Pricing Due Diligence
At 4D Due Diligence, we excel in conducting meticulous pricing evaluations to empower our clients with the critical insights needed for informed investment decisions. Our Pricing Due Diligence services delve into every facet of pricing strategies, competitive positioning, and market trends, ensuring a comprehensive analysis that supports optimal decision-making. We assess the pricing models, revenue streams, and profitability potential of target companies, providing a clear and detailed understanding of their financial viability and strategic fit.
What is pricing due diligence?
Pricing due diligence helps company leaders, product managers and investors understand competitor and peer company’s pricing. Pricing due diligence sets out to understand how a competitor’s pricing model is costed, calculated, and presented to its customers. This is particularly important in complex markets such as SaaS technology companies, or where companies have customized pricing for enterprise clients. Because enterprise and SaaS pricing is often very opaque or undisclosed on a company’s website, it is hard for companies to understand how a particular customer structures its pricing, and what is included in this solution.
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Why do companies conduct pricing due diligence?
Pricing Due Diligence is useful for companies to remain competitive against other companies in their market or niche offering similar services. This helps them:
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Win more sales: Understanding how peer companies structure their offerings means that they know what competitors offer when pitching to clients. This means they can offer more competitive pricing for certain products or solutions meaning they are more likely to win sales
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Reveal opportunities for increased revenues: Knowing exactly what peer companies charge, and for what, often reveals areas that a company may be undercharging for or not be charging for at all. This means a company that has conducted proper due diligence can charge appropriately for all of its services, increase revenues and leave nothing on the table
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Maintain profits: By knowing how competitors structure their offerings, this allows greater insight into their margins. These implications can the company conducting due diligence review their operations, appropriately cost in their margins, and defend their profits.
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How can 4D help with Pricing Due Diligence?
We help companies and investors gain concrete insights into pricing due diligence:
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Remove guess-work and time spent modeling or estimating: Custom and enterprise customer models are almost never advertised, meaning that competitors and investors have to guess or attempt to model what their peers are pricing. Our approach finds the exact pricing structure as presented to the client, so no guess work is involved.
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Reduce trial and error in pitching: Finding out that a company has been under-cut or outbid during a tender or that a customer has simply gone elsewhere is a poor way to find out the pricing is wrong. We find out peer companies' exact model - what they charge, for what, how much add-ons cost, how they calculate this, and how it is scaled so our clients can create better models of their own.
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Increase revenues and profitability: Knowing how a competitor structures their offering behind the scenes, which elements they place higher prices or add more value on, and how they cost in their margin allows our clients to make more sales, increase revenues, and maximize profits.
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We have helped many companies increase sales, revenues, and profits through our pricing insights, take a look at some of our case studies to find out how:
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Interested in learning more about how our Pricing Due Diligence services can help your organization? Contact us today to schedule a consultation and discover how we can support your strategic objectives.