3 Valuable Applications for Price Optimization and Management
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Most businesses have adopted procurement management techniques to assist profitability by cutting down production costs.
There are however, only a few companies which are addressing pricing strategies in order to drive revenue, which is the profitability equation’s other half. Pricing, according to many is the most effective tool corporate executives can make use of each time they want to affect the profitability of their business.
A number of recent Gartner reports strongly reinforced that viewpoint, highlighting price optimization and management (PO&M) as a “transformational” technology for a number of business functions.
Those concerned with product marketing and pricing adjustment techniques, will benefit from some tips and tricks that they should make use of.
Tip#1: Focusing Segmentation in What Matters Most to your Consumers:
While many organizations segment their market by consumer size, product families or geography, you should note that none of these categories focus on the actual purchasing behavior. Each of these categories is often treated equally when a person is predicting an optimum price.
Without understanding which attributes normally drive pricing behavior, businesses are left with an incomplete layout on how to price their commodities more accurately. For instance, a high-volume consumer may be considered more profitable in terms of purchases, yet a lower volume consumer in the long run may be more valuable, because he may be more loyal to the products you are dealing with. Price optimization software assists businesses in determining a handful of key attributes which drive price behavior, like products bought by a consumer.
Tip#2: Moving Beyond Basic Administrative Rules:
There is price optimization software that applies basic administrative rules which assist in generating better pricing. Basically, pricing managers use rules of thumb which are well- known throughout the organization. However, a lack of robust tools often prevents them from being uniformly applied. Pricing software tools automate only current manual processes. They do not fully exploit the potential of pricing optimization that goes beyond the automation of simple rules. These programs offer consumer-specific price recommendations based on all the available data.
Tip#3: Believing that Pricing Optimization Doesn’t Need Loss Data:
Most experts believe that without access to consumer loss data there can never be any accurate determination of the market pricing. By analyzing win data in order to determine win- rate elasticity- knowing the price point at which each deal is won can optimize prices to maximize profitability margins.
Here are some Software Options that can Aid in the Process of Product Marketing
Vendavo – Harness Dynamic Pricing Science for Revenue Growth
Vendavo is among the leaders in front- line product optimization. They help business profitability by delivering simple, actionable guidance to the front lines. This enables sales people to negotiate confidently as well as sell more profitably.
Vendavo’s technology often accounts for cost effective changes with dynamic pricing. This tool allows both the business owner and consumers to benefit.
Syncron – Aftermarket Service Optimization
Syncron’s Global Price Management (GPM) is designed to organize incoming information, figure out what’s important and execute more informed pricing policies.
Price Management from Syncron automates and optimizes prices so you can improve revenue and margin.
Their price management software makes pricing easy. We accurately and efficiently group products, apply value drivers, model business impacts, and implement new prices.
Navetti – Boost Sustainable Profit
Navetti, transforms theoretical principles into operational pricing, which are tailored to the unique business requirements of their clients.
Good knowledge in pricing basically can really improve profitability. This is an ideal way to improve consumer satisfaction.
The purpose of pricing optimization is “to not leave money on the table” when engaging in a financial transaction since it will lead to the goal of increasing a company’s Net Operating Income (NOI).
Published at DZone with permission of Omri Erel, DZone MVB. See the original article here.
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