Client Overview

Industry: Building Materials – Thermal and acoustic insulation for residential, commercial, and industrial construction

Business Size: National supplier across Australia with multi-channel distribution (direct-to-trade, wholesalers, project builders)

Client Context: Fletcher Insulation is a leading brand in the Australian construction and materials market, but years of flat price increases, cost-plus pricing practices, and inconsistent sales execution had caused systemic margin erosion. With a large SKU range and a broad customer base, pricing outcomes were driven more by legacy norms than strategic intent—putting pressure on earnings, internal alignment, and pricing confidence.

Challenge / Problem

Symptoms Observed:

• Gross margins under pressure from unmanaged discounting and reactive pricing
• Sales teams lacked commercial pricing tools and used flat percentage discounts frequently
• ERP pricing logic buried in complex systems, limiting transparency and ownership
• Central management lacked real-time visibility into pricing performance or override behaviour
• Limited understanding of how value differed across customer types, segments, or applications

Strategic Impact:

• Inconsistent pricing across states and customers with similar profiles
• Undifferentiated price offers for customers receiving vastly different levels of service and delivery performance
• Margin decisions made without clear cost recovery thresholds or contribution margin logic
• EBIT leakage estimated in the range of $5M–$10M across the national business

Internal Commentary:

“We are well-known in the market and respected, but our pricing doesn’t reflect that. We’re pricing like a generic commodity—and it’s costing us margin.”

Objectives of the Engagement

• Identify pricing operations risks across the commercial process
• Create internal alignment on pricing strategy, value creation, and deal governance
• Build capability across sales, marketing, and finance teams in pricing execution
• Recommend structure and process changes to lift margin performance
• Establish pricing confidence and discipline across all frontline teams

Our Approach

Phase 1: Pricing Diagnostic Survey

• Assessed pricing maturity across 3 pillars: Value, People, and Structures
• Scored Fletcher Insulation at an average of 59% capability, with major gaps in pricing governance, sales execution, and strategy alignment

Phase 2: Technical Capability Assessment

• Conducted a pricing skills quiz across teams—result: an average score of 45%, highlighting urgent need for training on pricing maths, margin impact, and quote modelling

Phase 3: Strategy Workshop and Priority Planning

• Used the Pricing Insight diagnostic canvas to visualise margin risks and capability gaps
• Identified quick wins in freight cost recovery, override thresholds, and quote guidance
• Initiated education rollout through the Pricing University curriculum

Key Issues Identified

• Strategy & Market Position
  No clear pricing strategy beyond cost-plus; no segment-specific approach
• Customer Value
  Value drivers not formally identified or priced into offers (e.g. lead time, delivery, tech support)
• Sales & Negotiation
  Heavy reliance on instinct, with low technical understanding of pricing maths
• Cost-Plus Pricing Legacy
  Applied uniformly without regard to segment, volume, or service differences
• Discounting Controls
  Override logic unclear; managers approve without visibility into margin impact
• Management Alignment
  Agreement that pricing is critical, but lacked a shared framework or ownership
• Analytics & Tools
  Weak data extraction, minimal segmentation logic, no quoting playbooks or tiered pricing models

Key Actions Taken

1. Diagnostic Capability Mapping
   Visualised pricing capability and gaps across teams and functional groups
2. Sales Training Rollout
   Introduced Pricing University modules focused on pricing maths, discounting, and price defence
3. Pricing Governance Recommendations
   Designed discount escalation matrix and pricing playbook for account teams
4. Quick Win Implementation
   Freight cost recovery, SKU margin banding, and margin alert dashboards
5. Management Alignment Program
   Conducted workshops to align sales, marketing, and finance leaders on strategic pricing priorities

Results Achieved (Within 12 Weeks)

1. EBIT Margin Opportunity Identified
   $5M–$10M EBIT improvement opportunity across segments
2. Override Reduction Forecast
   40–60% expected drop in discount overrides with new policy and controls
3. Technical Pricing Confidence Lift
   Pricing quiz scores improved post-training; sales teams reported increased confidence quoting
4. Customer Value Playbooks Delivered
   Introduced value canvases by segment to support sales positioning
5. Internal Alignment Achieved
   Senior teams aligned on pricing ambition and roadmap for margin improvement

Client Feedback

“This program gave us structure and visibility. Before Pricing Insight, pricing was managed in fragments. Now, we have a unified direction and the tools to protect our margin.”
— Commercial Director, Fletcher Insulation

What This Means for Similar Companies

In building materials and industrial manufacturing, price drift is often a cultural and structural issue. Fletcher Insulation’s experience shows that with the right diagnostic, training, and process redesign, substantial margin recovery is possible—without sacrificing growth or customer satisfaction. The key is aligning your pricing approach with your value proposition and giving your team the confidence to hold the line.