As the modern world places increasing importance on speed and flexibility, the ability to infuse real-time, highly relevant pricing and sales guidance into their sales channels can give businesses the upper hand on competitors when it comes to meeting customer expectations. Of course, as the demands of performance increase, so do the complexities of business.
Market conditions and business dynamics are changing at an increasingly fast pace, leaving companies struggling to respond to pricing triggers — events like cost changes, tariffs, competitive pricing, inventory status, or anything that necessitates a price change — quickly, efficiently and effectively. Once predictable and manageable, pricing triggers are happening 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 quotes.
Relying on legacy approaches to set prices has only served to compound the negative effects of an influx of pricing triggers. Rather, visionary leaders should reimagine their methods to deliver 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.
In this article, I’ll walk you through two use cases for Real-Time Market Pricing – in eCommerce and in price approval workflows for orders – and discuss how reimagining the status quo can better serve your business and boost business performance.
Real-Time Market Pricing in eCommerce – What It Is and Why You Need It
Ensuring that pricing performs well enough in traditional channels is challenging on its own; companies have been stretched further with the entrance of eCommerce.
The most pressing questions I hear from B2B company leaders when it comes to a robust eCommerce solution are related to pricing. Questions 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 are lower than what my customers have been paying?
- 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 talking to a sales rep or needing to negotiate?
All these questions are more than valid, however, solving for one in isolation won’t give you long-term competitiveness in this essential channel. Rather, eCommerce pricing must be truly dynamic. Dynamic pricing – while something of a buzzword – means that your customers see prices that are relevant to market conditions at any given point in time. In other words, Real-Time Market Pricing.
While the definition is simple, achieving it isn’t as straightforward. In fact, real-time market pricing for eCommerce is impossible when the only tools in your toolbox 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.
One eCommerce use case is utilizing online-specific data like pageviews, conversions, cart abandonment and inventory availability to set multiple discounting strategies for eCommerce prices. For example, high inventory and pageviews with low conversion could indicate price is too high. (There’s that pricing trigger!)
Setting smarter discount strategies is infinitely easier with this approach, which allows the user to easily pull in and analyze disparate data sets, but also adjust discounting breaks on the fly. For example, quickly setting a 30 percent 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 eCommerce channel.
In addition to setting multiple discounting strategies, Real-Time Market Pricing for eCommerce allows B2B companies to:
- Differentiate pricing for existing customers and new visitors at the product category or SKU level
- Set eCommerce-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
Shifting from reactionary, cumbersome processes requires reimagining a more proactive, data-science driven approach to delivering Real-Time Market Pricing. By doing so, businesses can become better equipped to meet customers’ expectations online.
Real-Time Market Pricing for Orders Improves Financial and Operational Outcomes
In fact, the same benefits of Real-Time Market Pricing for eCommerce are easily extended to other pricing and order processes within a B2B company. When dynamic, optimized prices are delivered via high-performing API, the sky is virtually the limit when it comes to the types of problems you can solve in real time.
A notable beneficiary of the real-time pricing feature is long-time Zilliant client 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.
Real-Time Market Pricing for eCommerce or other channels should be immediately available, tailored pricing that is consistent across channels and accurately reflects current market conditions and customer relationships. It should be delivered instantly, even for large quote requests, with no lag time during negotiations. 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
To learn more about Real-Time Market Pricing that delivers tailored, intelligent and market-relevant pricing at a moment’s notice, read Zilliant’s announcement:
The post How Real-Time Market Pricing Can Boost Business Performance appeared first on Martech Zone.