Problem
Increasingly, businesses are drawn into a competition over price, where a ‘race to the bottom’ mentality ultimately ends up benefiting no-one. Cargill approached ProfitAbility as they were looking to design a training program that would help them achieve 4 key objectives:
Help employees to understand how competing on price alone can be destructive to the market, and showing how differentiation helps to capture more value for the company in the long run
Positioning the expertise and availability of the Global Pricing Team as a key resource to help each business unit thrive
Showing employees why aspects of commercial acumen, such as data analysis and competitive intelligence, are critical skills to develop
Reducing the cost (per learner) of training, to encourage scale of the L&D programs.
Solution
ProfitAbility collaborated with the Cargill team to develop the Strategic Pricing Bootcamp, leveraging the Pricing for Profit digital simulation as its foundation. This multi-part 4-hour game provides a fun but competitive environment, where participants work in teams, employing strategic thinking and competitive bidding to maximise profits. Additionally, there are subject-matter experts on-hand to deliver world-class coaching.
This simulation acts as a key entry point for commercial leaders and sales professionals to fully realise and then tap into the resources and expertise within Cargill’s pricing team. Participants of this simulation have sought consultation and additional resources that have led to some impressive business results.
The program is delivered remotely, mitigating the time and financial commitments associated with similar past initiatives. It also contributes to a reduction in the organisation’s carbon footprint.
Impact
Since the program’s launch in June 2020, over 680 learners have completed the simulation, which has yielded strong results for the business in terms of increased bottom line and reduced L&D costs.
Training cost reduction of 98%, from $4500 to $100 per participant
Eliminated travel costs of between $3000-$5000 per learner and coach
Eliminated external facilitation costs of £160k per year
Increased the number of learners per year by 300% (300 learners vs 100 per year previously)
30% increase in Consultations with the Global Strategic Pricing Team within six months of program launch
Participants adopting Strategic Pricing principles have secured opportunities due to net $10M per year more than non-participant control groups.
"Strategic pricing optimises total business profitability. It's a series of capabilities we adjust over time to get the best combination of volume and margin for every customer. Specifically, the Pricing for Profit simulation enables learners in the cohort to openly compete in real-world scenarios. The simulation creates the experiential learning necessary to deploy the Strategic Pricing value concepts. The knowledge gained in the simulation accelerates the application of learnings into the business teams and enhances our profitability and the value we deliver to customers.” Lynn Guinn, Commercial Excellence Global Strategic Pricing Leader