Speed and flexibility are paramount for businesses today, and getting the upper hand requires B2B manufacturers to infuse real-time, highly relevant B2B pricing and sales guidance into their selling channels.
Of course, as performance demands increase, so do the complexities of business. The winner in a competitive field is the one who consistently meets customer expectations.
Manufacturers often find themselves mired in manual, time-intensive commercial processes, particularly when it comes to pricing.
They struggle to respond to B2B pricing triggers — events like cost changes, tariffs, competitive pricing, drastic shifts in demand, or anything that necessitates a price change — quickly, efficiently and effectively.
Once predictable and manageable, pricing triggers now happen much more frequently.
In 2020, B2B customers simply expect a consumer-like experience from their business suppliers – particularly with respect to price. Despite the inherent complexity of B2B pricing, customers expect that prices accurately reflect market conditions, are fair, tailored and instantaneously available – even for large, complex quotes.
Relying on legacy approaches to set, manage and execute prices has only compounded the negative effects of an influx of pricing triggers. Rather, visionary leaders should reimagine their methods to generate and deliver real-time market pricing.
A new world demands real-time market pricing
Real-time market pricing is a vision of pricing that is both dynamic and scientific. Unlike other dynamic pricing approaches, it doesn’t stop at automating rules; it’s quick to respond, but in an intelligent way.
Let’s walk through two use cases for real-time market pricing – in e-commerce and in price approval workflows for orders – and discuss how reimagining the status quo can better serve your business and boost business performance.
B2B pricing in e-commerce: What it is and why you need it
Achieving optimal pricing performance in traditional channels is challenging on its own, especially in a turbulent year like this one. Companies have been stretched even further with the entrance of e-commerce.
The most pressing e-commerce questions I get from B2B company leaders are related to pricing. These include:
- What prices should be presented to customers online?
- How can I differentiate pricing enough to honor existing customer relationships?
- What if the prices I show online to anonymous visitors are lower than what my customers have been paying through other channels?
- How can I serve up the right price that’s enticing enough for a new customer to begin doing business with me without sacrificing too much margin?
- Are my prices good enough to sell new items to customers, without involving a sales rep or needing to negotiate?
These questions are all important but solving for one in isolation won’t give you long-term competitiveness in this essential channel – e-commerce pricing must be truly dynamic.
Dynamic pricing means that your customers see prices that are relevant to market conditions and contextually relevant for their relationship with you at any given point in time. In other words, real-time market pricing.
Yet real-time market pricing for e-commerce is impossible when the only tools at your disposal are traditional spreadsheets and disparate data sources that grow stale before they can be analyzed, let alone acted upon.
Rather, pricing software vendors can help you set discrete yet simultaneous price strategies online that achieve multiple goals for the business, while providing customers the pricing they expect with no lag time.
Real-time market pricing for e-commerce use cases
E-commerce sites create online-specific data like page views, conversions, cart abandonment rates and inventory positions relative to your competitors. This data gold mine must be utilized to set multiple discounting strategies for e-commerce prices.
For example, high inventory and page views with low conversion rates could indicate price is too high. (There’s that pricing trigger!)
Setting smarter discount strategies is infinitely easier with data science, which allows the user to easily pull in and analyze disparate data sets, but also adjust discount breaks on the fly. For example, quickly setting a 30% price discount at a quantity of 20 units when data indicates prices are too high to move inventory.
When integrated via high-availability API, the new prices or discounts can be instantaneously updated in your e-commerce channel.
In addition to setting multiple discounting strategies, real-time market pricing for e-commerce allows B2B companies to:
- Differentiate pricing for existing customers and new visitors at the product category or SKU level
- Set e-commerce-specific discounts that can be personalized (or targeted) to customer segments and product groups
- Offer customer-specific agreement prices and dynamic tiered pricing for quantity breaks online
- Integrate elasticity-based price optimization, ensuring omnichannel price consistency that achieves revenue and margin targets for the business
Shift from reactionary, cumbersome processes by reimagining a more proactive, data science-driven approach. By doing so, your business will be better equipped to meet customers’ expectations online.
Real-time market pricing for orders improves financial and operational outcomes
The same benefits of real-time market pricing for e-commerce are easily extended to other pricing and order processes within a B2B company, such as order entry systems or CPQ applications.
A notable beneficiary of the real-time pricing feature is Shaw Industries Group Inc., a global flooring provider that operates in excess of $2 billion-dollars’ worth of annual revenue with millions of customer price agreement lines.
“Shaw uses the pricing capability to validate that its orders match the agreed-upon pricing in real-time, and then routes it to the correct approver(s) based on approval levels that we can easily change. If any pricing mismatches are detected, the order is sent directly to the appropriate point of contact to be approved or corrected immediately. The software functionality has enabled Shaw to successfully process roughly 15,000 requests per day, and make changes to the workflow and approval levels quickly and easily. These types of changes took weeks or months to affect in our old system.” – Carla Clark, Director of Revenue Optimization for Shaw Industries
In addition to the efficiency gains real-time market pricing can enable, B2B companies also stand to significantly increase revenue and margins while delivering the tailored experience customers expect.
Done correctly, real-time market pricing is immediately available, tailored pricing that is consistent across channels and accurately reflects current market conditions and customer relationships.
Additionally, for a solution to truly be dynamic and real-time, it should also:
- Reflect the current market price calculated and/or optimized against a variety of inputs
- Use more data from varied, unlimited sources more intelligently
- Deliver pricing aligned with strategy across channels in real time
- Intelligently automate approvals, negotiation, counterproposals
- Deliver personalized cross-sell and up-sell recommendations
Manufacturers will continue facing challenging business dynamics that necessitate price changes.
It’s time to meet speed with speed to win consistently.