It isn’t easy for most sales experts or salespeople to know what drives pricing in B2B business, or how to calculate the best prices while minimizing risks. Using spreadsheet matrices can be hard to keep up with, and can turn into as much of a guessing game as other methods for determining price.
Obviously, if the pricing is set too low, you leave money on the table, resulting in profit-loss. If you set it too high, you lose customers, which can have many ramifications, including an insurgence of competitors. Rather than relying on subjective evaluations to determine and optimize price, why not use price optimization software to increase sales and improve pricing strategies.
Every company puts together some form of impact analysis when price changes go into effect. Most of these are based on educated guesswork. There is not really a mathematical or scientific basis underlying them. They also tend to generalize price response, which removes the impact of any significant price change from the actual market in real-time. This tends to create predictions about price changes that are more abstract and theoretical than they are rooted in reality.
Price optimization software can enable businesses to precisely predict the impact of specific price changes through the configuration of real-time modeling across the whole spectrum of the customer base, taking into account the fluctuations and conditions of the present market. From this basis, price optimization software can safely predict with accuracy the volume change that will occur in every selling circumstance, which is in a state of more or less constant change and apparent (though not actual) unpredictability.
Businesses that are able to know and evaluate price response for any change in every market situation are given a considerable advantage over competitors, since this kind of knowledge puts them in control of pricing strategies. Optimizing the price for profit makes any B2B business not only more competitive, but also more profitable, picking up revenue where it did not exist previously due to incorrect, low pricing, and minimizing risk by calculating the potential for loss and predicting it before the decision to change prices is made.
Pricing optimization software also enables pricing experts to know when to lower prices in order to increase demand, which can also lead to an increase in profitability, and can identify the signs of potential retention loss, allowing managers to recommend changes in order to stabilize the customer base.
The Zilliant platform uses advanced science in its price optimization and sales effectiveness applications to drive measurable financial results for B2B companies. Our pricing optimization software provides the capacity for pricing experts to know the price response at the micro-segment level. This is the critical value needed to accurately predict the revenue and margin impacts of any price change, and to recommend the optimal price changes across your whole business. Companies that take the scientific approach to calculating price response are now able to predict and control how price changes will impact P&L results. Zilliant is located at 3815 S. Capital of Texas Highway, Suite 300, Austin, TX 78704 Phone: +1 512-531-8500 | Europe: +44 7769 294323
