Amazon Prime Day Postmortem: Should Retailers Compete?
Amazon Prime Day: Should Retailers Compete with the Giant? Retail behemoth Amazon does not release its sales figures for its annual discount extravaganza event, but the sales estimates alone are enough to make any fully grown retailer weep. And as many of you look over the numbers of this years’ Prime Days and plan whether to go up against the giant on their other major sales days; we’ve put together some things to consider for the next Prime Day event taking place in To compete or not to compete? That is the question and a painful one at that! There...
Choosing Pricing Software: What Questions Should You Be Asking?
Choosing Pricing Software: What Questions Should You Be Asking? Choosing a pricing solution is an important decision and a major commitment – one that has the potential to make or break your pricing efficiency and success. If you’re at the software vendor evaluation phase of your pricing digital transformation journey, you’ll have got past all the buzzwords and sales hype, and will be getting down to the nitty gritty of what each company can offer you and whether it will help you get where you want to go. You’ll have whittled down your potential vendor list to include only those...
What Is Value-Based Pricing?
What Is Value-based Pricing? When it comes to sales and profit scalability, pricing is the real fulcrum. Developing a strategy for pricing helps brands maximize profits and market demand, among other factors. Simply put, a pricing strategy is an approach you can use to determine the best price for a product. Pricing is hugely influenced by various market indices, such as production, competitors’ pricing, and target customers. More often than not, sales executives need to account for the pricing strategy due to factors such as business objectives, revenue goals and product positioning. Researching your current market can help provide...
Is Managing Value Perception Essential in the Manufacturing Industry?
Why Is Managing Value Perception Essential in the Manufacturing Industry Warren Buffett once said, “Price is what you pay; value is what you get”. Value can be seen as everything in sales. You’re no longer just buying an item, or thousands of items as the case may be. You’re paying for the value that purchase provides you with. The opportunity for increased business, the improvement in efficiency in your processes, the reduction in cost or rework, the added features your product or service will have that will enable your organization to expand to new markets, or maybe even all of...
How Fair Is the Expectation That Digital Transformation Will Revolutionize the Chemical Industry?
Can Digital Transformation Revolutionize the Chemical Industry Where It Counts? Success or failure within the chemical industry lives or dies on any given business’s ability to adapt and revolutionize. If your business is merely riding the waves, trying to stay above water, it’ll soon be falling by the wayside. Only by driving ahead and revolutionizing your business will you see true success. One way in which many businesses believe they can achieve this revolution is through digital transformation. The integration of digital technology through all areas of business is increasingly prevalent throughout the chemical industry. With that, it’s becoming more...
5 Ways B2B Manufacturers Can Successfully Adopt B2C Strategies
How B2B Manufacturers Can Successfully Adopt B2C Strategies Over the last few years, we’ve seen a wave of B2B companies adopting some of the profit-driving strategies of their B2C cousins, and to great success. Let’s explore some of the growing trends. 1. Skipping Steps in the Value Chain Traditionally, customers who wanted to buy direct from manufacturers were politely but firmly turned away. But with the growth of e-commerce and platforms like Amazon, Direct to Consumer (D2C) selling has become an opportunity for manufacturers to connect directly with their end customer. Today, customers do their research. Not only will a...
Pricing in Excel: Retail & eCommerce’s Very Own Black Box of Despair
Pricing in Excel: Your Very Own Black Box of Despair I know, I know. Everyone these days is harping on about why you should be promoting your pricing out of Excel into some new fancy bells-and-whistles solution. But to those of us passionate about pricing and helping retailers achieve pricing excellence, it just happens to be a fact: pricing in Excel is holding you back in ways you may not even be aware of. Not because it is bad software – it’s excellent at doing what it was designed to do – but because no one could ever have imagined...
Essential Industry-relevant Benchmarks and Standardized KPIs for Pricing Success
Essential Industry-relevant Benchmarks and Standardized KPIs for Pricing Success While theories about how price affects the market, response go back to John Maynard Keynes in the 1930s, Pricing as a professional discipline has only really been a topic of conversation since the early 1990s. Since then, pricing professionals have been playing catch up to mature procurement processes and capabilities. The challenges have been both internal and external – few companies have had the data to measure their own performance, and there has been no objective source of truth to help executives really know what good pricing looks like. Even 30 years later, Pricing is often considered a...
Pricefx Named a Finalist for 2021 SAP® Pinnacle Award in the Partner of Year – Endorsed Apps Category
Pricefx Named a Finalist for 2021 SAP® Pinnacle Award in the Partner of Year – Endorsed Apps Category For the second year in a row, Pricefx is recognized for world-class technology innovation, customer success and market traction Pricefx, the global leader in cloud-native pricing software, today announced that it has been recognized by SAP as a finalist for a 2021 SAP® Pinnacle Award in the Partner of the Year – Endorsed Apps category. This award recognizes an SAP partner that has created a world-class SAP endorsed app that complements SAP technologies and has contributed a significant amount of value to...
How to Price in Alignment with Key Business Objectives Using Market Simulation
Pricing in Alignment with Key Business Objectives Using Market Simulation Traditional price optimization helps you maximize profit on your products based on price elasticity derived from historical sales transactions. The problem is that it calculates the optimum price for individual products without considering the wider impacts of a price change. Let’s say that your traditional price optimization software recommends a change of price to product A, showing a potential uplift of 10%, and another on product B, showing an uplift of 15%. It’s fair to assume, therefore, that if you applied the suggested changes to both products, you’d see a combined increase in profit of 25%. Alas, the fact is that applying price changes to two products at the same time could actually result in no change or even...
How to Reduce Overhead and Risk in the Chemical & Process Industries
Reducing Overhead and Risk in the Chemical and Process Industries Today’s CFO encounters ever-increasing complexity in addressing the subjects of risk and overhead in the chemical and process industries. Typical risk factors include: Earnings volatility Cash flow Accurately projecting earnings in the face of business uncertainty Efficient and effective use of capital Exchange rate exposure Hedging to address raw material and currency volatility Many overhead factors contribute to complexity in today’s market. Some that capture the most attention are: Inventory and work in progress Selling and administrative costs. Investing in a pricing solution like Pricefx helps you address overhead and...
Stevie Awards Manufacturing Solution Business Award Winner: Pricefx
Business Solution for Manufacturers: Pricefx Wins Stevie Awards Pricefx has just been awarded the Silver Stevie® Award in the 2021 US Business Awards® in the category of manufacturing solution. The award was determined by the average scores of judges comprising of executives from around the world. Out of the over 3800 submissions, we’re proud of the fact that experienced leaders view Pricefx’s solutions as drivers to help manufacturers leverage pricing opportunities within their organization. Last year, Pricefx won 2 Stevie awards, making this the third award in two years. A Little About the Stevies: The American Business Awards are the U.S.A.’s premier business awards program. All organizations operating in the U.S.A. are eligible to submit nominations – public and private, for-profit...
Pricing: The Real Differentiator in a Commodity-Driven Business
Pricing: The Real Differentiator in a Commodity-Driven Business Commodity-driven businesses are challenging to run successfully. Price transparency is high, and value differentials versus competition are low to non-existent, driven primarily by service differentiation. Earnings and margin targets are heavily impacted by volatility in underlying raw material and energy costs. As well documented by many consulting firms, price is the biggest lever available to a company to address earnings improvement, with far higher leverage than cost reduction or increasing volume. Additionally, most commodity-oriented businesses are mature and the temptation to improve business by seeking additional market share or volume simply leads...
The Next Evolutionary Step in Price Optimization: Market Simulation
The Next Evolutionary Step in Price Optimization: Market Simulation We’re delighted to be releasing Bijou 7.0 this week and to announce its substantial number of usability improvements for even greater efficiency. (More on these below). But we’re most excited to tell you all about our pièce de résistance: Market Simulation. Market Simulation: The Game Changer for Business Cannibalization is the biggest hidden challenge companies are facing today because most algorithms pretend that changing the price of one product won’t impact the sales of another. Harsh is the lesson that teaches that applying “optimal” discounts to two products at once (hoping...
Pricefx Next Gen: How Students Used Pricefx To Uncover Key Profit Drivers
How the Winners of the Simon Pricing Club Case Competition Used Pricefx To Uncover Key Profit Drivers Our rapidly evolving digital landscape means business students must be able think critically and adapt quickly to change. Partnerships between business, technology and academia are vital in preparing them for the challenges they’re likely to face in the real world. The world-class Simon Business School at the University of Rochester is dedicated to putting real-world technology into the hands of its students in order to better prepare them for careers with companies using modern, digital approaches to compete. That’s why Pricefx has once again partnered...
How to Protect Your Margins in a Competitive Landscape (Chemical Process Industry)
How to Protect Your Margins in a Competitive Landscape Consider recent news headlines from the Wall Street Journal, reflective of ongoing change in the COVID landscape: March 18, 2021 – Oil Prices Fall on Fresh Fears of Dwindling Demand “Oil prices fell more than 7% on Thursday, recording their biggest one-day drop since September…” March 24, 2021 – Leap in Gas Prices Puts $3 a Gallon in Sight “Some analysts see further gains ahead…Booming gas prices join a recent rally in other commodities…Supporting gasoline’s climb is a rebound in crude-oil prices and a big drop in the amount of...
Why E-commerce Is NOT a Threat to Retail
Is E-commerce Is A Threat to Retail? Not Unless You Allow it to Be. When Amazon and eBay launched in 1995, the disruption to traditional retail stores was immense. Retail music chain Tower Records and Borders bookstore went bankrupt, Musicland was sold and Blockbuster couldn’t survive. But old-fashioned brick–and–mortar retail still offers buyers a unique opportunity to try on, test out or physically feel the product they’re about to buy. The offline shopping experience can be therapeutic and social, and a growing attitude for ‘shop local’ gives hope to smaller retailers across communities. However, the unexpected events in 2020 only...
How to Determine Proxies for Pricing and Build Value in Your Products
Steps to Determine Proxy Pricing in Aftermarket How does your business determine proxy pricing for aftermarket sales? With some organizations holding thousands of products that have been developed over decades, it can be difficult to determine their real pricing power, not to mention your position in the market for said products, if any. For example, when you have customers seeking parts for machinery 10 years old, how do you begin to determine pricing? How does your competition factor in? What say does brand value have? Does it come down to win and loss? There are some key variables to consider...
Price Optimization in the Food and Beverage Industry? Oh, Yes!
Price Optimization or F&B in 3 Steps As a company in the Food and Beverage industry, you know that your product portfolio, types of customers, and regions served change and grow along with you. Blanket pricing doesn’t work, but the more complex your organization becomes, the harder it is to optimize prices according to product type, customer behavior or region. And if your margins don’t reflect that New Yorkers go crazy over bagels, that plant-based nutrition and local produce are trending, or that tariffs on exports to the UK are now dearer than to Ireland, you’re not optimizing prices. Optimizing...
Manage
Pricing with Excel… and Other Ways to Lose Money
How to Plug the Leak and Stop Losing Money With Excel In 2003, Canadian power generator, TransAlta, lost $24 million due to copy-and-paste mistakes. Two years later, Kodak added $9 million to its third-quarter loss due to a typo. And in 2012, JP Morgan lost $6 billion due, in part, to a copy-and-paste error in Excel. Statistics have shown that 88% of spreadsheets contain significant errors. So out of 10 spreadsheets, only one is showing you accurate data. Do you really want to manage pricing off that? Unfortunately, all too frequently, a decimal place can be the difference between an...
The Keys to Reducing Cost and Risk in the Food and Beverage Industry
8 Pricing Essentials for Reducing Cost and Risk in the Food and Beverage Industry Have you been struggling to mitigate costs and control risks in an attempt to reach margin targets? Are you, like many, still using cost-plus pricing methods, where price execution is based on static rules or formulaic price calculations that aren’t updated in real-time and are, therefore, unable to respond to changing market dynamics? Are your pricing deviations often inconsistent, meaning pricing can’t be optimized according to customer willingness to pay? Is ad-hoc trade spend based on gut feeling rather than data-driven insights, leading to uncertain revenue...
Introducing Pricefx Plan, Price and Profit
Clarifying Our Offering and Doubling Down on Our Commitment Leonardo da Vinci believed that simplicity was the ultimate sophistication… and so do we. That’s why we’ve significantly simplified our commercial offering, letting the true advantages and benefits of being a Pricefx customer shine through of their own accord. We’ve sharpened our focus on the challenges you face every day and clarified how our solution can help you overcome them. So, What’s New? A Simplified Three-Package Offering Our new commercial model now clearly segments our offering into three stackable packages that empower you with agility, data–driven productivity and profitability at every...
Premiumization: How Smart Brands Become Category Leaders
How to Premiumize Your Brand and Become a Leader Things are shaking up for the Consumer Goods industry. COVID has resulted in many categories taking a tumble, thanks to the shift away from restaurants and toward retail, where supplier margins are often considerably smaller. Retailers are now trying to eke out every little bit of profit they can, which is creating long-term threat to suppliers. To make matters worse, suppliers are not allowed to influence retailer shelf prices in Europe. The antitrust laws set by the European Commission were put in place to protect consumers from over-inflated prices and they...
What Are the Real Differences Between Retail and eCommerce?
The Differences Between Retail and E-commerce Retail and e-commerce. Two titans that have been battling it out for some time now. They’re Batman vs Superman. Batman, the tough and down-to-earth brick-and-mortar stores doing their utmost to stay relevant in a changing world. Superman, the otherworldly e-commerce game-changers evolving how we sell and purchase. Or at least, that’s how it may seem. The Beginnings of E–commerce It started in the 1990s when Amazon, Alibaba, and other e-commerce giants raised their heads. Since then, they’ve been rapidly growing and altering buying habits on a global scale. Gone are the days of visiting several stores...
Insight
How the Consumer Goods Industry Can Learn from 2020 and Prepare for 2021
How the Consumer Goods Industry Can Learn from 2020 and Prepare for 2021 While a lot of other sectors had to scramble to meet profit and margin goals last year, some sub-sectors within the consumer-packaged goods industry had other problems to contend with. As we head further into 2021, let’s take a moment to look back at 2020 to see what lessons can be learned from the year and what opportunities and trends await us in 2021. We asked Andreas Broutas of TGN and John Kuffel, solution strategist at Pricefx, to enlighten us, and here’s what they had to say: ...
The Key to Keeping Customers Happy in the Chemical Process Industry
The Key to Keeping Customers Happy in the Chemical Industry In this article, we’ll explore what makes pricing in the chemical industry uniquely complex, why companies are often dealing with thousands of price points, the impact of ever-changing input costs and discover the key to winning more opportunities while protecting the bottom line! Pricing in the chemical industry is more complicated than for other industries as you often have complex product portfolios and customer pricing is often negotiated individually. This pricing can come in the form of spot or negotiated pricing for customers, or indexed or formula pricing for...
Flexible
Subscription Pricing with Patrick Campbell (Pricing Matters Video)
Gabe Smith of Pricing Matters interviews Patrick Campbell, CEO of Profitwell, to discuss subscription-based pricing, Slack’s pricing strategy, pricing based on what the customer will accept, and more.
Fast
COVID-19 and the Pressure of Digital Transformation in Pricing
COVID-19 and the Pressure of Digital Transformation Pre-COVID, most companies were in the early stages of ambitious digital transformation programs, but now they no longer have the luxury of time. In just a matter of months, digital adoption has been thrust forward several years. Digital initiatives that companies have been eternally putting off have become the top priority, albeit adapted through the lens of the “new normal”. Adopting a Through-Cycle Mindset to Change While it might feel counterintuitive to invest against a backdrop of plummeting revenues, missed budget estimates, higher costs, and strained employees, technology and infrastructure, this is precisely the right time to advance your digital agenda. While some CEOs...
Realize
How to Structure Compensation Plans to Drive Sales Performance
Managing Compensation Plans That Drive Sales Performance The companies with the highest employee morale and productivity pay a mix of salary and incentives. Financial incentives beyond base pay include commission, overtime, bonuses, profit sharing, stock options, benefits (insurance, vacation, leave, etc.), but what about the other “softer” forms of compensation that drive sales productivity? There are plenty of ways to restructure your compensation plans to motivate sales teams, maximize productivity, and retain employees and customers. Many can be achieved without spending a penny. These often-ignored methods, explored in detail below, provide real-life solutions for extracting the best performances from each...
Friendly
Doing Good Vs. Making Profit: Do Businesses Have To Choose?
Can You Make a Profit While Doing Good? This article, by Gabe Smith, was originally published on Forbes.com As businesses strategize and execute on creative ways to segment customers and products, price dynamically and increase profit, some cross lines and spark moral and popular outrage. The recent headlines of price gouging of sanitizers, cleaning products and paper goods are good examples. In fact, they arrested a man a few blocks away from my house for selling these items on the street corner. He charged $5 a roll for toilet paper. Though some economists argue that there is no such thing as price...