4 Reasons Pricing Software Companies Are Not Consultants
It’s great news that you are considering pricing software to power your business to new profit heights and increase business efficiencies for your organization. Congratulations! You are on the right path. But there is an important thing you need to know; pricing software will not set your business strategy and nor will pricing software companies set it for you. It’s time we clarified the confusion of what a pricing software provider can do for your business and that is why we decided to clear the muddied waters with this article, ‘4 Reasons Pricing Software Companies Are Not Consultants’.
At Pricefx, for more than a decade now we have been empowering businesses just like yours to find their own unique pricing niches with the use of innovative pricing software technology. As such, Pricefx is perfectly placed to discuss exactly what kind of pricing consultancy partner will be best suited to assist you in developing your pricing strategy scope, implementation needs and requirements to reach your ideal outcomes for your pricing software project.
Let’s dive straight in by listing the top 4 reasons that there are better places to unearth pricing consultancy than with a pricing software vendor, before analyzing each reason a little deeper and finally, pointing you in the right direction to find the assistance you need.
The Top 4 Reasons Why Pricing Software Vendors Don’t Do Consultancy
Whether you own a small company without the resources for an on-site pricing department, or are part of a large-scale enterprise business that is simply too busy to deal with creating a pricing strategy or managing your own pricing software implementation, you will be interested to know there are 4 basic reasons pricing software vendors generally do not provide you with a consultancy service;
- History & the Legacy Role of Consultants in the Pricing Industry
- Speed, Insights and Specialization of Consultants & Pricing Software Partners
- General Pricing Expertise of Consultants & Pricing Software Partners
- Niche Industry Expertise of Consultants & Pricing Software Partners
1. History & the Legacy Role of Consultants in the Pricing Industry
Long before there were pricing software companies, there were pricing strategy consultancy companies. And those pricing consultancy companies initially exposed what a pricing waterfall is and how each company has a unique pricing waterfall for their products. Because the technology had not advanced to where it is today, pricing strategy consultants were their own data scientists and built unrivalled pricing expertise that most companies (even large-scale enterprise businesses) could not hope to rival.
Back in the late 1980’s and early 1990’s, having access to the technology to drive that sort of pricing science was not a cheap, scalable, or trivial thing to manage. In that environment, pricing strategy companies built a level of expertise that is unrivalled to this day. And companies worldwide queued for the services of pricing consultants and handed over their data diligently on an annual basis to complete their yearly pricing check-up.
Fast forward to the 2020’s, and for a different reason, pricing strategy consultants remain in place as the ‘go-to’ for most businesses to report on their pricing check-ups. Before, business organizations did not have the tools in place to concern themselves with pricing strategy. Now, pricing software companies are investing much of their time and resources into the research and development of their pricing solutions. And as that process evolved over time, pricing consultants continued to remain in their niche position of strategy specialists.
Meanwhile, a new form of pricing partner also evolved, the system integrators to specialize in linking companies with the functionality of their new pricing software. Pricing consultants, or partners as they are now more commonly referred to, are important as they always were and with system integrators now involved, even more so.
2. Speed, Insights and Specialization of Consultants & Pricing Software Partner
Pricing strategy and the right pricing tools go hand-in-hand, but make no mistake, they are quite different and specialized tasks. Sure, the functionality of a modern and powerful Price Optimization tool like that we offer at Pricefx can segment your customers, products, or transactions in ways you never thought possible, but without a strategy that information is simply data not insights.
The more complex your business is (and let’s face it, who is not noticing that doing business is becoming more complex by the day right now?) in terms of the number of products and diverse customer types and combinations of them, the more requirement exists to stay relevant with your organization’s pricing strategy. Things can potentially unravel in a heartbeat if your pricing strategy is neglected.
With the level of complexity in the current business world, unless you have infinite staff and technological resources, it simply means it is difficult to independently keep track of all the factors yourself. Numerous sales channels to balance (Bricks-and-mortar stores vs Ecommerce sales, in-store pick-up vs delivery etc.), how they arrive in the marketplace and what price to sell them at when they finally get there are all factors to manage.
A pricing software partner can assist in keeping your pricing strategy up-to-date and informed of what you need to know and how to react.
It is simply what they do 24/7/365.
Your pricing software vendor is too busy keeping your pricing tools sharpened and up-to-date and simply can’t stay on top of the strategy too.
For example, if you need to check the business and tax regulations in Estonia where you have just begun doing business and how they will affect your organization’s pricing strategy, the chances are that your pricing strategy partner will know exactly the answers you are looking for. As they deal with similar matters day in/day out they have probably dealt with that exact issue ten times before this month. Your pricing software vendor has probably not.
Speed is of the essence in the current pricing strategy environment and getting answers from an expert is paramount.
3. General Pricing Expertise of Consultants & Pricing Software Partners
The world of pricing has moved on immeasurably from simply having a couple of guys in your back office running lines of pricing data through Excel spreadsheets. Those times for most companies have come and gone. It’s not all about strategy either, the software technology to do the pricing job is complex and takes patience, time, prior knowledge, and expertise to implement on the path to becoming a seamless, yet critical component of a smooth-running pricing tech stack.
Many companies think that it’s all about the strategist partners and forget the nuts and bolts of the pricing jigsaw puzzle. Sure, no doubt strategy is critical, but piecing together all the components of your pricing software technology puzzle (data science and analytics components, CPQ (Configure Price Quote) functionality, price optimization tools, rebate management etc.) will ensure you are not trying to put out a pricing fire emergency with a hole in your bucket.
Because many pricing consultants have both the strategy and implementation strings to their bows, for you, it simply means a ‘one-stop’ total practical knowledge and service packet that your pricing software vendor does not possess.
4. Niche Industry Expertise of Consultants & Pricing Software Partners
If you are a manufacturer, distributor, retailer, or an airline, regardless of your specialist field, you will want to do business with a pricing strategy expert who understands the nuances of pricing in your chosen field of business.
As pricing software companies are busy with producing the best technological solutions and tool sets to manage your pricing, it simply does not make sense for them to have the level or depth of industry expertise on pricing strategy as a strategy partner does.
A good pricing software vendor should be able to learn from a variety of industries, regions and go-to market strategies, and then apply those general learnings to your business.
Despite pricing software vendors having great broad pricing knowledge, more specific understandings of pricing in your industry might be better harnessed from niche industry pricing consultant or partner who works in your industry sector 24/7/365.
Okay, but Where to Find a Pricing Strategy Expert?
Now you know the top 4 reasons that pricing software vendors are not consultants and that there are professional pricing strategy partners that can supply you with the level of pricing expertise that you need.
Every pricing software consultant or partner can give you a range of divergent perspectives on different elements of your pricing. It may come as a surprise that many successful companies choose to have 2, 3, 4 or more pricing software partners to cover all elements of their strategy and implementations. Each partner or consultant has a different skill set and can bring their knowledge to bear to point your business in the right pricing direction, giving you more flexibility to transform your organization’s bottom line with data-informed optimized pricing.
If you’re a business looking for a price software vendor with a strong partner and consultancy focus across a range of industries and specialty areas of expertise, then learn more on this link about the Pricefx Advantage Partner Network.
On the other hand, if you are ready to move on and discover more about choosing the right pricing software for your company’s needs, check out this handy article;
About The Author
Steve Haskin has over 20 years of progressive experience in pricing technology and building and managing top performing global sales & marketing alliances. His background ranges from early-stage San Francisco startups to global enterprises. Steve has been with Pricefx for more than 3 years after 9 years in Private Equity. His first-hand knowledge of the benefits of a world class ecosystem has helped Pricefx build a unique affiliation of partners.