Journey towards Value Based pricing

Challenge

• VTT – one of Europe’s leading research institutions – was looking ways to move towards Value Based selling and pricing of its services to companies
• Historically, VTT’s pricing was mostly based on cost plus approach
• Theory of Value Based selling and pricing is generally known, but it needed to be planted into VTT’s unique business and culture

Brave the future

• August supported VTT’s management in designing new pricing practices for commercial research projects
• New practices aimed at implementing a systematic and harmonized pricing process, improved value capture of VTT’s unique capabilities and impact sharing between client and VTT (whenever possible)
• After the blueprint definitions, VTT continued in customizing supporting tools and in training teams into the process

Impact

• Year after definition phase new tools for price setting and reporting have been introduced and trained to relevant people
• There is an improved understanding in the organization on the customer value and business impact created in the projects and in several cases impact based pricing and value sharing is applied
• New pricing approach has led to a better focus on value creation and improved pricing performance

“August brought a lot of practical experience on pricing development and helped us formulate an ambitious, yet implementable pricing approach. Happy to recommend August to anyone in need of real experts”

– Mika Toikka, EVP Commercial Operations, VTT