‍STRATEGIC PRICE OPTIMISATION TO DRIVE IMMEDIATE EARNINGS GROWTH

For many businesses, pricing is an overlooked but critical element of profitability and long-term financial health. In competitive markets, margin erosion, inconsistent discounting, and revenue volatility can quickly undermine growth and earnings stability.

Traditional pricing models often apply cost-plus methodologies or broad price increases that fail to account for specific product and customer dynamics. This results in suboptimal price realisation, lost revenue opportunities, and increased exposure to competitive pressure.

Project Blackbird is a structured, data-driven solution to these challenges.

By applying value-based, algorithmic price optimisation, organisations can align pricing with actual market demand and customer value perception, ensuring sustainable margin growth and earnings certainty.

KEY OBJECTIVES AND OUTCOMES

Project Blackbird provides a systematic approach to price optimisation, ensuring that businesses can implement targeted price adjustments that drive profitability while maintaining customer confidence.

Core Objectives:

• Establish a structured and disciplined approach to pricing strategy.
• Minimise margin erosion by reducing unnecessary discounting.
• Improve earnings predictability through intelligent price modelling.
• Align pricing with customer value perception to support long-term retention.
• Enhance negotiation confidence for sales teams by providing clear price structures.

Expected Outcomes:

• $2M to $9M in additional EBIT per $100M of revenue optimised.
• 200 to 900 basis points of margin expansion.
• A structured price architecture that reduces complexity and risk.
• More effective price governance, enhancing strategic oversight.

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CASE STUDIES: DEMONSTRATED SUCCESS

Corporate Stationery & Office Supplies
Context: A corporate stationery supplier with $1B in revenue implemented a new ERP system while facing 1.5% margin contraction despite revenue growth. Pricing inconsistencies resulted in lost revenue opportunities and widespread discounting.
Implementation: A pricing algorithm was introduced, refining SKU- and customer-level price structures across 5,000 products.
Outcome: $6.3M in additional EBIT within 12 months, equating to a 740 basis point margin expansion.

Building Materials (ASX-Listed)
Context: A national building materials company faced margin compression due to competitor discounting and inventory imbalances. Stockouts of high-demand SKUs forced reliance on discounting, impacting overall profitability.
Implementation: A stock-to-sales pricing model was developed to ensure that price adjustments optimised both inventory turnover and profitability.
Outcome: $2.7M in EBIT gains within the first year, with additional improvements as the model was refined.

Healthcare Consumables Distribution
Context: A UK-based distributor relied on cost-plus pricing, leaving significant margin opportunities untapped across 250 product subcategories.
Implementation: A customised pricing algorithm was introduced, refining discount structures and improving pricing discipline.
Outcome: $1.6M in additional EBIT, equating to an 800 basis point margin expansion within 12 months.

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IMPLEMENTATION FRAMEWORK

Project Blackbird follows a five-step implementation process, designed to integrate seamlessly with existing business operations while minimising risk and disruption.

1. Diagnostic Analysis

A detailed evaluation of current pricing structures, SKU- and customer-level pricing, and discount frameworks to identify potential EBIT gains. This includes:

• A full pricing architecture assessment.
• Identification of margin improvement opportunities.
• Review of customer price elasticity and market response data.

2. Price Architecture Development

Structured SKU- and customer-level price optimisation modelling is developed, ensuring pricing aligns with market demand and value perception. Key activities include:

• Establishing value-based price tiers.
• Defining optimised discount structures.
• Developing a scalable framework for ongoing adjustments.

3. Pilot Testing

A controlled implementation phase is conducted to validate the pricing model and measure its effectiveness. This stage includes:

• A targeted rollout across a selected product range.
• Monitoring real-world customer responses.
• Refining the algorithm based on feedback and observed performance.

4. Full Deployment

A company-wide implementation of the optimised pricing model, ensuring seamless adoption. Key elements include:

• Training sales and pricing teams to apply the new structure.
• System integration with existing ERP and CRM platforms.
• Ongoing monitoring and reporting to track early-stage results.

5. Margin Expansion Accelerator

Beyond initial deployment, an additional phase focuses on long-term margin expansion. This includes:

• Advanced pricing capabilities to further optimise revenue streams.
• Implementation of risk-mitigation strategies to protect against future margin erosion.
• Regular performance reviews and refinements to ensure continued earnings growth.

GOVERNANCE AND RISK MANAGEMENT

A core advantage of Project Blackbird is its structured approach to governance and risk mitigation. By employing algorithmic modelling, pricing risks are identified and managed proactively, ensuring the long-term sustainability of margin expansion initiatives.

Key Governance Elements:

• Executive-Level Oversight: Clear accountability and reporting frameworks for pricing decisions.
• Scenario Modelling: Pricing simulations that test potential margin impacts before implementation.
• Performance Tracking: Post-deployment reviews to assess effectiveness and refine strategies.

Mitigating Risks:

• Structured Implementation: Ensures that price changes are introduced gradually and with minimal disruption.
• Customer Communication Strategies: Maintains transparency and alignment with customer expectations.
• Ongoing Data Validation: Continuous assessment of market conditions to avoid unnecessary volatility.

STRATEGIC PRICING FOR SUSTAINABLE GROWTH

In an environment where pricing power is a critical determinant of earnings stability, Project Blackbird provides a proven, data-driven framework for optimising pricing decisions. By leveraging algorithmic modelling, companies can enhance profitability, reduce margin risk, and improve governance around pricing strategy.

Why Project Blackbird?

• Proven financial impact – Clients typically achieve 300%–800% IRR over a two-year period.
• Structured, low-risk implementation – Ensures smooth transition and minimised business disruption.
• Confidential and secure – Data remains fully under client control, with stringent governance safeguards