Ricoh Australia

Client Overview

Industry: Office Technology and Digital Services – Print, Software, Managed Services

Business Size: ~$200M+ revenue in ANZ with enterprise, government, and SME customers

Location: Headquartered in Sydney with national coverage and reseller network

Client Context: Ricoh delivers capital equipment, managed print services (MPS), and digital workflow solutions. However, its pricing strategy was dominated by legacy cost-plus logic, with inconsistent structures across hardware, services, and software. Deal margin erosion, reactive sales culture, and underdeveloped pricing capabilities were reducing the business’s ability to defend or grow profitably in key sectors.

Challenge / Problem

Symptoms Observed:

• Print pricing relied heavily on FOB cost-plus models with arbitrary mark-ups
• Wide variance in discounting by salesperson, region, and deal type
• Reactive pricing against competitors, particularly in government tenders and ZBA (zero-base accounts)
• Lack of value articulation for digital and professional services; price often defaulted to what procurement dictated
• Outdated and manual CPQ tools requiring excessive rework, approvals, and workarounds

Strategic Impact:

• Capital erosion in contract margins due to underpricing of CPC rates, outdated freight charges, and uncosted services
• Productisation of services weak—reducing perceived value and willingness to pay
• Sales teams lacked technical pricing understanding; discounts applied to gain deals without visibility into profitability

Internal Viewpoint:

“The CPQ system is slow, inconsistent, and creates room for workarounds. We rely on discounts to close—especially against procurement. But we don't track the long-term cost or value of the deals.”

Objectives of the Engagement

• Surface and address root causes of margin erosion across print, service, and software offers
• Develop value-based pricing structures across all solution lines
• Establish disciplined deal governance, sign-off frameworks, and pricing policy aligned to customer types
• Upskill teams in pricing economics, negotiation, and contract value communication
• Improve systems (CPQ), approval workflow, and margin visibility per quote

Our Approach

Phase 1: Capability Diagnostic

• Deployed Pricing Insight’s 54-question pricing diagnostic across sales, marketing, product, and leadership
• Diagnostic revealed a capability baseline of 59% across strategy, people, structures, and tools
• Pricing maths quiz showed only 50% of staff could calculate correct margin impact of discounts or markups

Phase 2: Root Cause Analysis & Strategy Workshops

• Identified 10 recurring pricing risks, including inconsistent CPC pricing, lack of service productisation, and poor contract tracking
• Facilitated strategy workshops with ELT and functional leaders to align on pricing ambition, priority areas, and resourcing

Phase 3: Quick Wins and Capability Uplift

• Developed pricing playbooks, quote frameworks, and customer value discovery tools
• Introduced procurement negotiation workshops to shift sales away from reactive discounting
• Rewired CPQ approval flow and initiated redesign of pricing logic rules

Key Actions Taken

1. Value Discovery Methodology
   Created tools and scripts to define and capture customer-specific value across enterprise, gov, and SME segments
2. Price Architecture Redesign
   Replaced flat % markup logic with value-tied pricing for digital services, consulting, and MPS contracts
3. Discount Guardrails & Deal Signoffs
   Introduced structured override tiers, approval matrix, and CPC escalation policy
4. CPQ Process Fixes
   Reduced duplication, clarified approval criteria, and improved master data accuracy
5. Sales Enablement Program
   Delivered pricing literacy, procurement tactics, and negotiation training to sales, product, and service leaders

Results Achieved (Within 10–12 Weeks)

1. EBIT Recovery Opportunity
   $8.7M–$13.5M EBIT improvement opportunity identified across 4 business lines.
2. Quote Process Improvement
   CPQ cycle time reduced by 35%; reduced rework and approval loop fatigue.
3. Discounting Control
   Override volumes projected to drop 50% with new thresholds and accountability.
4. Pricing Confidence in Sales
   Technical quiz scores improved 40% post-training; sales team more confident quoting high-margin offers.
5. Customer Value Communication
   Introduced value-in-use narratives to help sales justify premium pricing in competitive bids.

Client Feedback

“We’ve always believed in the strength of our service and people, but pricing was holding us back. This program helped us see exactly where the money was leaking—and gave us the structure and skills to stop it.”
— GM of Strategy and Planning, Ricoh ANZ

What This Means for Similar Companies

Capital equipment firms stuck in cost-plus or reactive pricing habits often undercharge for their most valuable services. Ricoh’s experience shows that price resets, sales enablement, and operational discipline can recover margin—especially when services, installation, and support are included in value delivery but not priced appropriately.

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