About the Customer
A large commercial aftermarket supplier had been losing market share and had identified their weak and outdated legacy pricing software as the leading cause of this decline.
They needed a predictive pricing model that would take a range of external factors into account when calculating prices to boost the division’s win-rate and better meet the needs of its customers.
Time to Trade in the Old Model
Through its offering of logistics services, the firm generates billions of dollars in annual revenue and transported millions of vehicles in 2018. But more recently, the division had been struggling, steadily losing market share due to pricing errors and inconsistencies – either pricing too high and losing out on deals, or too low, leading to unsustainable margin squeeze.
Their legacy pricing software was too simplistic for the division to maintain its edge in an increasingly competitive marketplace, lacking the intrinsic flexibility required to react quickly and decisively to external market conditions.
They needed a solution capable of closely monitoring external variables (weather, historical win rates, competitor-led data) to formulate and quote prices that would not only maximize win rates but profit, too.
They were also seeking greater automation in their bidding and quoting process. With over 2 million transactions annually and upwards of over 5,000 carrier partners, manual processes were slowing everything down and inviting errors. Even the slightest bottleneck risked creating a bid backlog that could spiral out of control.
A Digital Transformation with Sky-high KPIs
Pricefx worked closely with the firm to identify key success metrics for the transformation:
- Margin Uplift:
- Shore up margin leakage using external data of the conditions that guide customer buying decisions, and enhance uplift opportunities with deeper insights.
- Increase Market Share:
- Accelerate and automate current manual processes to optimize pricing and quoting processes for success.
- More Accurate Pricing:
- Improve pricing reliability through an optimized predictive pricing model that brings renewed confidence to the sales team.
- Improve Win Rates:
- Boost win rates by reacting quickly and decisively to external market conditions with accurate pricing.
Turning External Data into Accurate and Optimized Pricing
Pricefx delivered the firm a fully optimized pricing solution that closely predicts a customer’s willingness to pay based on a wide range of factors and variables (including seasonality, car size, and make and model) to better align them with market demand.
This improved the win-rate.
Price accuracy was significantly enhanced through the pricing system’s integration with Google Maps API, which accurately calculates lane distances. And Pricefx PriceBuilder was used to carefully manage prices, with guidelines, calculations, and simulations that help maximize margins on every deal and stamp out any underpricing.
PriceOptimizer took things a step further, using machine learning and data science to test and optimize pricing strategies against different segments, volumes and margins. And PriceAnalyzer provided highly detailed but user-friendly analytics and deep insights into areas of potential margin uplift and price increase opportunities.
The entire pricing infrastructure also integrated seamlessly with Salesforce.
Whether an agent was dealing with a customer or an automated web inquiry, the system amplified speed, precision, and profitability at every level.
Success on a Grand Scale
Pricefx and its customer are both companies built on innovation, actively seeking new and practical ways to meet the needs of their customers. It comes as little surprise, therefore, that the two teams managed to foster a collaborative relationship so strong that the entire project was delivered in under five months – no easy feat considering the size of the firm!
The cloud-native nature of the solution means that pricing data is available immediately across the organization, boosting agility and accuracy. And the system is continuously learning and improving – the more data it processes, the more intelligent it becomes.
Leveraging Pricefx’s sophisticated pricing solutions, the firm was able to deliver on its KPIs. It has achieved intelligent pricing informed by external market conditions, clawed back market share, and seen its win-rates soar.
And this is only the beginning.