Global Manufacturer of Shaping & Finishing Materials
About the Customer
This leading manufacturer of high-performance shaping and finishing materials has a strong global presence, with dozens of manufacturing facilities across nearly 30 countries. It supplies a vast selection of MTS (Made-To-Stock, standard) and MTO (Made-To-Order, highly customized) products.
Slow Quoting, Price Inconsistencies, and Low Margins
The company’s sales team for MTO products in the EMEA was using Excel combined with their own legacy tool to manage pricing. However, this demanded tons of manual work and the team was spending a lot of time working out prices. Pricing guidelines were not easily accessible, which made price recommendation execution suboptimal. In fact, quotes would take several days! The back-office would upload the request into the system, send it to the experts, wait up to 3 days for a price, then finally send the quote to the customer.
Unfortunately, this process resulted in manual mistakes, which kept the sales team from trusting the solution. The combination of manual input mistakes and their legacy solution inefficiencies resulted in 15% of quotes having a very low margin.
The company knew it was time to upgrade its pricing processes. Not only did their new solution need to improve the efficiency of the team and reduce quoting time, but it should also enable setup of pricing models using different strategies and be able to leverage the latest technologies (like artificial intelligence) to strengthen the firm’s value-based pricing methodology.
The team needed a pricing solution that could help them work toward their by-country margin objectives within the parameters of their technical and marketing constraints. They needed to be able to steer their pricing using different parameters and rules and then have prices pushed to their home-made CPQ tool. Their new solution should also provide a dashboard presenting analytics that could enable comparison with other products and transactions.
Pricefx was chosen as their pricing solution for a selection of their MTO products in EMEA.
Vast Data Migration for Accurate Analysis and Margin Protection
Back in 2019, the company had partnered with Brennus Analytics (acquired by Pricefx in 2020) to implement a 9-month pilot for their selected MTO products (including 5 billion product combinations) in Germany and France using their historical data, customer data, and product dimensions and attributes.
When Pricefx took over the project in 2021, we performed a solution migration from Brennus Analytics to Pricefx while also expanding the scope of the project to other EMEA countries and implementing additional requirements.
In total, around 1.7 million transactions from the previous 5 years (product master, customer master, extensions, and transactions) were uploaded via Platform Manager and 63 data tables created (2 product, 1 customer, and 60 parameter). Inflation and taxes over this period had to be taken into account in order to get actualized prices. These were then uploaded to the Price Optimizer tool where optimization models were built based on product families, clusters, and attributes, then to the Dashboard for analysis. The resulting price recommendations were then pushed via API integration to the company’s legacy CPQ tool.
The CPQ tool also now provides a link directly to the Analytics dashboard for users to easily analyze quotes, pricing models, and prices. They can quickly access specific request summaries and see how each quote compares with historical data. The Price Optimizer tool enabled the setting up of business rules based on historical data, product attributes, and transaction prices to ensure price alignment and consistency.
The Pricefx team also built Machine Learning (ML) models to enable country-specific price recommendations for each product and to show cost estimates and anticipated margins per quote in order to avoid low margins.
Today, 350 company users in France, Germany, Poland, Iberia (Spain and Portugal), UK, Benelux, and Scandinavia (Norway, Sweden, Denmark, Finland) have access to Pricefx via SSO login.
The company’s pricing strategies are now defined in Pricefx and pricing managers use the tool for their price optimization processes.
Sales managers use dashboards to perform in-depth pricing analytics. The Sales team gets clear pricing guidance as well as instant, consistent and relevant prices delivered seamlessly to their CPQ tool. Pricing confidence and team efficiency has significantly improved, with time-to-quote being reduced from several days to a few minutes.
Here’s how our customer feels our Fast – Flexible – Friendly promise has been most valuable in our partnership:
- Fast: time to quote
- Flexible: tailor-made configurability built around their specific needs
- Friendly: close cooperation and delivery of a high-performance solution
Our business is very complex as we have several country- and category-level constraints. This made implementation particularly challenging, however we achieved a great result! Congratulations to all the Pricefx team.
Channel Manager & Project Owner