Win the deal. Keep the margin.
Costs often move faster than price lists. Vadar Alpha helps sales set a target price for each product and customer, based on today's costs and your chance of winning. It also shows where margin slips after the sale.
Many price lists are reviewed once or twice a year, while material costs can change by the day. In between, margin slips away one quote at a time. A cost increase can take months to reach price, and the loss often shows only when the quarter closes.
When each customer gets the same list price, some deals leave money on the table and others are lost.
A cost increase can reach your price list months after it reaches your plant.
Rebates, freight, payment terms and customer deductions take margin that the quote never showed.
Vadar Alpha tracks what each product costs to make and deliver today, and moves its target price with that cost. When a price drifts from its target, sales gets an instruction: the margin at stake, and how far sales can fall before the change stops paying.
| Cost to make | Price, set quarterly | Price with Vadar Alpha | |
|---|---|---|---|
| Jan | $0.74 | $0.92 | $0.92 |
| Feb | $0.75 | $0.92 | $0.93 |
| Mar | $0.78 | $0.92 | $0.96 |
| Apr | $0.81 | $0.94 | $0.99 |
| May | $0.83 | $0.94 | $1.01 |
| Jun | $0.82 | $0.94 | $1.00 |
| Jul | $0.80 | $0.97 | $0.98 |
| Aug | $0.82 | $0.97 | $1.00 |
| Sep | $0.85 | $0.97 | $1.03 |
| Oct | $0.87 | $0.99 | $1.05 |
| Nov | $0.86 | $0.99 | $1.04 |
| Dec | $0.84 | $0.99 | $1.02 |
We read your price lists, quotes, contracts and product costs from your ERP and sales tools.
Each product and customer gets a target price that earns the most margin at today's costs. A floor sits beneath it, with the reason for each.
Sales gets guidance on each price. We track the price collected and the win rate against the agreed baseline.
| Without | With Vadar Alpha | |
|---|---|---|
| Key accounts | 94% | 97% |
| Distributors | 91% | 95% |
| Spot quotes | 88% | 94% |
Price realization and win rate are tracked together, so a higher price that loses the deal shows up as clearly as one that wins it. Sales keeps the customer and the decision.
Pricing for manufacturers is a race between costs that change daily and prices that change a few times a year. Here is where margin leaks, and how to close each gap.
Margin leakage is the gap between the margin a price was meant to earn and the margin it actually earns. It comes from late cost pass-through, discounts granted without a margin check, rebates and surcharges that are never applied, and floor prices built on old costs. Each leak is small. Together they can erase a year's price increase.
Raw material costs hit the income statement within weeks, but price increases often wait for a review cycle, a notice period and a customer conversation. During a notice period, customers may also buy ahead at the old price. Vadar Alpha shows how far cost has moved for each product, so the conversation starts when the cost moves, not a quarter later.
A target price is the price that earns the most margin at today's cost, given what each segment has been willing to pay. A floor is the lowest price at which a deal still earns its target margin. Vadar Alpha recalculates both from live costs and win rates, so a sales rep can see, inside the quote, how far a discount can go and still pay.
Raising a price is easy to measure. Losing the volume that went with it is not. Vadar Alpha tracks net price realization and win rate by segment, so each pricing decision is judged on margin dollars, not on price alone.
Every decision arrives as a plain instruction, with the dollars at stake, the reason, and the point at which it stops paying.
Measured asVadar Alpha looks at what each product costs to make and deliver today, and at past quotes to see how often you win at each price. The target is the price that earns the most margin once both are counted. A floor beneath it shows how far a discount can go and still earn its margin.
By knowing, product by product, how far cost has moved since the price was set, and acting before the gap grows. Vadar Alpha tracks that gap, sets a target price for each product, and shows sales which prices to move first.
The share of the list or target price you actually collect, after discounts, rebates and other concessions. Vadar Alpha tracks it with win rate, so you can see both the prices that win and the prices that lose.
No. It gives your pricing and sales teams a target, a floor and the reason for each, in the tools they already use. People still own the customer and the decision.
On paper a lemonade stand is two numbers: what a cup costs and what it sells for. Run one for a summer and neither number holds still, demand swings with the weather, and you are buying lemons today for a crowd that shows up tomorrow. A follow up on the hard part, and a calm way to handle it.
Bill Ackman modeled a lemonade stand to teach finance, and held the two hardest numbers still: what the lemons cost and what a cup sells for. In the businesses that make and move the physical world, those are the numbers that never sit still. A note on why Buy, Sell, and Risk are one income statement, not three departments.
A 30 minute conversation to see where your margin leaks and whether we can help.
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