Advantages of Pricefx Optimization and Management Software
Anyone who is anyone in the world of pricing has probably heard about the surge pricing dilemmas of ride-hailing platforms and some of the pricing miscues that ‘Gig Economy’ companies have made in recent years. Most dramatically, back in 2017, Uber charged a man in Toronto, Canada $14,400 US for a 20-minute ride. Of course, Uber eventually refunded the passenger for his ride, but not until they identified a severe problem with their high demand, rush hour price ‘surge multiplier.’ Operators like Lyft and others have also experienced similar issues, despite spending millions of dollars and thousands of man hours on custom developed pricing algorithms. These types of errors can be easily avoided by leveraging the advantages of Next Gen price optimization and management software to put constraining price increase and decrease rules in place, all the while protecting profit margins and tracking competitors’ pricing.
Furthermore, modern, easy-to-use pricing systems can help you simulate the impact of changes before making them live. These Next Gen pricing systems can also optimize your prices and facilitate increases of 1-8% of sales in pure profit using big data. Using the combination of AI (Artificial Intelligence) and ML (Machine Learning), algorithms and constraints like percentage increase caps and profit margin floors, accurate, realistic, and competitive prices result.
At Pricefx, we’ve spent the last decade using our AI and ML driven Next Gen pricing optimization and management software to assist hundreds of companies to unlock their unique market advantage by setting and managing prices in real-time.
If your company is interested in discovering price optimization and flexibly adapting your approach to meet the pricing challenges of the market with advantages of Next Gen price optimization software, check out its competitive advantages in the Pricefx model below.
What is Next Gen Price Optimization and Management Software?
Next Gen Price Optimization and Management Software such as that provided by Pricefx allows for a fully integrated pricing solution born into the cloud. But what does being a native cloud pricing solution mean?
It means there are no hardware, maintenance or upgrade costs. There is little upfront investment to worry about so you can test it out much easier and sooner. And once you’re there, you only pay for the resources you actually use. Nothing is wasted or becomes redundant and you’re always on the latest version of the software – cost-free of upgrade costs.
What is First Gen Price Optimization and Management Software?
First Gen Price Optimization Software was initially built as ‘on-premise’ software. Newer versions of the First Gen pricing software models are known as ‘cloud-hosted’ as opposed to the ‘cloud native’ nature of Next Gen pricing software.
What that means is that a First Gen cloud-hosted solution can’t escape its on-premise past. New and existing customers usually pay for the cloud-hosting shift with hidden management and upkeep costs.
For existing customers, for a legacy pricing software provider to migrate from on-premise to cloud-hosted solutions will require the abandonment of all the large upfront capital investments initially made to cover hardware, server installation, storage and the software itself. Additionally, the full re-implementation of the original solution in the new environment will not come cheap or easy.
Who Needs Next Gen Price Optimization and Management Software?
They are several unique reasons to choose to take the advantages of Next Gen pricing software over others. Equally, there are also reasons not to.
If you are a large-scale enterprise business with extensive and diverse product lists and disparate customer sets, operating interstate or even internationally, and looking to incorporate rebate and quote management into a less labor-intensive, flexible, and future-proofed price optimization solution, (or any sine one or combination of those factors), then Next Gen pricing is precisely what you’re looking for.
Who Doesn’t Need Next Gen Price Optimization and Management Software?
On the flip side, if your company has only a few products, stoic prices, operates in a single region and you prefer to manage your pricing with manually generated Excel spreadsheets, then perhaps a modern Next Gen AI-and-ML based pricing software solution may not be exactly what you’re after, nor best suit your business’ needs.
In addition, if you are responding to complex RFPs for very large and specific projects, like a call center for example with service offers catered to your clients and incorporating many 3rd party products and services into them, this software might not be a good fit.
The Top 7 Competitive Advantages of Next Gen Price Optimization & Management Software
Now, we have established if your business is suited or not, let’s examine the top 7 advantages of Next Gen price optimization and management software such as that offered by Pricefx, for example, and how it can help you become a more profitable and streamlined modern company:;
- Speed to Implement
- Flexibility of Next Price Optimization & Management Software
- Lower Total Cost of Ownership (TCO)
- A Complete All-Round Price Optimization Solution
- Better Return-To-Investment (ROI) Time
- Compare Your Business Against Competitors
- Partner Ecosystem
1. Speed to Implement
To provide added value to customers and enable fast time-to-value, Next Gen pricing software allows for standard ‘out-of-the-box’ implementation at lightning speed.
The technology that allows that to happen is specifically designed with the end-user like you in mind.
Designed for use in the User Interface (UI), your Next Gen pricing software can be implemented quickly by your current staff without any need for a pricing scientist. Given the ‘no code or low code’ native cloud technology, little to no technical knowledge is required to implement. Your regular IT staff can be trained to implement the Next Gen pricing software quickly.
Being a multi-tenant scalable solution, it allows clients to run sophisticated pricing software immediately while spending less money. Moreover, tenants don’t need to maintain the infrastructure or train inexperienced staff, allowing them to save money and resources on storage, hardware, and maintenance costs.
2. Flexibility of Next Gen Price Optimization & Management Software
As Next Gen pricing software is designed ‘from the customer’s needs up,’ rather than prescriptively from ‘the pricing vendor down,’ inherent flexibility is built into the system. Straight out of the gates, the data used in the software will come from you, the customer. And it will be informed through AI & ML that works in the real world. Utilizing this form of ‘data-first’ design, Pricefx takes your data, ingests it, and creates your pricing model quickly.
Given that data can be fed into the Next Gen pricing software quickly, it also assists in short implementation timeframes.
Using APIs (Application Program Interfaces), outside data sources such as Index data (for manufacturers using raw materials), Google Maps (to calculate more accurate distribution time and costs), weather data, competitors’ data and other cost drivers can be fed into the pricing software quickly and easily to allow for flexible use.
New pricing ideas, strategies and business requirements can therefore be implemented at speed.
Other forms of pricing technology usually constrain the user’s imagination or require costly technology rebuilds to implement new business needs.
Therefore, Next Gen pricing software contains inherent unlimited potential for transforming business vision in a different direction and considering future profit imaginings.
3. Lower Total Cost of Ownership (TCO)
Pricefx Next Gen pricing management and optimization software’s low TCO costs are built upon being a multi-tenant platform as we discussed above. What that means is, with its native cloud-based architecture, the Pricefx can be operated as an independent self-service system with minimal maintenance costs.
New pricing models and shifts to different pricing strategies can be done in-house by your own staff. Never fear, if there is a change required that is beyond your staff’s comfort zone to execute, Pricefx will assist. But your staff will be trained to know how to execute it next time.
Significantly less ongoing maintenance and subscription costs in addition to the low initial implementation costs all make Next Gen pricing software TCO lower than the first-generation pricing software models.
4. A Complete All-Round Price Optimization Solution
Next Gen pricing software delivers a 360-degree view of pricing – from list to gross to net – including advanced data analytics and AI-ML based optimization, and it does so in several ways.
The price optimization enabled by the technology allows for pricing to get as real-time and as precise as possible. It’s a level of business agility that can easily adapt to changing market conditions that may shift multiple times per day (such as raw material indices like oil or gold). The AI-ML employed can be as dynamic as your business requirements dictate, even allowing for price fluctuations in real time if the need arises.
What’s more, the Pricefx Next Gen pricing software technology is what can be called a ‘clear box’ approach.
What that means is that the entire system is open, transparent, and accessible with full reasoning for price shifts clearly provided for you as the end user.
First generation pricing software models where the reasons for price changes are ‘black box’ (not always clearly known, interpretated nor understood without the assistance of a deep analytical dive from a pricing scientist) provide no clear explanations to the client.
On the other hand, the ‘clear box model’ provides transparency and therefore, confidence in the pricing software.
Price optimization can be built upon multiple constraints from multiple sources all in real time with Next Gen pricing software. By this, understand that rules like targeted gradual price mark-ups over time rather than total price mark-ups can be implemented (for example, 5 x 1% price increases rather than 1 x 5% price increase). Or if you want to institute a rule to always price your in-house brand product 10% less than a national brand, that is possible too.
Set your pricing objective and go after it!
It’s what is widely referred to as ‘Real World AI’ or ‘Pragmatic AI.’ With this technology, scenarios like the above-mentioned Uber pricing disaster can be avoided as restraints on price-gouging can be built-in as a rule. It can therefore be used as a method to clarify to your customers that your pricing is democratic and fair. No more unclear and mysterious over-pricing where bad data becomes confused and makes curious and impossible to defend decisions.
The possibilities of the Next Gen AI-ML pricing software model are quite literally endless. It can even be used to balance and create rules to allow for multiple pricing objectives from different departments within your organization to run concurrently!
5. Better Return-To-Investment (ROI) Time
Due to its abbreviated time to implement, minimal maintenance costs and greater value through increased capability over first-gen models, Next Gen pricing software has a markedly shorter ROI time.
Number 1, with Next Gen software you will be getting a higher return in general, but leave that important detail aside for a moment. With lower TCO and faster time to implement and therefore bringing value faster, you will be seeing 49% faster ROI breakeven as compared to the three leading first gen pricing software companies*(G2 report Spring 2021).
6. Compare Your Business Against Competitors
Unique to the Next Gen pricing solution offered by Pricefx, the Plasma tool provides industry-level benchmarking to B2B enterprise companies that need to develop strategic insights in their pricing processes and performance compared to companies like them in terms of scope, industry, size and regions.
Plasma gives organizations a unique business advantage to improve their pricing strategy and execution by scientifically measuring their pricing performance against their competitors.
Laying the foundation for a data-driven assessment of developing opportunities and target setting, Plasma does away with guesswork, anecdotical evidence, and poorly defined benchmarks in assessing pricing. A set of more than 20 market-relevant performance KPIs reveal insights into industry pricing and assist in measuring your pricing performance against competitors or even between different departments in your own organization and track your performance over time.
7. Partner Ecosystem Enables Increased Networking Opportunities
Finally, as an additional value point for Pricefx customers, the company provides exclusive marketing and sales resources to help your business expand your client base. Through special product updates, training, shared one-off events and expertise, Pricefx assists you to unlock your businesses’ unique advantages.
Live, instructor led, and on-demand training programs are available for all partner education, designed to help you maximize and enhance the business objectives that you are seeking with Pricefx Next Gen pricing software.
This Sounds Great, But How Much Does Next Gen Pricing Software Cost?
Okay, now you’ve had a perfect opportunity to assess if Next Gen price optimization and management software is what your business is looking for or not. If not, don’t worry, we will not be offended, but we’re happy you are now aware of what it does.
You’ve read above that Next Gen pricing software offers far quicker ROI on investment than its first-gen cousin. However, you still will want to know what the bottom line is and if your organization can afford the upfront outlay.
At PriceFx, we know intimately how powerful Next Gen pricing software can be in helping companies achieve their unique set of business objectives, but understand too, that the initial outlay is also critical.
To help you decide, check out our recent blog article on the expenses involved;