Issue link: https://pros.com/learn/i/1517332
This isn't even to mention that dynamic pricing allows you to respond quicker to the market during times of volatility, allowing you to update price lists quickly and be proactive instead of reactive. 3: Pricing Must Be Profitable Don't be so quick to drop prices below those of your competitor's. Firstly, because of the tremendous leverage pricing has on profitability, it is very rare that lowering prices by itself can generate enough extra demand to achieve incremental profits from such a move. A company with 10% profitability must get better than a 10% increase in volume to offset just a 1% decrease in price. Imagine how much volume must be recovered to offset a 5% decrease in price. In short, lowering prices is typically not a recipe for improved profitability. Secondly, as stated above, customers don't only buy on price. Aside from the speed of the quote, quality, service, selection, availability, ease of doing business, reputation, trust, and support typically rise to the top when customers make their decisions on with whom they will do business. It's time to move away from cost plus pricing and manual, error-prone processes such as Excel and ERPs that leak revenue. Now's the time to turn to technology like price optimization and management (PO&M) software that can help you drive profitable growth. An AI-backed profit optimization platform can allow your organization to efficiently manage and optimize the price of its goods and services. Not only does it offer sales intelligence advice such as best-next-action recommendations and customer churn warnings, but it also incorporates the latest market information, delivering informed, dynamic, and personalized pricing decisions to buyers across both traditional and digital channels. Ultimately, it can accelerate pricing processes while increasing margins and protecting price attainment. Thankfully, PROS can help manufacturers solve the pricing problem through our PROS Smart Price Optimization and Management. We provide your organization with insights and analytics so that you can act proactively to fluctuating market conditions, quickly respond to competitive pressure, and always have visibility into pricing and profitability. With PROS, you can deliver instant, personalized prices tailored for every unique buying and selling interaction and coordinated with all your go-to-market channels. This market- based pricing system is responsive to multiple changes, including those pertaining to: costs tariffs, competition, inventory, components, supply & demand, purchase history, volume, customer tier, product, region, capacity, market, channels, BU strategy, customer behavior and other attributes Essentially, PROS can incorporate external data feeds into pricing formulas to help predict the changes of supply and demand, giving you an accurate price every time. This helps keep your pricing competitive no matter what the market conditions are. Ready to learn more about how PROS can help your business develop impactful pricing strategies with cutting-edge AI? ACHIEVE A COMPETITIVE ADVANTAGE WITH PROS ENTERPRISE AI Scan the code to learn about PROS Enterprise AI for Industrial Manufacturers PRO TIP