A pricing manager is knocking the cover off the ball at an iconic global manufacturer. He’s not the only one. So is the finance director, CFO, sales leader, and head of IT. Unlike other companies that are struggling to find margin rate today, their company understands the impact of pricing on the entire business.
Here’s a look at how PROS enables businesses to be far more effective at maximizing revenue and profit through automated pricing and selling processes, high-performance analytical capabilities, and predictive insights.
It’s incredibly complex to manage pricing, and the pressure to get it right is immense when you consider the impact of getting it wrong. What if only 20% of your product is driving a whopping 80% of your profitability?
Despite the pressure, the reality is that pricers are drowning in spreadsheets. Finding answers requires digging into mountains of data with extremely complex formulas in spreadsheets that have thousands of lines of code, running macros that connect dozens of different Excel books of data, pulling in cost files, product files, and customer files.
It’s impossible to keep up with all the variables that go into pricing, let alone capture evolving market dynamics, which is why many companies end up executing blanket price cuts or price increases.
PROS changes that. A pricing analyst simply opens a dashboard to see all the details of a price list. On a single screen, all the information is there: the repository, the data, the strategy. They can see competitive information, and everything they want to know about an item like the last price paid, cost, freight, what the new price will be and when it’s going to be effective.
They can pull up charts and waterfalls to gain incredible insights. And since other teams like finance, sales, and leadership also have access to analytics, this eliminates a lot of BI and reporting for pricers, which enables them to be more strategic and work efficiently across teams. For example, if they come up with a theory with the sales team, they can dive into analytical work to understand where the price elasticity is, what the impacts are, and what outcomes they could get.
PROS was built for pricers, enabling them to do what they do best. No more downloading data from ERP, loading it into Excel, formatting it, fine-tuning formulas, aggregating it, and creating a report, which could take weeks to a month, and still not be right.
For the ROI-obsessed finance team, who is constantly looking across company financials to understand how and where to drive margin improvement, they need answers to questions like “How did we lose over 300 basis points in this product category?” But answers can be difficult to find.
With PROS, they no longer need to ask the pricing team because they also have their own dashboards to tap into insights. They simply pull up a pricing waterfall, perhaps the margin waterfall, to quickly get to the bottom of what’s happening. With a few clicks they can filter on ANYTHING, whether it’s date, geography, channel, customer, product, plant, sales organization, or base floor price. They can clearly see what’s happening with their total customers or an individual customer, every product or an individual SKU, all orders or a single transaction.
And they’re tapping into real-time data. Most companies today have a dedicated pricing analyst spending 40 hours a week creating reports in Excel—static reports—where the data is immediately stale. Who has time to wait? The fast-moving markets will pass you by.
With PROS, finance teams have the critical real-time pricing information they need at their fingertips to get answers so they can forecast, plan, and build their budgets.
Ensuring customer satisfaction should be a primary focus for sales teams to prioritize, as losing a customer can have a detrimental outcome. Research from Bain and Company shows that increasing customer retention rates by 5% can increase profits by 25% to 95%. The challenge then becomes, how can you ensure that your customer is happy with the products or services you offer them?
With PROS, sales teams can stay alert. For example, our insights/margin driver chart shows them customer attribution vs. customer acquisition and volume vs. mix and overall rate.
If a sales leader sees that buying behavior is dropping off, they can quickly call a particular customer to inquire about why they’re not buying from a product category anymore.
Sales leaders can view analytics that help them assess how their top customers are performing, how their sales teams are negotiating larger deals and contracts, comparing customers to peers. This is also a valuable tool for coaching new sales reps.
PROS also gives sales teams the ability to receive AI-driven prices in their CPQ, enabling them to drive sales efficiency and improve win rates by shortening the time to quote. Instead of looking across spreadsheets and disparate data to determine appropriate prices, salespeople can access real-time price guidance to quickly deliver quotes to prospects, which dramatically increases their chance of winning the deal. PROS patented Neural Network provides customer item-specific pricing, regardless of size, maximizing both revenue and profit. This perfect price is achieved with a 92% confidence, giving the sales organization confidence for each winning price.
A 1% increase in price will drive 8.7% increase in operating profits. This is the biggest lever any organization can pull. Without pricing analytics, leaders who are about to miss their budget might simply approach the pricing team with marching orders to implement a price increase across all products. But that can lead to catastrophic results like insulting some customers and moving products that are already above market into a danger zone.
PROS gives leaders what they need: visibility of margin gains and losses for products and customers so they can understand where to focus company resources, investments, and expenses to optimize overall profitability.
For example, our waterfalls are more than just a visual representation of their income statement. They are powerful analytics that enable company leaders to gain insight, including a better understanding of where a leakage is coming from or where the contribution is coming from to help them make better decisions. They can easily understand, manage, and update price strategies in line with evolving market conditions like costs, indices, competitor prices, and demand information to ensure pricing strategies are moving in the right direction.
IT professionals are focused on security and integration capabilities for their organizations today and five years into the future. It’s their job to leverage technologies to improve sales and pricing processes.
PROS delivers systems that are cloud-first with modern, flexible architectures designed for scalability and reusability that prepare businesses for delivering intelligent and personalized experiences.
IT leaders can focus on buying and selling capabilities in key areas of their business and reuse those capabilities in whatever selling channels they choose to activate in the future, such as eCommerce.
For example, our eCommerce integration enables updates in pricing to be reflected on a company’s website. The pricing integration helps the organization to be well-positioned to handle increased volumes as more customers prefer self-serve websites. As omnichannel selling continues to grow, integrations with PROS (e.g., our eCommerce API) enable organizations to harmonize prices across channels to capture new opportunities for revenue.
With security top of mind, PROS delivers peace of mind. Our secure architecture includes access control, multi-factor authentication, encryption, and state-of-the-art defenses against cyber-attacks. PROS provides all the security and availability features IT leaders demand of a mission-critical application.
Pricing has evolved and changed so much over the years and affects all key decision makers: executive team, pricing team, sales team, finance team, and IT team. When all these groups are empowered with smart pricing, the results are transformative. You suddenly have greater control over managing pricing, developing strategies, and maximizing profits.
Learn how you can drive profitable growth with PROS AI-Powered Pricing. Request a demo today!