Pricing strategy for industrial and chemicals businesses
Raw material and energy costs that move faster than price lists, and technical service given away rather than priced. We set the cost pass-through rules, price floors and service charges that keep price in step with cost.
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Why industrial prices fall behind cost
A business that customers value for more than price, paid as if it were a commodity supplier. Four causes recur.
Cost recovery that lags
Increases passed through late or only in part, so the business carries the input cost for a quarter or more before price catches up.
Special prices that build up
Overrides and special prices added account by account, never reviewed, until the price list describes very few of the prices customers pay.
Services given away
Technical support, small orders, urgent delivery and application advice supplied free, though customers would pay for them.
A commodity mindset
Sales teams that treat the product as a commodity despite real differences. Staff in our diagnostics raise it in their own words.
How we help
Diagnose
Price realisation against input costs by product family, the spread of special prices by account, and the services supplied without charge, with ranked quick wins starting in month one.
9PE Pricing DiagnosticOptimise
Cost pass-through rules, including surcharges, index-linked pricing and price resets by segment, with price floors that cut ad hoc overrides without losing the accounts that matter.
Project BlackbirdEmbed
Charges for the services customers value, approval limits, and sales training to put a dollar figure on value beyond price in key-account negotiations.
Pricing Capability & GovernanceOur industrial work covers coatings, plastics and PVC compounds, security and door hardware, and industrial suppliers.
Questions we answer for industrial and chemicals businesses
How do we respond to raw material cost inflation with price?
Decide the recovery rule before the next cost movement, not after it. Each product family gets a pass-through mechanism, a trigger and a timing rule, so increases go out on a schedule customers can plan around rather than after a quarter of absorbed cost.
Should we use a surcharge or a price increase?
A surcharge suits an input cost that moves both ways, because it can come off when the cost falls. A permanent cost rise belongs in the list price. Index-linked pricing suits contracts where both parties accept a published index as the reference.
How do we charge for technical service, small orders and urgent delivery?
List the services you supply, what each costs to deliver and which customers use them most. Charges are set for the services customers value and use unevenly, and included in the price for those that every customer uses.
How do we win a better price from a dominant customer?
Put a figure on the value you supply beyond the product: supply security, technical support, consistency of quality. RBM Plastics, an Australian PVC compound manufacturer, secured higher prices and larger volume commitments from a key customer this way.
How do we clear special prices that have built up account by account?
Review each special price against a floor and a stated reason, expire those that no longer have one, and route new requests through an approval limit. Allegion identified A$3.8m–6.5m of EBIT gain through override control, a pricing reset and clear channel rules.
How does an engagement start?
With the 9PE Pricing Diagnostic, an 8 to 12 week review that sizes the margin opportunity in A$, scores pricing capability and delivers ranked quick wins. Price optimisation, governance and training follow where the diagnostic shows the return.
Why a pricing specialist rather than a global firm
Method from 160+ engagements
Built since 2007, including industrial work for Axalta, RBM Plastics and Allegion.
Senior people throughout
Ron Wood leads every engagement with a senior associate. The work is not sold by a partner and handed to a junior team.
Fixed fees
The fee is agreed before the work starts, and the risk of overrun sits with us.
Results published by name
Each result on this page comes from a named client and carries its label: realised, modelled or identified.
Industrial and chemicals case studies
Realised: measured after implementation. Identified: annualised opportunity sized in the diagnostic, before implementation.
Higher prices and larger volume commitments from a key customer, by quantifying value beyond price.
Margin recovery through discount control, service charges and SKU repricing across a regional coatings business.
EBIT gain through override control, a pricing reset and clear channel rules.
Talk through your last cost increase
A 30-minute call with Ron Wood on how quickly price follows cost in your business, and where the first gains are likely to be.
Let’s work together
Whether you're ready to optimise your pricing or want to explore what's possible, we'd love to hear from you.