Data-based price optimisation in the construction industry

In the construction industry, companies are often under enormous pressure to keep their prices stable while costs are rising and competition is increasing. Strategically thought-out and data-based pricing, or value-based pricing, is therefore crucial not only to remain competitive, but also to secure long-term profitability. In this article, you will learn how to develop and implement a customised pricing concept that will be successful despite pressure in the market.

Data-based price optimisation: the key to pricing
Data-driven price optimisation allows you to base pricing on sound information and market analysis rather than guesswork. This approach creates greater transparency and ensures that you define the right prices to both fulfil customer requirements and protect your margins.

Through a targeted ABC customer analysis and a downstream price sensitivity analysis, you can classify your customers according to their importance and profitability. This analysis helps you to prioritise your pricing strategy to the most valuable customer groups and develop differentiated pricing models that are tailored to your customers' needs.

Enforce prices despite pressure in the market
In a highly competitive market, it is often difficult to enforce prices, especially when customers push for discounts or competitors lower their prices. However, it is precisely in such situations that it is important to pursue a clear, strategic pricing approach. Here are some measures to successfully enforce prices despite market pressure:

• Prioritisation: focus on the most important customers and products. Prioritisation helps you to implement targeted price increases where the added value for the customer is greatest.
• ABC customer analysis: The ABC analysis helps you to categorise your customers. You can develop customised pricing strategies for A customers, who account for the largest share of sales. B and C customers, on the other hand, could benefit from standardised pricing approaches. It is also important to record and analyse the price sensitivity of the respective customer groups.
• Implications for the range of services, sales and the portfolio: Targeted price optimisation has implications for your entire business model. Not only may the range of services need to be adapted, but your sales organisation should also be prepared for the new pricing strategies. At the same time, you should regularly review your portfolio and eliminate products that are difficult to sell at the targeted prices.

Conception and definition of a customised pricing approach
A successful pricing approach is based on a clear concept and careful definition. You should not only keep an eye on the market and the competitive landscape, but also on your internal cost structures and your customers' willingness to pay.

1. Conception pricing approach: In the conception phase, you develop an overarching strategy that defines your pricing policy in the long term. The aim here is to set target prices and determine which customers and products require which price level.
2. Definition of pricing approach: The next step is the precise definition. This is where you decide which pricing models you want to use, for example whether volume-based discounts, dynamic prices or project-based pricing make sense. The definition should provide clear guidelines for your sales staff to follow.

Implementing the pricing approach: getting employees on board
Successful price optimisation stands and falls with consistent implementation. It is therefore essential to get your employees on board. In sales in particular, it is important that your teams understand why certain price adjustments are necessary and how they can represent them confidently in discussions with customers.

Training courses and internal workshops are a sensible way of communicating the new pricing strategy and preparing employees for the challenges. Successful implementation also means integrating the pricing process into your existing pricing processes and management structures.

Conclusion: price optimisation as a competitive advantage
Data-based price optimisation provides the basis for structuring your prices strategically and profitably - even in a dynamic market environment. Prioritising your customers and products based on a well-founded ABC customer analysis gives you the flexibility you need to successfully enforce prices even in the face of increasing competitive pressure.

A well thought-out and customised pricing concept that takes into account the implications for the range of services, sales and the portfolio can make a decisive contribution to strengthening your competitiveness and securing your profitability in the long term. Remember: the consistent implementation of the pricing approach and the involvement of your employees are crucial for success.