As one of the world’s leading chemical companies, BASF operates in nearly every market and industry—from automotive to healthcare, construction, and agriculture—making pricing uniquely complex. With commoditized products, highly specialized offerings, global supply chains, and strict regulations, BASF needed a scalable and standardized approach.
In this customer spotlight, Sandip Deshpande, Senior Pricing Manager at BASF, and Hans-Peter Klug, Lead Strategic Consultant at PROS share how BASF and PROS have partnered for over 15 years to transform pricing. By implementing Price Optimization and Management and a global CPQ adoption, BASF highlights how scaled pricing was harmonized across ten divisions worldwide. Leveraging PROS Smart CPQ and pricing solutions helped BASF improved modularity, speed, and accuracy while reducing errors and enhancing the customer experience.
Video Highlights
- 0:36 – Introduction to the Chemical Industry
- 2:17 – Introduction to BASF
- 2:23 – BASF’s History with PROS
- 6:05 – The Goal of Scaled Pricing
- 7:50 – BASF’s Business Challenges
- 8:13 – Tier Pre-Definition: Smart Price Management (SPM)
- 9:36 – Tier Defaulting in Quote: Smart Configure Price Quote (CPQ)
- 10:32 – Defaulting Latest Tier in Quote: Smart Configure Price Quote (CPQ)
- 11:51 – The Business Impact
Full Transcript
So welcome. I’m really excited to speak today to you, and to present together with our long standing customer, BASF. They’ve been a customer for quite a long while. They have not not only been a customer, but a co innovator, a partner with us.
And, I got to to get to know the BASF team quite, quite, good. And they’re, some of them are really, gotten to be my friends.
Today so BASF maybe, many of you might know them. They’re working in the chemicals industry.
What is so special about the chemical industry? It’s a global backbone. So chemicals are are important in so many industries ranging from agriculture to, medicine to pharma to, manufacturing to basically in any industry.
They’re highly diverse. They have products that are very commoditized, and, the price, there’s little differentiation, so it’s really, mainly on price. There’s also something going on in in specialty chemicals, where manufacturing is highly complex. They have long supply, chains. They have it’s highly regulated, so it’s quite complex.
They got heavily impacted by the volatility.
And the customer base is very diverse ranging from large industrial customers to smaller, smaller individual customers.
So with me today, Sandeep.
Sandeep, do you wanna introduce yeah.
Thank you, Hans. Yeah. And a warm welcome from me as well. I appreciate your time today.
Yeah. Before I start, as, Hans mentioned, we’ve been working with PROS for almost fifteen years. So over time, we had many success stories. We were the co innovators, we still continue to work together for the success of both BASF and PROS.
But in the interest of time, we are only talking one success story here. And, before I get to that, let me talk a little bit about myself and, a little bit about who we are and how we are connected with PROS. Yeah.
So I am Sandeep Deshpande, yeah, senior manager at BASF Corporation.
I manage digital pricing topics for North America.
All things digital that includes, of course, the CPQ, strategy execution, and everything around the digital space of pricing.
We, as a BASF, we are one of the leading chemical companies in the world.
We’ve been there pretty much in every market, every country that you can think of. Yeah.
And we have been creating chemistry for over one hundred and fifty years with support from our one hundred and twelve thousand employees worldwide.
In last year alone, we made sales of about sixty five billion euros spanning almost all the market segments.
As Hans said, we are pretty much everywhere. Yeah. You can think of automotive, we are there. You can think of construction, we are there. You can think of health care, we are there. So pretty much we are everywhere within our life. Yeah.
So a little bit about the history with PROS. So our history with PROS, our collaboration goes a long way back. It started in twenty ten actually. Yeah. So we are one of the original users of, PROS CPQ platform.
Actually, it used to be called the PMM back then. Yeah. So it started with the introduction of this PMM price and margin management framework to all of our individual business units to improve the manual pricing efforts. So we really started small looking at how much it cost us to actually maintain pricing manually, and we wanted to start small with the improvement on that framework. Yeah.
And then, in around twenty fifteen is when we really started to look into pricing as a more standardized framework approach because we learned from our mistakes of individualization of the PMM framework to individual business units and really went out of hands because there were just too much of customization that we had to worry about. So we started looking into this PMM two point o as a part of the standardized pricing framework.
And within six years, our PMM two point zero framework became the go to pricing platform for our business units to improve pricing maturity.
And that was a weak success from our point of view. And then around twenty twenty one came the sales force to BASF.
So we started this smart CPQ and smart price management process within BASF.
Our accelerated adoption of this, CPQ platform with support from PROS won us this customer outperform award in last year. So we were the winner last year in the growth category for that. And I must thank Hans and all of the pros team for supporting us because we have ten operating divisions across all regions, and we were able to roll out already the CPQ platform to all of them, almost all of them. So that was a big success. And getting an award on top of what was was a icing on the cake for us. Yep.
So today, we are looking into this AI pricing, and, we wanna strengthen our pricing platform further with the usage of this AI pricing. And also this agents thing that we talked about today, we will definitely look into that because I see a use case for that in our industry in terms of the AI pricing.
So what is this success story that we wanna share here? It revolves around a concept of scale pricing. You may have heard this in industry it is called scale pricing or sometimes it is called a tier pricing, but for us it means the same. So, we had this challenge of actually harmonizing the terminology within the BASF to make sure that before we look into from a framework point of view, everybody is talking about the same thing. So what is the scale pricing?
So in chemical industry, scale pricing is widely used.
It actually incentivizes the customer to buy more because typically a higher volume results into a lower price.
And sometimes as we talked about the rebates before as well, it is required contractually by our customers to actually monitor the prices by scale as well.
Since the goal of the scale pricing is to drive profitable growth, many of our business units expect it to be a part of our pricing framework and want to have it from the get go.
In addition to that, many of our business units have distinct requirements.
Some of them wants to define these scale breaks and standardize them and actually define the offsets so that the negotiated prices can be adjusted automatically.
And some wants to predefine them, but will not allow sales user to change them. And some really don’t use it because there’s no use case for them in their business.
So our business challenge back then was how can we enhance this pricing framework that we have to enable easy configuration of scale pricing as per the business needs.
And now Hans will talk about how PROS helped us to address this challenge.
So one might think, hey. It’s very simple. If if somebody purchases, whatever one kilogram, he gets one price. If he purchases a hundred kilogram or or a ton, they get another price.
But how is that, being done in the system? Actually, first of all, it starts with somebody in the back office, maybe a product manager, to come up with standard scale saying, hey. What do I wanna have as a template out in the market? What do I want my sellers to actually sell?
So, again, yeah, you can can put that against the, the product. But, hey, there are few things to consider. So first of all, you might have, tiers that are not starting from zero.
Secondly, you might have plus or minus adjustments. So in some cases, you might actually increase the price for for certain quantities. In In other cases, you might might wanna give an additional discount.
Those tiers might change over time depending on, on the on on what’s going on in in the world, what’s going on in the market. You might wanna need to adjust that.
And finally, this scale needs to be available across the platform. So BSF is one of our customer that uses almost the whole platform.
So while I’m setting that up in Smart Price optimization as a back office manager, I also want, sales to be able to to view that.
So how does it look like in in CPQ? So, basically, we have that in the back office. Whenever a seller is putting in that product into a quote, they will be able to see those predefined tiers and saying, okay, does that really apply for my customer? Maybe they they have a special need for their individual customers to deviate from that. So in this case, they will be able to override those default scales. Maybe there’s an approval process attached to that.
And once it’s, once it’s overwritten, once it’s approved, once the customer accepts it, it needs to be written back to our, smart palm to be able to be stored, to be executed, and later on in the back office system to actually, be able to put the right price, on the orders.
But it doesn’t even stop there because the next time that customer orders,
we have in the back, background, we have two different scales. On the one hand side, the default scales from product management and the overwritten scales from the individual sales rep. So the next time when maybe the same same sales rep or another sales rep for this customer or maybe it’s it’s been set up on on a higher level in the hierarchy, maybe another sales rep is entering a quote for one of those customers within that customer hierarchy. They need to pull in the most, detailed scales, which means the one that has have been overwritten.
They need to be shown and pulled into the quote. Again, they will have the possibility to potentially override that, which will then be written back into our smart prompt system and then be available there.
So with that, maybe you wanna finish this off. Yeah.
So you see a little bit here the power of configuration. Right? So as I mentioned before, we have different business units with different requirements.
So with this configuration and working with PROS, we were able to create some steering cables in the background so that we can enable
this configuration, based on the business needs, and I call that as a modularity.
And I believe that is one of the strongest suites of our pricing platform because we have one platform for all of our ten operating divisions that span all the regions in the world.
So we want to make sure that we as a platform provider can easily configure these different functionalities for our businesses.
The second important impact, that I think that this brought to our business unit is the speed.
Because if you look at it from the sales user point of view, I’m a firm believer that the more the less they are asked to input into a quote, the better the user experience is. So by defaulting these scales, based on the business needs, we reduce those inputs from the user and that results into a better user experience in general.
And the last but not the least, the price discrepancy because at the end of it, it comes down to your invoices and how accurate your invoices are.
And if based on the business needs, we publish these prices along with the scale breaks, then the invoices on the other hand what we have experienced have lower price discrepancies that means essentially lower errors.
Now what that also leads to is lower number of credit and debit notes. In general, we save the overall cycle time and also reduce, the invoice errors, which leads to a little bit better experience for our end customer as well.
So that is one of the case that we want to talk about, you know, and thank you.
