Bundling and Pricing Services to Drive Business Growth
Eversana offers companies in the healthcare industry a comprehensive suite of next-generation solutions that address compliance and regulatory, market access, patient engagement, and channel and logistical operations. One of its platform businesses is a leader in market access intelligence and research for the pharmaceutical and biotech industries. It was facing an increasingly challenging competitive environment. A flood of new entrants had penetrated the marketplace, which served to erode price points, decrease differentiation, and essentially commoditize the syndicated research market for pharmaceutical and biotech companies.
In response to these challenges and threats, the company was seeking to identify a new service delivery model—one which would help transform its offering and relationship with clients from data provider to business consultant. Central to the model was the notion of engaging with clients through a broader “business question” (as opposed to data requirement) lens. Our work centered on identifying a pricing strategy for the new business model that defined the optimal offer configuration and respective price points for service bundles. The optimal solution needed to maximize profitability while simultaneously continuing the business’s historic double-digit topline growth rate.
The FullSurge team began by identifying three distinct hypotheses for pricing strategy. Each hypothesis was consistent with the above-stated goal of increasing profitability while maintaining topline growth, but differed in its approach for doing so. We then worked closely with a quantitative research vendor to design and conduct Adaptive Choice-Based Conjoint (ACBC) research in order to test the validity and appeal of various offer bundles and price points within each pricing strategy hypothesis.
Once the research was complete, a simulator tool was developed that enabled us to run scenarios that measured the purchase intent and associated profitability of various pricing strategies. One of the key findings from the research was the discovery of a “price inelasticity” portion on the demand curve that would enable our client to raise price without a significant hit to overall revenue. Ultimately, our team arrived at a solution, which included detailed recommendations for the optimal: 1) number of pricing tiers, 2) services to be provided for each pricing tier, and 3) price point ranges for each tier. Additionally, we made recommendations for the “a la carte” pricing of services outside of established tiers and strategies for additional bundling and discounting options.
One of the key findings from the research was the discovery of a “price inelasticity” portion on the demand curve that would enable our client to raise price without a significant hit to overall revenue.
The strategic pricing recommendations were presented to the firm’s leadership team during a two-day executive workshop. The recommendations were embraced with minor modifications and launched several weeks later to the company’s national sales force. Since the launch, the company has enjoyed consistent annual growth, attributed in large part to the new pricing model.
FullSurge is a premier consulting firm. Their dedication to truly understand our business objectives enabled us to move forward together to achieve our needs. Their output was actionable, and we adjusted our pricing and packaging because of their great work. This led to an increase in revenue for our company.