During the diligence window, savvy investors are increasingly seeking early signals on the pricing opportunity – for both valuation and value gen considerations. Gaining an understanding of the pricing opportunity starts with a walk-through of multiple pricing factors. Chief among the various diagnostics is the pricing waterfall - the walk-down from list to pocket price, and identification of what leakage (opportunity!) exists along the way.

It’s likely that if you don’t prioritize an assessment of the pricing opportunity during the diligence window, you won’t prioritize pricing during the 100-day plan. Given the impact that pricing optimization has on the bottom line, this can be a very costly delay.

In this video, Jeff Merkle discusses how to gain momentum early around pricing opportunities. A few key takeaways:

• Increase your focus on price in the CDD mandate. Expect your diligence provider to bring more to the table and get very granular in the analysis
• Get a handle on price sensitivity – be able to pressure test it
• Understand customer expectations

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