Gross Margin Optimization

ENERGY SUPPLIERS

At Energy21, we believe you should be able to monitor your margin prognosis monthly and at individual contract level. This way, you can anticipate upon both margin optimization opportunities and risk indications already during the contracting period.

Scroll down to take a deeper dive into our approach to margin optimization, the Energy21 Pricing Circle.

Pricing Circle

The Pricing Circle refers to an essential monthly gross margin optimization process at individual customer level that starts right after signing a B2B energy contract.

Instead of evaluating at realized volume level only after contract realization, we enable you to pro-actively monitor at connection level during or even prior to the contract run-time.

Scroll down for the 4 big wins for your organization and your customers.

WIN #1

Deal with contract – realization deltas

Monthly reports at individual contract level provide insights in the delta between contractual and realized volume.

This enables you to identify customers that do not perform according to their contracted realization. You can use this information to approach them and pro-actively discuss for example alternative offers or penalties.

Case Study: Exposing hidden deviations

Interview: Gross margin optimization requires a change of focus

Read this interview with Bas Geerdes, Manager of Product Services Sales at Uniper Benelux, about his view on gross margin optimization. 

WIN #2

No blind spot for contractual mutations

Contractual mutations are of great influence on your gross margin. By applying the Pricing Circle, you will be forced you to keep accurate track of these mutations. This provides you insight in the prognosed volumes on connection level.

Aggregating these volumes allows you to prevent expensive long or short portfolio positions.

WIN #3

Speed up your improvement-cycle

By monitoring individual price components such as the credit- and imbalance risk on a monthly basis, you can evaluate cost calculations and improve future pricing mechanisms for new contracts already within the contract period.

This speeds up your learning cycle from yearly to monthly refinements.

WIN #4

Optimize your commercial strategy

You can drill down to individual contract level and evaluate gross margin on each appropriate level such as sales product, customer type, consumption year.

This way, you can distinguish commercial trends and substantiate decisions to either strengthen successful business cases or phase out less profitable customer groups and energy products.

EAGER TO OPTIMIZE YOUR GROSS MARGIN?

Let us help you run a better Pricing Circle!

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Freek Venneman will get in touch to discuss your gross margin optimization opportunities.

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Freek Venneman

Lead Consultant Pricing Circle