1. 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.

2. 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.”

3. 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

4. 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

5. Key Issues Identified

Area of Focus

Observations

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

6. Key Actions Taken

Strategic Lever

Description

Diagnostic Capability Mapping

Visualised pricing capability and gaps across teams and functional groups

Sales Training Rollout

Introduced Pricing University modules focused on pricing maths, discounting, and price defence

Pricing Governance Recommendations

Designed discount escalation matrix and pricing playbook for account teams

Quick Win Implementation

Freight cost recovery, SKU margin banding, and margin alert dashboards

Management Alignment Program

Conducted workshops to align sales, marketing, and finance leaders on strategic pricing priorities

7. Results Achieved (Within 12 Weeks)

Outcome

Impact

EBIT Margin Opportunity Identified

$5M–$10M EBIT improvement opportunity across segments

Override Reduction Forecast

40–60% expected drop in discount overrides with new policy and controls

Technical Pricing Confidence Lift

Pricing quiz scores improved post-training; sales teams reported increased confidence quoting

Customer Value Playbooks Delivered

Introduced value canvases by segment to support sales positioning

Internal Alignment Achieved

Senior teams aligned on pricing ambition and roadmap for margin improvement

8. 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

9. 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.