The pricing software industry is plagued with many myths and false assumptions. And that’s as perfectly understandable as the technology has been moving at astonishing speed over the last decade. Pricing software has become more powerful and now offers more pricing insights than thought possible just a few short years ago. However, those myths and false assumptions act as roadblocks for people who want to adopt pricing software in their businesses. Sure, pricing software can lead to significant profit lifts, business efficiencies and time savings for most commercial organizations. If you, as a business, are not opting for pricing software due to these myths, then you are losing out on unprecedented growth for your business. With this article, we have decided to examine the historical data misconception and bust 9 other myths along the way.
At Pricefx, helping companies implement and make the most from their pricing software solutions is a huge part of what we have done for the last decade or so, and part of that process means answering all our customers’ questions that may stand in the way of them using pricing software technology to maximize their profits through optimized pricing.
In this article, we will dispel the following myths regarding price software;
Can I Scrape Historical Data?
Can Pricing Software Set my Pricing Strategy?
Can Pricing Software Set My Business Objectives?
I’m Happy with the Status Quo Doing My Pricing in Excel
Pricing Software Discovery and a Demo the Same Thing
Getting Return-on-Investment (ROI) on Pricing Software Takes Forever
Pricing Software Will Put My Team Out of a Job
I Have Business Intelligence Software – I Don’t Need Pricing Software
Cloud-Native Software is Not Secure
Aren’t AI & ML the Same Thing in Pricing Software?
These myths can be obstacles for many businesses considering pricing software and the sooner they’re busted, the sooner your organization can potentially by defining itself with pricing success stories. Here are the most popular myths regarding software development to help you
Myth #2 – Can Pricing Software Set my Pricing Strategy?
Sorry to disappoint you, but pricing software cannot set your pricing strategy (choosing which pricing strategy best suits your company’s direction and objectives will be a task for you and your team not pricing software), but pricing software sure can help in implementing the pricing strategy you select for your company.
Pricing Software can do all the following:
Implement any set of pricing rules you can possibly imagine
Enable you to focus on strategy with end-to-end automation
Empower you to use your time more efficiently with dynamic pricing
Give your team time to focus on your strategic choices that help grow your business
Give power to your pricing team with a flexible rule system
Experiment with new strategies on a product or category level
Remain flexible and agile with fast response times
Make fast price changes (no IT team update hack required)
But it cannot tell you how to run your organization, set your unique set of business objectives or whether the new cereal box you are considering introducing should be blue, purple or red.
But it sure can help you optimize the price you will set for that new cereal product and price it accordingly across your different regions to maximize your profit according to your pricing strategy.
Myth #3 – Can Pricing Software Set my Business Objectives?
No. See Myth#2 above. Pricing Software cannot set your business objectives, but what it can do is determine the best outcomes for all and any objectives you wish to put in place through optimization.
Today, developing a pricing strategy in an enterprise business is often a process where departments with differing objectives are required to execute a strategy that is not designed to deliver their needs.
Usually, this is due to prioritization and strategy being set without the benefit of optimization that could simulate the best outcome for all stakeholders, resulting in subpar results.
Using Optimization, organizations can seamlessly plug-into the capabilities of the advanced Artificial Intelligence (AI) of pricing software to their existing process. The AI technology can simulate multiple organizational objectives at once, while observing customer relationships, competitive intelligence, and existing constraints.
The result is a strategy optimized for executional success across your company’s stakeholders.
Myth #4 – I’m Happy with the Status Quo Doing My Pricing in Excel
In reality, in the world of pricing; if you are sitting still, often, you are actually going backwards.
Many companies often tell us that they already have a perfectly manageable process in Excel, so why mess with it?
Fine… just a quick question:
Does your organization only have one product and one customer?
If yes, then… we absolutely agree, no need at all for pricing software; you are totally fine as you are.
If no, we have some follow-up questions for you:
How much time is spent on your current pricing processes?
How accurate are your numbers?
Can you scale your processes to meet your business growth goals?
Can you double your customers without doubling your pricing team numbers or the time required to serve them?
Growing requires scalability, not the status quo. If continued growth is part of your business model, then you’re going to need pricing processes that you can scale to enable your team to do more in less time. You’ll need to get back to customers sooner with more accurate quotes that boost your organization’s win rates, and to provide win-win rebates, discounts, and customer service that puts smiles on the faces of your clients and retains customers longer.
Myth #5 – Pricing Software Discovery and a Demo Are the Same Thing
No, sorry, a pricing software discovery call and a demo are two different things.
A discovery call is the first conversation you have with your pricing software vendor after showing your initial interest. The call serves as an opportunity to uncover your company’s unique pain points, priorities, and goals and begin building rapport and developing a relationship with your prospective pricing software vendor.
The goal of the discovery call is not to see what the pricing software does and does not do, but for the vendor to get to know you, learn what you’re struggling with now with your pricing and to determine the fit and suitability of the software to solve your company’s pricing issues. A good discovery call can save you a bundle of time in the demo and eventually, in the implementation phases of your pricing software project.
Your pricing software demo will show you how you solve all the pricing headaches that you mentioned to the vendor on your discovery call.
Two final points and discovery calls and demos;
Don’t try to roll a discovery call and a demo into the same call. You will be selling yourself short and setting yourself up for failure.
A demo without a discovery process is a waste of time. Your discovery call will usually drill down into 5 or 6 major pain points that you’d like your pricing solution to deal with successfully. That will make your demo a far more enjoyable, a less tedious experience and provide pricing software solutions for your company’s unique pain points.
Myth #6 – Getting ROI on Pricing Software Takes Forever
However, as you can see in the below image, 30% of Pricefx customers see ROI within just 6 months and a whopping 56% will make it to ROI within a year.
Myth #7 – Pricing Software Will Put My Team Out of a Job
Pricing software was never designed to replace people, but rather to replace tasks—the tedious, manual, error-prone ones at that. Like trying to do pricing in an Excel spreadsheet.
If you’re not using pricing software, right now you’re spending most of your time doing these basic tasks, meaning you’re an IT asset than a business strategy asset. Your true value is not your ability to manage and manipulate spreadsheets, but in what you know.
By streamlining and automating processes, pricing software frees up your pricing team’s time and refreshes their collective focus. The technology allows you to leverage the tools of your new solution to tackle bigger fish and make a lasting impact on your company’s bottom line.
It places you in a position to make better decisions (remember as we discussed above, it is not going to make the decisions for you!). Your team are essential to the pricing process, but now the process will be more fun, challenging, strategic, fruitful, and creative.
Myth #8 – I Have Business Intelligence Software – I Don’t Need Pricing Software
This is one of the more interesting myths out there about pricing software, that Business Intelligence Software (BIS) like Tableau or Microsoft Power BI can perform pricing analytics to the same level that pricing analytics software can.
The two tools do entirely different work. The two tools are complementary, each performing separate functions.
If you’re looking for tool that you can use to collect, organize, visualize, and analyze data accumulated through your business operations to highlight trends and patterns through graphs and dashboards to allow for actionable data-based decision-making, across a range of contrasting functions then a BIS solution might be preferred.
On the flip side, if you are looking for a precision pricing tool with which you will be able to surgically analyze your optimal prices so you can explore your pricing at a granular level to identify drivers for value and uncover segments, patterns, and opportunities you never knew you had, plus perform actionable things like price list updates, contracts and guidelines etc. with built-in CPQ (Configure Price Quote) capabilities that can support your sales team in understanding, communicating, and defending your prices during negotiation, then pricing software is for you.
Myth #9 – Cloud Native Software is Not Secure
For years before the cloud came about, people naturally assumed that their on-premises servers were safe sitting in the company’s basement. The servers were right there with the employees, under the physical control and protection of the business.
In the past, servers were physical things that you could touch and that personal feeling implied great security. Now in the virtual world where cloud infrastructure is a little more fluffy, foggy, and esoteric, a level of security needed to be created that matched the feeling of ‘I can touch it’ personal security.
All native cloud pricing software vendors do as much as possible to be able to provide secure cloud infrastructure and service. In most cases, native cloud providers employ independent auditors to perform a range of control tests that are focused on internal control environment, processes, and security management (particularly for correct access management – which is the most important security area for a native cloud pricing software provider).
Myth #10 – Aren’t AI & ML the Same Thing in Pricing Software?
Terms like artificial intelligence (AI) and machine learning (ML) are often used synonymously and the difference between the two is overlooked. However, these two terms are genuinely two different concepts even though machine learning is actually a part of AI.
In other words, ML is one of the building blocks for AI.
ML is limited by requiring clear instructions from its programmer, while AI can dissect data, make decisions, and learn.
What that means is that the latest and most sophisticated AI pricing software is more powerful and allows you to do more pricing functions;
With more complex use cases, solving a broader set of problems considering more complex circumstances.
More accurately and intuitively
In a less supervised or pre-determined environment.
Across a broader set of objectives and constraints.
Pricing Software Myth Buster!
We hope that through this article, we have been able to dispel the most common pricing software development myths. Try not to get entangled in these myths as not opting for pricing software and the value it can bring to your business (because of a simple urban legend) could be a big mistake for you and your business. The best way to know about the facts surrounding pricing software is to ask the experts.
With our decade-plus worth of experience, at Pricefx, we understand that investing in pricing software is no small decision. But we know that for 99% of you out there, it’s the right one. You’re either losing money with every transaction right now either due to your pricing latency or inaction.
If you would like to learn more about why you really do need pricing software, then check out this handy article on building a business case for pricing software in your business:
Idrissa Diop has over a decade of experience in pricing. As a Solution Strategist at Pricefx, Idrissa helps companies to improve their pricing processes, profit, and growth with software. His expertise ranges from defining a pricing strategy to pricing strategy audits and competitive analysis.