Critical success factors for successful pricing research

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In my day-to-day life at TBR, I regularly interact with clients seeking to undertake pricing research. Their needs are varied. Some want to understand pricing for a new product or service or sustain their competitive position for an existing offering, while others seek to design an overarching commercial strategy or to increase the effectiveness of their sales teams by arming them with tactical data and insights — and nearly all are focused on influencing revenue and margin.

Capturing pricing data that can be utilized defensibly for decision making is challenging. All pricing is situational and can be influenced by any number of factors. Pricing decisions influence, and are influenced by, nearly all organizational departments, from sales and finance to product management and business strategy, and thus are often highly politicized within ICT enterprises.

Based on our regular experience in serving the pricing research and consulting needs of our client base across ICT industry segments, we have identified five critical success factors that can help clients navigate these challenges:

  • Start with outcomes: We often find that our customers come to us with a research concept in mind, but not a defined goal or set of operational plans for how the research will be deployed in their organization. Sometimes the request is: “We need to know what vendors like us are charging.” But the real goal of the team may be to answer the question: How can we be more efficient in resourcing deals? By starting with the end goal and use case in mind, we find that we often explore areas adjacent to pricing, and that insights on those topics, in concert with pricing data, unlock business value for our client base.
  • Focus on business impact: For all the research we do at TBR, including in pricing, we advise our clients to frame all research needs around the underlying business impact. We design projects, including the questions we propose to cover in primary research and the data that we seek to capture, to ensure that the recommendations we deliver around pricing aim directly at influencing business strategy, revenue and profitability.
  • Focus on context: Our pricing research methodology relies on interviews with vendors and customers. This approach allows us to capture not only pricing data but also contextual data and insights on topics such as discounting, commercial incentives, pricing structures and portfolios. When paired with core quantitative pricing data, these types of interview-driven insights provide predictive value focused on vendor and customer pricing and consumption behavior.
  • Build market constructs: To normalize against deal-specific influencers that can impact a true view of market pricing, we design our research to focus on deal constructs. These constructs are used in all interviews to ensure apples-to-apples comparisons and that we are characterizing a full spectrum of potential price points. Context on topics such as discounting is addressed through qualitative conversations.
  • Consider adjacent markets: Many times, particularly with clients seeking to stand up pricing models and price levels for new offerings, we find that the direct peer landscape may not be the best basis of comparison. By looking at adjacent offerings and considering how similar-yet-adjacent offerings are packaged and delivered, clients are able to gain a broader foothold in their peer landscape in its entirety, and often identify areas to elevate value proposition and raise prices accordingly.

 

The next 5 years: A successful strategy for Infosys

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Updated available: Click here to read about Infosys’ 2025 strategy in this new TBR blog, Infosys’ Future: Scaling GenAI and SLM Innovation to Drive Growth and Stakeholder Trust.

 

In July, after resuming his role as executive chairman, N.R. Narayana Murthy said the following about Infosys’ future: “The strategy is to focus on opportunities from consulting-led end-to-end solutions, leveraging technology for higher margins, developing intellectual property-based solutions to delink revenues from effort.” Murthy set three broad goals — improving sales efficiency, increasing automation and boosting employee productivity, and rationalizing cost — but early indications show Infosys making the third goal its priority as the company has been moving to a substantial onshore/offshore ratio shift. Currently at a 35-to-65 ratio, Infosys’ goal is a 10-to-90 ratio weighted to low-cost resources, ultimately to preserve margins as the company refocuses on large low-cost outsourcing engagements.

 

After setting policy, Murthy oversaw executive-level personnel changes, letting go the leaders who had been in charge while Infosys’ India-centric peers outpaced the company (see following chart). Murthy kept some key initiatives, including Infosys 3.0, which could determine how close Infosys moves to market leaders Accenture and IBM. Launched in 2011, Infosys 3.0 is a long-term growth accelerator, especially as it melds transformational consulting with emerging technologies. However, Murthy and his new team must provide time and support, both in building the 3.0 engine and focusing on low-end commoditized engagements. 

 

TBR believes Infosys must take three strategic steps to achieve its long-term goals in current market conditions:

  • Build up nearshore Americas capacity and capabilities
    Infosys needs to serve the U.S. market better, either with resources on the ground in the U.S. or nearshore in Latin America. The potential growth for any IT company in the U.S., Canada, Mexico and Brazil demands a substantial investment, and India-centric firms cannot rely on the vagaries of the U.S. visa system. Infosys tried to hire mid- to senior level, U.S.-based consultants in the 2000s, but the effort stalled when the company could not find the right people or receive permission from clients to engage in higher-level consulting work. Infosys opened a 200-person BPO center in Atlanta and a 100-person delivery center in Costa Rica in 2013; however, the company still lags in this critical market relative to peers.

  • Acquire consulting capacity in Europe
    Infosys can continue to serve European clients with outsourcing services based nearshore (in lower-cost European countries such as the Czech Republic and Poland) and offshore, but if Infosys wants to shift its consulting/outsourcing revenue ratio from 35-to-65 to closer to 50-to-50, the company must gain more wallet share from EU clients. Infosys recognized the need to move upstream in Europe when it purchased Lodestone in 3Q12 and committed to reorganization on the continent in 2013, but the company must continue acquiring talent that buys permission to play in the management and technology consulting space.

  • Invest in IP
    Global leaders Accenture and IBM separate themselves from Infosys and its peers with IT innovation, bringing together strategy and emerging technologies to create tech-enabled solutions specific to customers’ needs. Infosys started down this path through the development of its Edge Platform suite, including BigData Edge, a comprehensive cloud-based offering for aggregating, analyzing and processing analytics data from internal and external sources; but absent a sustained strategic approach through customer-centric, acquisition-enabled or research-driven IP, the company risks seeing commoditization strip out every difference between Infosys and its India-centric peers.