HVAC and Plumbing Distributor

Company Background

A North American HVAC and Plumbing Distributor with a rich history of service to the building community. The company recently standardized pricing methods across the organization with White Cup Pricing, which has had a measurable impact on margins and improved overall efficiency and results.

Looking a Few Years Back

When their current Corporate Pricing Manager took over their position for the company a few years ago, this area needed a lot of attention. Previously, there had not been one specific person in charge of pricing, and the company had grown over many years and expanded to nearly 30 locations. There was an extensive set of matrices, customer and product price types created and used by staff. Yet, no one was responsible for monitoring and managing the pricing information and data.

Due to a lack of centralized pricing control and management over so many years, the distributor had created over 211 different customer price types, many of which had no end date. Determining which price records were active and legitimate proved challenging. They had over 100 people who could create and change records without standard pricing procedures or compliance requirements.

Getting Organized with White Cup Pricing

The company’s leadership knew that something needed to change to improve their pricing approach and gain more control of their processes and methods, especially with continued growth and expansion.

They turned to White Cup Pricing, powered by epaCUBE, to improve their pricing strategy. White Cup Pricing is a cloud-based software with fast track implementation, expert advisory services, and built-in pricing and profit plays. Overall, White Cup users see 450 or more basis points of gross profit margin improvement through better pricing, easy-to-manage customer and product segmentation, and an industry-leading performance scorecard.

When the distributor brought in White Cup Pricing, the Corporate Pricing Manager immediately assembled a team of key people that looked at historical price data. Because previous pricing teams had not well managed the matrices through the years, a high percentage of the pricing records were no longer valid or competitive.

By implementing White Cup Pricing, they reduced the number of customer price segments to 10 from 211, allowing the organization to focus on a shortlist of accurate and effective matrices and options.

Implementing and establishing a true global matrix that everyone agreed to was only the first step into the new approach to pricing at the company. After so many years of mismanaged matrices, the Corporate Pricing Manager had some work to do in asking the order writers and sales team to trust the pricing guidance produced from the new system. For the first time, the pricing team utilized actual data to explain and support decisions on what to charge their customers, but it was apparent this would not happen overnight. However, progress was made thanks to the software’s effectiveness and partnership with White Cup, and the results were evident almost immediately.

Making the Change to a Data-Driven Pricing Culture

The company did not switch to a software-based pricing methodology with the White Cup system overnight. The process happened incrementally; understandable for a company that had years of making decisions from gut feel, previous price quotes, and customer relationships.

“A key part of my responsibility in this new role was to reach out to all the locations and personnel in our organization to hold conversations around this important culture change,” says the Corporate Pricing Manager, “everyone had been making their own price decisions for so long that we had to explain and prove to them that the new data-driven approach could be trusted and relied on to deliver improved results.” The most significant impact occurred when the sales team taking orders began to completely accept and follow the information that the system would now provide.

The Corporate Pricing Manager used several different methods for communication and training during the rollout of White Cup Pricing to the decentralized company operation. When asked about how they did it, she commented, “we used webinars, demonstrations of the software, and on-site meetings. It was a challenging time for us but well worth the effort, based on the results we have delivered from this change.”

Overrides Were a Huge Challenge

Another issue the distributor addressed as they rolled out White Cup Pricing was to take on the considerable challenge of addressing and improving upon overrides. When they implemented the White Cup solution, they experienced an immediate decrease in the percentage of overrides. After some time using the system, overrides fell by over 50 percent. The software immediately provided a tool for the pricing team to demonstrate how minor price overrides and adjustments can harm the margin and bottom line. The Corporate Pricing Manager mentions that “our employees were stunned to see what can happen to profit margins by following the guidance the White Cup Pricing system would provide, with the optimal price that they should charge for each customer quote.”

The White Cup Performance Scorecard Tracks Actual Results

The Corporate Pricing Manager made it clear that “the performance scorecard is a key aspect of the software. It has been a great tool to show our CEO and management team the impact of the changes we have made in our pricing matrix.” she continues, “before this, we had no way to show our leadership what was happening with pricing. The scorecard is a clear, precise, excellent tool that provides a set of data that is an excellent executive overview which summarizes our progress and results.”

The White Cup Pricing scorecard utilizes a robust set of graphs and presents essential data for review in an easily viewed and analyzed style. Customers are thrilled with crystal clear, upfront filters, so they can view overrides, the performance of recent weeks, and compare results of different sets of changes.

Historically, measuring ROI related to software purchases can be challenging. That is not the case with the White Cup solution. The company recorded a significant positive impact on margins in less than a year based on implementing White Cup Pricing.

White Cup Customer Support and Expertise Ensures Success

The Corporate Pricing Manager also really appreciates the level of support and industry-specific expertise provided to the company from the support and services teams of epaCUBE, White Cup’s partner. On this topic, she comments, “as we worked through our implementation of the pricing solution, epaCUBE grew right along with us. They have continued to improve and add to their customer support. The knowledge and real-world advice they have provided on how to maximize the solution and drive results has been invaluable.” She goes on to say, “We all hear many stories about software solutions being dropped into companies, and then the solution provider disappears. That is absolutely not the case with epaCUBE and our experience. They have been there for us each step of the way.”

Price Optimization Provides Value Through Difficult Time in the World

The team also points out how important White Cup Pricing has been to the organization during a very challenging time for the industry and businesses around the country during the COVID-19 pandemic. Since the distributor had implemented the price optimization solution before the pandemic hit the world, the company was well-positioned to handle pricing seamlessly in a remote workforce environment. Of the many issues that needed attention during such a difficult time, accurate and effective pricing was not a stress point, thanks to White Cup. To support this point, the Corporate Pricing Manager commented. “We have not missed a beat during this time of uncertainty and challenges due to the COVID-19 pandemic. We have continued to work with White Cup seamlessly and continue to improve our margins, which as a result, has had a positive impact on our bottom line.”

Looking Ahead at the Future with White Cup Pricing and Pricing Optimization

Having access to analytical data through White Cup Pricing to support both the company and outside sales team’s success is invaluable. Working directly with a sales manager or outside sales team to provide information and guidance in their pricing decisions is very rewarding. The scorecard provides an executive overview that is precise and easy to interpret.

When asked to summarize the current state and to look forward, the Corporate Pricing Manager shared several thoughts, “We recently added segment optimizer, and we are currently focusing on our HVAC customer segments. Utilizing White Cup Pricing and segment optimizer provides us with effective tools that will undoubtedly result in continued success in customer relationships, sales growth, and margin performance. We can now take a granular approach to our business model and specialize in all of our markets. Being relative in the market with pricing and having the resources to pull data to support these decisions puts us in the driver’s seat. epaCUBE’s support and services teams have provided the expertise we need to make profitable decisions. I appreciate that they are always accessible to jump on a call. The attentiveness to our individual business is unmatchable. As we come to the end of a very challenging year, I am excited to see the successes for our company with the support of White Cup Pricing.”