Manufacturers’ Monthly: Fueling Innovation with Science: Applying Dynamic Pricing in Manufacturing

 

May 20, 2017

By Richard Blatcher

A challenge every professional within the manufacturing industry faces is market fragmentation. With so many players crowding the space, there is no single company that owns a large enough share to be able to influence the industry’s collective direction. Combine this obstacle with the increasing cost of sales, low switching costs, and evolving sales channels and the result is that the sector’s already thin margins continue to shrink.

Manufacturers are facing the reality that traditional strategies that used to grow revenue — improving quality, production efficiency, pricing and marketing — will only take them so far. Today’s manufacturing buyers demand that products get to market quickly and through a frictionless, personalized and precision-based sales experience. To drive repeat and incremental business, manufacturers need a modern commerce strategy that reduces quote turnaround time, provides fair and transparent pricing across all channels, and eliminates internal price negotiations. This is accomplished by moving beyond traditional, low-tech, relationship-based sales processes and embracing digital innovation. Doing so can minimize internal complexity, improve sales enablement and make the sales process faster and more efficient.

By applying dynamic pricing science, customers can more easily buy what they need and at a fair and transparent price. A broad set of data-driven pricing and configure, price, quote (CPQ) tools can provide a manufacturer’s sales team with actionable insights to make quoting decisions with confidence and close deals more quickly, accurately and profitably. Price optimization and guidance tools leverage data science to help manufacturers determine a customer’s true willingness-to-pay for any product at that specific moment in time. This shortens deal cycles, boosts margins and improves customer satisfaction. By generating quotes faster with fair pricing, companies can differentiate from competitors and sustain continued growth.

In today’s digital economy, revenue growth is unsustainable if it lacks focus on the customer sales experience. Manufacturers’ top and bottom lines will also be at risk if they fail to pinpoint revenue challenges and invest in modern solutions to stay relevant in increasingly competitive market segments. In an industry where price used to be the primary driver of revenue, companies must acknowledge that the cost of the status quo is greater than the cost of change.

To learn more about how the sales experience is now the true driver of Manufacturer Growth, download your free ebook here.