Pricing and Bundling of a Complex B2B Service Offering
An HR and payroll outsourcing company
A leading HR and Payroll outsourcing company wanted to optimize its pricing and product bundling scheme to maximize revenue while still simplifying its product offering. Prior to our study, the client had a complex offering, with thousands of possible permutations of how products could be bundled together.
Through advanced choice modeling and optimization techniques, RSG determined customer preference for various products and bundles, as well as sensitivity to pricing for the various bundle components. RSG also segmented the customer base to determine which segments were primed for targeting and new product offerings.
RSG found that the client could not reach its aggressive market share goal without winning a large percentage of small businesses. While rivals were aggressively targeting this segment with discounts, RSG recommended a plan by which select discounts to small businesses would allow the client to reach its market share target while hurting aggressive competitors.
Ultimately, RSG identified a plan in which the client could increase market share by 20%, while reducing their product line from 36 to 10-15 products. The product recommendation included a combination of a few standalone products along with several bundled offerings. The pricing recommendations took into account price elasticities which RSG modeled.