytics, Financial Modelling, Reporting

Technology: MY SQL, Excel

High Angle View Of Cars On Production Line In Factory. Many Robottic Arms Doing Welding On Car Metal Body In Manufacturing Plant. Image In 3D Render.

Situation and Challenge

Our technology client, backed by private equity, is on an ambitious mission to optimise its pricing strategy to drive business growth and profitability.

In the face of its rapid market expansion, the company’s challenge is an ever-expanding supply of aftermarket diagnostics tools to customers in 120 countries, a complex blend of sales channels, products, support services, discounts and fees, and a legacy pricing model that’s becoming increasingly difficult to manage.

Put simply, our client needs to simplify their product pricing and service packaging to ensure that the business takes full advantage of its market expansion and innovations.

Insight and Action​

Working closely with the CFO, we developed a new pricing strategy to transition the organisation from a traditional license and maintenance model to a subscription-based SaaS pricing model. This included constructing a business planning model to provide analysis, reporting, and decision support.

We constructed a robust financial and portfolio pricing model that gave the business the confidence and flexibility to foresee the financial upsides of diverse go-to-market strategies, fees, pricing, and transactions. The model also enabled the calculation of price elasticity and the analysis of any risk of cannibalisation from new product introductions, providing invaluable insight for effective decision-making.

To ensure accuracy, we worked closely with the business teams to define boundaries and exceptions, map out input and output parameters, and identify the correlations between decision variables and their effects on business performance.

Results and Impact

We provided the CFO and executive team with expert strategic guidance to evaluate go-to-market strategies for their new products. By applying customer value modelling, we were able to determine how product bundling and promotional offers could increase revenue and foster product loyalty in both existing and new markets.

Our analysis and recommendations enabled the business to quantify the impact of its operating model changes, including sales incentives, partner compensations, service packaging, etc. As a result, they were able to expand into 3 new countries and deprecate a legacy product to focus development on next-generation diagnostics platform features, as well as launch a new support service offering.

Finally, we worked alongside the portfolio company finance and sales teams to align the implementation plan with the senior management and PE board.

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