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Delivering a value based CPI of over $4.5m

Context 

Our client hadn’t managed to secure a CPI for 5 years. There was a lack in confidence throughout the team and nervousness around whether they could deliver. Within the market place there was little inflation in this fashion driven category, and there were serious issues with deflationary pricing. Our plan of action needed to build commercial capability, give confidence to the SLT and enable them to realise their first CPI. 

 

Approach  

The negotiation capability of the account team was improved through a series of workshops, followed by a robust embedding programme including regular TNG coaching sessions to apply learnings and change behaviour. This was supplemented by supporting the team leaders through our customer account planning programme, a selection of detailed customer planning sessions to create robust, customer-centric plans. Our experts also ran virtual CPI focused capability programmes tailored to the client’s negotiation. Internal alignment is vital to the success of any negotiation, our support ensured the client gained full executive alignment on the plan, methodology and strategy to be used within the negotiation. We lead a dynamic engagement plan involving twice-weekly sessions with the client to ensure fluidity of messaging, sharing of learnings and consistency of approach. This was called out as one of the key success factors. 

 

Outcomes

A ‘science led’ strategy that demonstrated in-depth category and brand pricing responses, by category, which in turn created a bedrock from which to tell a confident selling story that centred around creating value, not complexity nor cost. The customer planning sessions resulted in clear, structured operational plans that the customer leads used to work through the complex negotiations and challenging discussions. The customer teams successfully negotiated away undesirable requests from the retailers. They over-delivered on the plan and secured agreement for other value-adding variables. The clear, strategic approach enabled the client to avoid scrutiny from procurement departments, avoiding unnecessary delays. Early agreements were reached with several retailers. The client achieved a cost price movement returning $4.5m-$7m, which was DOUBLE the essential position. As a result of this success, the client will implement a further price movement in July 2022 with TNG support. 

 

Objectives 

The client wanted to deliver a CPI across multiple categories We aimed to create a non-commodity-based story for the first time by aiming to focus on value creation with the clients customers, in order to highlight the category opportunity.

 

Hiring TNG has been the singular best decision that I have made in this job and the most impactful. We now have above $4.5m of value created that we did not have before. 

This is the biggest CPI in almost 10 years that we have implemented but it has been the smoothest. The weekly discipline instilled with our calls with Total Negotiation Group really helped. We got into a rhythm that brought rigour and consistency to the process and it forced us to find the time to fully prepare. Having the courage to challenge internal alignment and ensure that we had the backing of our Leadership really inspired the team.

About the author

Total Negotiation Group