Pricing & Revenue Management
Pricing models built on elasticities, willingness to pay and customer lifetime value to capture profitability without losing market share.
The challenge
Most companies price by cost or by competitor benchmark, leaving margin on the table and eroding profitability through ungoverned discounting.
Our approach
- Diagnostic of pricing structure, discounts and profitability by product and channel
- Cross-elasticity and willingness-to-pay models by micromarket
- Design of pricing architecture, packaging and commercial policies
- Discount governance and price-realization tracking dashboards
Deliverables
- Dynamic pricing model by segment and micromarket
- Elasticity matrix and P&L impact simulator
- Commercial policy and discount rules
- Implementation plan with owners and KPIs
Price-to-Pocket
From list price to pocket margin.
No pricing decision is approved without knowing the real margin that reaches the pocket after discounts, rebates and cost to serve.
Value waterfall
We rebuild the full price route: list price, invoice discounts, rebates, credit notes, freight and cost to serve, down to pocket margin by customer, product and channel.
- Price waterfall by SKU and customer
- Margin leakage map
- Price dispersion diagnostic
Value and willingness to pay
We measure what each micromarket is willing to pay and how much each attribute is worth, separating price from cost and anchoring it to perceived value.
- Conjoint / Van Westendorp
- Cross-elasticities by micromarket
- Value-price map against competitors
Price architecture
We design tiers, bundles, charging metrics and discount corridors that make every product-channel-segment combination profitable.
- Portfolio architecture and bundles
- Discount corridors by segment
- P&L impact simulator
Governance and realization
We install the rules, approval levels and incentives that ensure the designed price is the price actually charged, with monthly tracking.
- Commercial policy and approval matrix
- Price-realization dashboard
- Sales-force incentive redesign
P2P·NS methodology path
Sequence of phases, with the analytical focus of each one and the decision point that closes it.
Fig. 1 · Phase flow
Pocket-price waterfall
Real margin is measured after invoice discounts and the leakage that never appears on the invoice. NS base index values put the average pocket price at around half of list price.
Fig. 3 · Pocket-price waterfall (index base 100 · NS method)
Reference ranges behind the framework
Index values from the NS engagement base that we use to calibrate hypotheses and targets before measuring with the client's own data.
of operating profit for every 1% improvement in price, at constant volume, in listed companies
NS Base · Pricing & Revenue Managementof off-invoice leakage (rebates, freight, promotions) that never shows up in the list price
NS Base · Pricing & Revenue Managementof every dollar of list-price increase that the median company actually collects (95¢ for the top quartile)
NS Base · Pricing & Revenue ManagementFig. 4 · NS reference ranges
Deliverables map
Each deliverable is anchored to the phase where it is produced and validated with the client team.
Fig. 2 · Deliverables by phase
The figures use reference ranges and index values from the NS method, calibrated with our project base and market tracking. Each project's results are reported with the client's actual figures.
Lead partner
José Manuel Noriega
Business economics: price, growth, margin and capital.
See partner profilesAI as an accelerator in this practice
We model elasticities and detect margin leakage with machine learning across the full transactional history.
- Price waterfall rebuilt automatically from millions of invoice lines, rebates and credit notes
- Elasticity and willingness-to-pay models trained by micro-market and continuously refreshed
- Price-volume-margin simulator with scenarios generated in minutes for the commercial committee
- Automated alerts on out-of-corridor discounts and realized price erosion
We work with data governance, confidentiality controls and human validation on every deliverable: AI accelerates the analysis, it never replaces the decision.
Impact cases
price with no loss of share
National micromarket pricing model with cross-elasticities for self-construction products, delivered to the Analytics Department.
Multinational cement company · Mexico
profitability
Redesign of the local dynamic pricing model for precast cement commercialization.
Regional cement company · Peru
average ticket
Pricing strategy for in-restaurant operations and digital delivery platforms.
Restaurant chain · Mexico
renewal discounts
Redesign of commercial policies that increased the portfolio's technical result by 2%.
Leading insurer · Peru
Insights from this practice
Frameworks and criteria we use on projects, explained in detail.
The price waterfall: where margin leaks that nobody sees
Between list price and the margin that actually reaches the cash register there are between ten and twenty deductions. Most never appear on the invoice, and almost none have an owner.
6 min readPricingWillingness to pay: how to measure it before setting the price
Setting price by cost-plus-margin is delegating the decision to accounting. There are proven methods to ask the market before you launch.
7 min readPricingDiscount governance: corridors that actually get respected
Commercial policy usually exists on paper and not in the operation. The gap between the two is called an exception, and it's paid every month.
5 min readLet's talk about your specific case
A first conversation is enough to size the opportunity.