Commercial Excellence Drives Performance
Profitable growth doesn’t happen by accident. It requires rigorous attention to pricing, costs, and commercial decisions—the activities that determine whether your revenue converts to bottom-line profit.
The common gap: Many businesses have good financial reporting but weak commercial finance. They know their overall profitability but not which customers, products, or projects actually make money. They negotiate contracts without modelling the financial implications. They make investment decisions based on gut feel rather than rigorous analysis.
At Oppenheim Advisory, we bring financial rigour to commercial decision-making. Our experience across multiple businesses means we’ve seen what works—and what destroys value.
Pricing Strategy
Pricing is often the largest lever for improving profitability. A 1% price increase typically flows straight to profit, yet many businesses underprice their products and services.
Common Pricing Challenges
- Cost-plus mentality: Pricing based on cost rather than value delivered
- Competitive fear: Underpricing to win business, then struggling to profit
- Inconsistency: Different prices for similar work without clear rationale
- Scope creep: Delivering more than priced without adjustment
- Discounting habits: Easy discounts that erode margins over time
Our Pricing Approach
Analysis:
- Review current pricing and its evolution
- Analyse profitability by customer, product, service
- Benchmark against market where possible
- Identify pricing improvement opportunities
Strategy Development:
- Define value proposition and positioning
- Develop pricing framework and guidelines
- Create tools for pricing decisions
- Establish governance and approval processes
Implementation:
- Support pricing conversations with customers
- Track price realisation
- Monitor competitive response
- Refine approach based on results
Contract Negotiation Support
Major contracts can make or break profitability. The terms you agree to have long-lasting financial implications.
Areas We Help With
Pricing Structure:
- Fixed price vs time and materials
- Volume discounts and commitments
- Price escalation clauses
- Change order mechanisms
Payment Terms:
- Payment timing and milestones
- Advance payments and deposits
- Late payment penalties
- Currency and banking arrangements
Risk Allocation:
- Limitation of liability
- Indemnities and warranties
- Insurance requirements
- Termination provisions
Long-term Obligations:
- Exclusivity arrangements
- Volume commitments
- Service levels and penalties
- Renewal and exit terms
Our Role in Negotiations
We provide financial analysis and support throughout:
- Preparation: Model different scenarios, identify priorities
- During negotiation: Real-time analysis of proposed terms
- Documentation: Review contract for financial implications
- Governance: Ensure appropriate approvals obtained
Profitability Analysis
Understanding where you actually make money is fundamental to commercial success.
Client Profitability
For each customer, we calculate true profitability:
- Revenue (gross and net of discounts)
- Direct costs (cost of goods, direct labour)
- Indirect costs (account management, support)
- Allocated overheads (where meaningful)
Insights often include:
- Large customers subsidising smaller ones
- High-maintenance clients consuming disproportionate resources
- Pricing that doesn’t reflect cost to serve
- Opportunities for pricing adjustment or efficiency improvement
Product/Service Profitability
Similar analysis by product or service line:
- True cost including all relevant expenses
- Contribution margin by offering
- Cross-subsidies between products
- Investment priorities
Project Profitability
For project-based businesses:
- Estimate vs actual analysis
- Scope creep quantification
- Resource efficiency
- Learning for future pricing
Investment Analysis
Major decisions deserve rigorous financial analysis:
Investment Case Development
We build comprehensive models for:
- New product development
- Market entry
- Capital expenditure
- Acquisition opportunities
- Strategic initiatives
Model Components
- Revenue projections with assumptions
- Cost analysis (development, ongoing)
- Working capital requirements
- Financing and capital structure
- Return metrics (NPV, IRR, payback)
- Sensitivity analysis
Scenario Planning
We present multiple scenarios:
- Base case (most likely)
- Upside (things go well)
- Downside (challenges materialise)
- Break-even (what needs to be true)
Commercial Due Diligence
When acquiring or investing in another business:
What We Assess
- Revenue quality: Recurring vs one-off, customer concentration, contract terms
- Pricing sustainability: Market position, competitive pressure, margin trends
- Growth prospects: Market trends, competitive position, pipeline quality
- Risk factors: Customer dependencies, technology shifts, regulatory changes
Our Output
- Detailed commercial due diligence report
- Identified issues and mitigation strategies
- Valuation implications
- Negotiation recommendations
Case Study: Pricing Transformation
A professional services firm was growing revenue but seeing flat margins. Our analysis revealed:
Issues Found:
- Top 3 clients were the least profitable due to legacy pricing
- Standard rates hadn’t increased in 3 years
- Discounting averaged 15% with no correlation to client value
- Scope creep was costing £200k annually
Actions Taken:
- Renegotiated top client contracts over 12 months
- Implemented annual price increase mechanism
- Created discounting guidelines with approval requirements
- Introduced change order process for scope additions
Results:
- Average realised rate up 12%
- Gross margin improved from 42% to 48%
- Annual profit increase of £350k
- Customer retention remained strong (98%)
Getting Started
Ready to improve your commercial performance? We offer:
- Commercial Assessment: Review your pricing, contracts, and profitability
- Quick Wins: Identify immediate improvement opportunities
- Strategy Development: Create comprehensive commercial improvement plan
- Implementation Support: Help you execute and track results
Ready to drive profitable growth? Book a free consultation or call us on 07990 835891 to discuss your commercial challenges.