Making the right pricing decisions in B2B environments with large product portfolios is no small feat. Pricing managers are required to make rapid, precise pricing adjustments as markets shift, customer behavior evolves, and competition heats up. Even the most robust segmentations can create costly pricing gaps that leak margin.
So what is neural network-based price optimization? It’s an AI model that adapts to dynamic market conditions and unprecedented scenarios through advanced pattern recognition, real-time trend analysis, and buyer behavior insights. It is particularly suited for B2B companies with complex product portfolios and large customer bases who need to optimize pricing in highly volatile and competitive markets, reducing the need for constant human oversight.
This blog describes the transformative impact of neural networks in AI price optimization and how organizations like Wilbur-Ellis, PSS Industrial Group, and DigiKey are using this cutting-edge technology to navigate volatile markets, overcome data sparsity, and make smarter, margin-protected pricing decisions.
From Complexity to Consistency
Pricing in environments with large product portfolios is a challenge that spreadsheets simply cannot rise to. PSS Industrial Group, a supplier of pipeline products and services for the oil and gas markets, explains why.
Since they adopted PROS Smart Price Optimization and Management powered by neural networks, PSS Industrial Group has greater control in their pricing.
“With hundreds of thousands of SKUs, thousands of customers, and multiple locations, you start doing the math and it gets pretty crazy,” says Rene Grado, VP of Transformation at PSS Industrial Group. “Before PROS, we were pricing off Excel sheets. An individual would adjust margins, and then it was really a free-for-all out in the field where each individual salesperson put in sales orders, pricing as they wished,” explains Rene.
Frank Moore, Pricing Manager at Wilbur-Ellis agrees. The agricultural technology manufacturer started using PROS neural network-powered pricing in 2023 to refine and improve their pricing.
“Prior to our PROS journey, it was very much the Wild West of pricing where we had a lot of spreadsheets and a lot of disparate pricing, even in the same regions,” says Frank. “With PROS Smart Price Optimization and Management, now we are really pricing our entire portfolio much more consistently.” He goes on to explain how “with the power of neural networks, we’re able to pull in additional attributes around the products, the customers, and the transactional data,” to optimize dynamic pricing.
Explainable AI: Driving Confidence and Trust
Sales teams resist pricing tools they don’t understand. That’s where the explanatory power of neural networks comes in.
“In the past, we had issues explaining to sales where a specific price came from,” says Stephane Bratu, VP of Pricing at DigiKey, a global distributor of electronic components. “Now, we have a better understanding of the story behind the price which empowers our sales organization, so they can confidently explain and defend every pricing recommendation to customers,” says Stephane.
For Wilbur-Ellis, explainability was key for breaking down silos between pricing, sales, and IT.
“I spent a lot of time with PROS early on as neural network-powered pricing was being developed, and one of my big asks was explainability,” says Frank. “For us to get sales leadership’s buy-in for neural networks, it was important to ensure the pricing is explainable, it’s not a black box solution. Being able to see that within PROS is awesome, and it really helps back up what we’re doing.”
Real Business Impact
Across all three companies, neural network-powered pricing has delivered tangible improvements in both margin performance and operational agility.
For Wilbur-Ellis, the benefits they’ve seen include margin lift, improved collaboration, and centralized data. “We have a lot more consistency around our pricing,” says Frank. “The solution provides us with so many details around each attribute and many ways to dig into the data. In the neural network, the price prediction is significantly better enabling us to stay ahead of inflation.”
PSS Industrial Group has also witnessed margin lift and they now have a deeper appreciation for PROS ability to support robust price governance.
“PROS shows us that price can move in one direction or the other, and that ultimately improves your revenue,” says Rene. “With what we do, we have so many SKUs and so many customers. There’s just no way we’d be able to keep up and manage our pricing to the level that we can now without PROS.”
For DigiKey, the impact is both structural and strategic. After completing their move to neural network-powered pricing, the ability to unify B2B and B2C pricing models and integrate them with business intelligence systems is opening new doors. “I think it’s going to be a very interesting time for us especially in this very, very volatile industry we’re in,” says Stephane.
Lessons in Change Management
So how do you introduce AI-driven pricing and the concept of neural networks to your organization?
Understand your current growth opportunities. “At Wilbur-Ellis, we knew we wanted to be at the tip of leading the industry in a revolution,” explains Frank. “Showing our executive team how slow we were to change prices in our older systems and being able to use the power of AI to enhance that pricing was a pretty easy sell, actually.”
Explain the neural network advantage. For PSS Industrial Group, understanding that neural networks eliminate the problem with traditional segmentation was what won leadership over. “When you go down that segmentation route where you set a price across the board for a group of customers, there are some customers where that price is too high,” explains Rene. “There’s no more leaving customers behind because with the neural network, we’re able to go down to each particular customer, product, and location mix, and set a price.”
Run a pilot to validate pricing. DigiKey ran a pilot to compare pricing to understand neural network pricing. “We validated the Gen IV AI pricing to see how relevant the recommendation was versus the actual prices, and we found out that they were pretty consistent,” says Stephane. “That made us confident to jump in. Plus, PROS really helped us understand Gen IV and made us feel comfortable about it.”
Advice for Other Businesses
Don’t worry if you don’t have clean data. “PROS has a really, really cool tool that helps you [clean data],” says Rene. “My team actually enjoyed it and made a game of it.”
Be open to trying new things. “Try a couple different [pricing] models before you go live,” says Frank. “Pull in the attributes and see what is truly impacting your pricing.”
Jump in, it’s easier than you might think. “It has taken us significantly less time to implement neural network pricing than what we had before,” says Stephane. “It’s a pretty fast implementation of the solution, despite the fact that it’s a very complex business.”
Ready to Unlock the Power of Neural Networks?
Companies across industries are learning how AI-powered pricing can solve their biggest challenges:
- Pricing that can’t keep up with market swings
- Pricing complexity that’s hard to scale or explain
- Internal silos between pricing, sales, and IT
Neural networks make pricing explainable and precise—connecting product, customer, and transaction factors to drive smarter decisions, improve margins, and boost revenue growth.
Reach out today and put the power of neural networks to work in your organization.
