Fletcher Insulation: A$5m–10m EBIT Opportunity

Case study summary

Fletcher Insulation makes thermal and acoustic insulation for walls, ceilings and other building applications. Pricing Insight assessed the business’s pricing capability and set priorities for its pricing structure, discount discipline and commercial education. The work identified an EBIT improvement opportunity of A$5m to A$10m. This is an identified opportunity, sized before implementation, and is not reported as a realised gain.

Results at a glance

Client: Fletcher Insulation, building materials.
Result type: Identified opportunity.
EBIT opportunity: A$5m–10m.
Work delivered: capability diagnostic, technical pricing assessment, strategy workshops, Pricing University education, customer-value tools, discount-control designs and a prioritised roadmap.
Discount overrides: forecast to fall 40–60%. This is a forecast, not a measured result.

What pricing challenge did the business face?

Price increases went out as flat percentages, discounts were given at the discretion of individual sellers, and complex system pricing made it hard to see how products and customer needs differed. Insulation is often compared on a square-metre rate, but manufacturing, distribution and technical support make product and service requirements differ well beyond that rate.

Teams needed three things: clearer methods for setting prices, a stronger technical understanding of the products they price, and visibility of override decisions.

What did Pricing Insight do?

Capability diagnostic. An assessment of the business’s pricing capability.
Technical pricing assessment. A review of how differences between products and customer needs were reflected in price.
Strategy workshops. Workshops to agree pricing priorities.
Pricing University education. Structured pricing education for the commercial team.
Customer-value tools and discount-control designs. Tools to support pricing execution, and designs for controlling discounts and overrides.
Prioritised roadmap. The sequence of improvements to make.

What was identified?

The engagement identified A$5m to A$10m of EBIT opportunity. Discount overrides are forecast to fall 40–60%. Qualitative improvements in team confidence are not counted as profit.

How the figures are reported

Pricing Insight labels every published result as realised, modelled or identified. This result is identified: the opportunity was sized in the diagnostic, before implementation. No realised EBIT reconciliation has been published for this engagement.

Pricing Periodic Table elements

Three elements of the Pricing Periodic Table describe the work: Price-setting method (Md), Commercial numeracy (Nu) and Discount authority and controls (Da).