HVG: pricing capability built across 14 managers in a five-division building products group

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Source: Pricing University enrolment, progress reports and correspondence with HVG, June 2021 to April 2022; Project Blackbird due diligence, October to November 2016.

Fourteen managers, one program. In August 2021 Bruce Rayment, Chief Executive Officer of Halifax Vogel Group (HVG), enrolled 14 managers from across the group in Pricing University's Pricing Fundamentals, the online program whose lessons run from value pricing (Lesson 1) to pricing psychology and negotiation tactics (Lesson 11). By February 2022, eight had completed the program, and the CEO and Pricing Insight had agreed that it was not relevant to some of the remaining roles. The result is pricing capability rather than a measured margin figure: the general managers of HVG Facades and HVG Graphics Media each asked for a session built on the course for their own sales teams, and the CEO set out the three pricing challenges the group carried into 2022.

01A five-division group with almost no contracted revenue

Five divisions, one price decision at a time. When Ron Wood first met Bruce Rayment at HVG's Turrella site on 13 October 2016, the group had about A$130m of revenue across Alucobond and facades, building products, Smartstone, graphics media and fabrics, with 93 salespeople on the road. Very little of that revenue was contracted. Facade panels were imported from Germany on a fourteen-week lead time and held a leading position in Melbourne; signage substrates came from China and sold into a market that bought on price. As the CEO put it at the time, the only way to make money on the second kind of product was pricing.

The group had grown 15 per cent over the two previous financial years and was 22 per cent up in the first quarter of the new one, with margin about a point below where it had stood two years earlier. Salespeople priced within a range, and the reports showed a 20 per cent spread between the highest and lowest prices for the same products. Mr Rayment had run HVG for fifteen years and said that too many of his people treated low profitability as success, a mindset he wanted to change.

Today the business trades as HVG Decorative Building, supplying decorative interior and exterior building materials and laminated panels to architects, designers and manufacturers across Australia.

02The challenge: hold price against professional buyers while costs move

Two problems, five years apart. In 2016 the question was how much margin the price file was giving away. Pricing Insight ran a Project Blackbird due diligence on the group's SKU data in October and November 2016 and reported an EBIT gain of A$1.0m to A$1.2m in the first year on its most conservative estimate, rising to A$1.4m to A$1.6m in the second year on the pattern of earlier Blackbird programs. A presentation to the senior team was scheduled for December 2016. The CEO deferred implementation through 2017, telling Pricing Insight in August that year that HVG remained interested but not at that stage. The figure stands as an identified opportunity. It was never implemented or measured.

By 2021 the question had changed from the price file to the people. Supplier costs were rising, price offers could only be held for short periods, and professional buyers were working to turn differentiated products into commodities. In April 2022 Mr Rayment set out the group's three pricing challenges in his own words:

Obtaining price rises to offset inventory cost increases, easier than ever before, but still difficult; price volatility from some suppliers, therefore we can only hold price offers for a short period of time; and competitors not following us up as we increase market pricing.

Bruce Rayment, Chief Executive Officer, HVG, 6 April 2022

Each of the three is a negotiation problem before it is a price-list problem. A cost increase is recovered one customer conversation at a time. A short validity window has to be explained and held. A competitor that does not follow a price increase tests whether the sales team can hold its position or will give the increase back. That is the ground Pricing Fundamentals covers.

03What Pricing Insight did

One cohort, run from the top. The CEO asked for the price per learner on a Saturday in June 2021, said he would take it to his management team the following Tuesday, and sent the learner list on 20 August. The program went live the next Monday.

04What changed: two divisions took the course into their own sales conferences

Eight completions from 14 enrolments, and two general managers who wanted more. The clearest evidence that the program took hold is what the divisions did with it. Within three months of going live, the general manager of HVG Facades, Stephen Dorrofield, asked Ron Wood to speak at the division's national conference, with the course as the starting point:

Lesson 11, Pricing Psychology and Negotiation tactics, resonated with my team and myself that did the course. The fact that professional buyers are out there specifically using tactics against us to turn our product into a commodity was interesting. What can we do to counter this.

Stephen Dorrofield, General Manager, HVG Facades, 6 December 2021

HVG Facades was, by his account, enjoying strong revenue growth and meeting its gross profit targets. The brief for the session was narrower and more useful than a general talk on pricing: one core product, priced per square metre, and the question of what the team could do to earn a few more dollars per square metre that would flow to the bottom line. When the session was postponed in January 2022, he wrote that he was looking forward to the interactive way Ron Wood had proposed to show the team how to build value, and that the division still wanted him in.

In July 2022 the general manager of HVG Graphics Media, Richard Lucas, asked for a one- to two-hour session at his own team conference based on the pricing and margin concepts the team had covered in Pricing Fundamentals the year before. Pricing Insight set out four formats, from a self-run session that scores and ranks the learners' own margin ideas to a facilitated value-pricing case study, a keynote with open questions, and a price increase strategy planning session.

One step was missed. The learners' survey responses were not reviewed, classified and turned into an action plan with a named champion while the cohort was live, which is the step that converts the ideas into initiatives. Pricing Insight raised this with the CEO in August 2022 and offered a full-day workshop to do it. No financial result from the program was measured by HVG or reported to Pricing Insight.

05The Pricing Periodic Table elements this work built

Seven elements built, three touched. The Pricing Periodic Table maps 61 elements of pricing capability in nine domains across three pillars: Value, People and Structures. Pricing Fundamentals works on the People pillar. The 2016 due diligence worked on Structures, and stopped at the analysis.

28 Cc, Commercial capability and training and 32 Nu, Commercial numeracy: the course itself, with a test at the end of each lesson. 34 Ng, Negotiation skills, 37 Bt, Buyer and procurement tactics and 38 Pv, Price-increase negotiation: the Lesson 11 material the HVG Facades team singled out, and the three challenges the CEO named in 2022. 01 Vp, Value proposition and 29 Vs, Value selling: Lesson 1 and the value-building session designed for the facades conference. The due diligence touched 50 Md, Price-setting method, 44 Or, Override and discount analysis and 12 Mi, Margin improvement program, and sized the opportunity without building the structures that would hold it.

06Three lessons for a group CEO

The next step for a group in HVG's position is the one the CEO himself described in September 2021: a session with every participant to turn the course into a practical action list, followed by a value-based selling program for the sales teams. Pricing Insight's current education program is set out on the Pricing Masterclass page.

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Figures and quotations in this case study are taken from correspondence between HVG and Pricing Insight between September 2016 and April 2022 and from Pricing University progress reports. The 2016 due diligence estimate was modelled, not implemented. Company description from hvgbuilding.com.au, reviewed 2 November 2026.