How was Philips Healthcare able to create a margin impact of €1mio annually?

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Tobias Happel, Global Pricing Manager with Philips Healthcare will discuss his CPM (Certified Pricing Management) business case during the 5th EPP Life Sciences Pricing Forum on September 22nd 2015 in Montreux, Switzerland.                     

Tobias Happel – Global Pricing Manager – Philips Healthcare

Tobias Happel – Global Pricing Manager – Philips Healthcare

Here is a preview on some answers.

Q Last year you got your CPM certification. How did this training help the company?  Can you share some information on the outcome of the value based pricing project as with regards to the ROI/revenue gained?

Through our business case we created a margin impact of 1 M Euro annually (!). Now we apply the same principles for other value pricing projects which we cannot quantify so far. More information will be shared in my business case on the 5th EPP Life Sciences Pricing Forum, organised in Montreux on September 22nd-23rd, 2015.

Q What are the success criteria of this successful value calculator that is actually and actively being used by sales?

1. Simple – It should be easy for the sales team to use and for the customers to follow. The model has to be so simple that if your sales rep hands it off to a client, they can sit with their internal senior team and walk through the model.
2. Credible – It should use the customer’s own data, and where data isn’t available, suggest value based on similar client scenarios. Remember the earlier example I gave of the sales rep, data credibility is very important. It makes your sales team trust worthy. Instead of using a national average, it is always better to use the customer’s own data.
3. Flexible  – The model should allow for a reasonable amount of tweaking, based on information relative to customer needs. If the client operates on a different cost base than the rest of its peers, the model should be flexible enough to incorporate that information.
4. Involve partners  –  …such as dealers as they are early users which can be used for validation
5. Validate with customers  –  In order to ensure that customers do accept our unique features and are willing to pay a premium for it. Thus a customer survey about our value calculator is extremely helpful.

Q You have been working with Philips Healthcare since 15 years. What is so different in the Life Sciences industry now – compared to when you started working for Philips?

• Competition has changed quite a bit. We are facing much more price sensitive vendors, mainly from Asia.
• Much more focus on offering complete solutions which also requires some project management skills instead of box business
• Customer buying behavior has changed quite a bit – much stronger pressure on their budget. Approver levels also changed, e.g. the CIO and CFO is much more involved instead of the head nurse.

Q How has the function of ‘pricing manager’ evolved during the years?

When I started pricing was very operational à list price management. By now we are much more focusing on Business and country reviews, recently focusing on value based pricing but also solution management. So there is a much stronger emphasis and focus to optimize profitability. We also started a project of looking at different payment solutions such as “pay per use”. So quite a change also requiring different skill sets on pricing managers in our days.

Q What should be the outcome of this forum for you personally?

Of course get some inspiration for my line of work so that I can implement some improvements there. But overall I hope that through our contributions, exchange of ideas and networking that we can grow the pricing community and help them to accelerate and ascend in our organizational structure in our companies.

Interested to join us at the 5th EPP Life Sciences Pricing Forum to discover all about the Philips Healthcare business case and much more? Register now!

We also asked mr. Happel if he would recommend this training to other people.
This was his answer:
Of course.
Want to know more about the CPM training? Click here.

Survey - Twelve Pricing and Profitability Challenges for Life Science Companies – in collaboration with Deloitte

On the Pricing & Profit Optimization Forum on Life Sciences (May 2012) the participants have filled out a survey and now you can see the results on our Participant Only zone of the EPP portal site: http://www.pricingplatform.eu/know-how-center/virtual-library/white-papers.html

In the race to become market leaders, companies have been increasingly prioritizing market share over margin. Without a willingness to truly meet customers’ expectations and without an understanding of their loyalty drivers, a value-based pricing principle cannot be realised.

Our pricing survey highlights 12 challenges on pricing and profitability which life science companies need to address in order to remain competitive.

EPP Pricing & Profit Optimization Forum on Life Sciences

EPP and Model N have organized their 2nd Annual Forum focused on Life Sciences on the 23rd and 24th of May 2012.

The objective of this forum was to provide communication, education and networking opportunities for decision makers engaged in Pricing & Profit Optimization.

Testimonials of the forum on Life Sciences:

Excellent initiative from a learning and networking standpoint

The EPP Pricing and Profit Optimization Conference is an invaluable and unique forum for addressing some of the most essential industry challenges confronting Life Sciences in the Eurozone. Topics such as Reference Pricing, Parallel Trade and Value Based Pricing were covered by a top notch faculty.

Participate in the EPP Forum is a great opportunity to evaluate and share best practices and market trends Life Sciences. 

This was one of the best conferences i have been to in many years. The content and speakers were very insightful.

Discover new profit optimization methods on a creative way for Life Sciences

Model N Sponsors
2^nd Annual EPP Life Sciences Pricing and Profit Optimization Forum 2012
in Montreux, Switzerland

 

REDWOOD SHORES, CA and LONDON, UK – 13^th of March 2012 –

Model N, the leader in Revenue Management, will be sponsoring the 2^nd Annual European Pricing Platform (EPP) Pricing and Profit Optimization forum on Life Sciences in Montreux on May 23 and 24.

EPP is the leading knowledge community for pricing decision makers in Europe.

This high-profile, two-day event will bring together leaders from finance, sales, marketing, and pricing to address current operational and strategic challenges in the European Life Sciences market.

Day One  topics explore the challenges faced by the industry.  We will look at how we can adapt a commercial strategy for a new era and share best practice for addressing reference pricing and parallel trade.  A range of expert speakers including representatives from Baxter Healthcare, Amgen Commercial International Commercial Operations (ICO), and Boston Scientific (EMEA) will share their most effective strategies and success stories.

Day Two topics will include European tender management, rebate and incentives and Compliance, and a detailed examination of best practice concerning optimization of net price and margins. Day two speakers include representatives from Boston Scientific EMEA, Novartis, and Global.

 “This event brings together the Life Sciences community in Europe, providing a great opportunity for our partners, customers, and the industry at large to debate and address the challenges ahead,” says Niels Skov, Managing Director, Model N  Europe. “Model N is pleased, once more, to partner with EPP to host the 2nd Annual EPP Life Sciences Pricing and Profit Optimization forum.”

Founded in 2004, the European Pricing Platform has become the leading knowledge exchange for European pricing decision makers, revenue managers, and CxO’s, dedicated to developing and sharing pricing knowledge, best practices, and resources both live and online. 

The event will provide opportunities to network with leaders in the sector; the people who are shaping pricing strategies across Europe. Amongst those present will be key policy-makers and stakeholders from Novartis, Global, Baxter Healthcare, Amgen ICO, Boston Scientific, UCB, EPP.

“Model N has been carefully selected to join our group of technology experts worldwide because of their proven track-record, experience, and expertise in providing price and revenue management solutions to global organizations,” said Pol Vanaerde, EPP President. “We are pleased to have Model N included on our expert list, and look forward to working closely with them to better serve our participants.”

The EPP President added: “Model N has proven to be a valuable partner offering our audience best practices expertise in the industry.  We are excited to be working with them again and look forward to stimulating discussions and interactions on European Life Sciences pricing in Montreux.”

About Model N
With over  £100b in annual revenues across 50 countries managed in our Revenue Management systems, Model N leverages its deep Industry expertise and best practices, highly configurable applications and comprehensive services to support Life Sciences and High Tech organizations on premise or in the cloud.  Whether you are an emerging business or a global leader, Model N results in revenue www.modeln.com

About The European Pricing Platform (EPP)

EPP is a ‘Not-for-Profit’ knowledge exchange focused on supporting business management, pricing, and profit optimization professionals, and CxO-level executives in Europe across a variety of industries and sectors. Our target is to update the pricing and profit optimization know-how of business managers. Our mission is to be the premier pricing expertise community for international decision makers in a wide range of industries. The interactive sharing, collecting, and development of pricing and profit optimization knowledge are the key elements of our platform. Visit: www.pricingplatform.eu.

2nd Annual Pricing & Profit Optimization Forum on Life Sciences: Save the date!

Click here for more information

Announcement ePP and Model N Partnership

March, 2011

The European Pricing Platform (ePP) is pleased to announce that they have added Model N, a global software provider of revenue management solutions, as a new Technology Expert Partner, exhibitor, and sponsor of upcoming ePP events throughout Europe. Model N will offer ePP participants insights and lessons learned from dozens of global Revenue Management deployments as well as share best practices and strategies for successfully managing pricing within a holistic Revenue Management ecosystem.

“In a highly competitive and globalized marketplace, companies need to ensure their pricing and Revenue Management practices and processes are helping and not hindering efforts to protect and grow margins,” said Niels Skov, Managing Director, Europe, Model N. “We are pleased to partner with a highly regarded organization such as ePP. This partnership will provide an ideal platform to highlight the importance of integrating and aligning pricing with bid and tender, contracting, settlements, and other critical revenue life cycle processes to reduce financial risk and drive business value.” 

Model N is the industry leader in Revenue Management solutions for Life Sciences, High Tech, and Discrete manufacturers. Leveraging a powerful combination of deep domain expertise, industry best practices, and breakthrough technology, Model N's unique approach recaptures lost revenue, provides powerful insights into business performance, and increases visibility and control across multiple organizations and geographies. 

 “Model N has been carefully selected to join our group of technology experts worldwide because of their proven track record, experience, and expertise in providing price and Revenue Management solutions to global organizations,” said Pol Vanaerde, ePP president. “We are pleased to have Model N included on our expert list, and look forward to working closely with them to better serve our participants.” 

ePP serves as the first ‘Not-for-profit’ network for cross-industrial pricing decision makers in Europe. Through various on- and offline media, ePP is dedicated to develop and share pricing best practices, effective tools, methodologies and populate technological solutions assisting in successful definition and implementation of Strategic Pricing. 

About Model N
With over $150B in annual revenues across 50 countries managed in our systems, Model N supports Life Sciences, High Tech, and Discrete manufacturing customers through their entire revenue life cycle across their pricing, bid and tender, contract, compliance, settlements, and channel processes. Our deep industry expertise and best practices, highly configurable applications, and comprehensive services support your organization on premise or in the cloud. Whether you are an emerging business or a global leader, Model N results in revenue. www.modeln.com 

About European Pricing Platform

The ePP aims to ensure your company has the right pricing tactics in place to guarantee customer loyalty and deliver sustained margin growth. Enhance your pricing know-how and facilitate your pricing success by joining this dynamic and resourceful pricing platform. www.pricingplatform.eu