Enterprise Pricing Trends & Strategies to Watch in 2024

For enterprise-level businesses, 2024 presents several challenges and opportunities, with new applications of advanced AI technologies, signs of stalling inflation, and unfolding unrest in many parts of the world among them. Against this backdrop, what pricing trends and strategies should businesses be mindful of and use to maintain their competitiveness?

Here at Pricefx, as the leader in enterprise-grade pricing software, we take pride in being in a constant state of listening and developing to enable companies to react dynamically to competitors and global uncertainties with our pricing solutions.

In this article, we’ll lay out the business landscape ahead of us in 2024 and break down a few key tactics that enterprise companies, like yours, can use to respond to these changes strategically in their pricing.

So, let’s dive in.

The Business Landscape Coming Into 2024

2024 will be a critical year for enterprise businesses as they navigate several key political, technological, and economic developments. So, what’s on the horizon for businesses in 2024?

Slowing Inflation

Inflation is falling in many parts of the world, with its largest contributing factors from the height of the pandemic and Russia-Ukraine conflict fading away. Despite indications of several rate reductions in 2024, interest rates remain high overall, with ongoing ambiguity regarding the timing and extent of these cuts – giving this year’s economic outlook a still-uncertain dimension. And while some companies are also signaling deflation, with recent announcements of price reductions, prices are likely not going back to pre-pandemic levels.

Geopolitical Uncertainty

The impact of recent geopolitical tensions, such as conflicts in the Middle East, is still early to predict. There could be disruptions in oil and energy markets, and, due to developments in the Red Sea, the movement of shipped goods to other parts of the world.  The upcoming global and US elections will also play a decisive role in how nations respond to these crises.

In addition, there’s currently a shift towards enhancing China’s manufacturing capacity in areas where it has not competed previously, which could significantly impact major economies and potentially cause substantial disruption.

AI Integration

Early last year, Large Language Models (LLMs) quickly made their way into the mainstream through apps like ChatGPT. In parallel, advanced AI systems like machine learning and neural networks have become nearly institutionalized in tech, including the introduction of GenAI capabilities in various platforms, further enhancing user interactions and offering a more conversational experience.  It’s no question that advanced AI is at the top of the agenda this year for any enterprise, and it’ll likely stay there for a while.

Sustainability Concerns

2024 continues to be a year marked by consumer and regulatory concerns for sustainable production. To remain competitive and compliant, enterprise businesses will need to find creative solutions which enable them to integrate sustainable practices into their business models profitably.

Skilled Labor Question

In many industries, particularly manufacturing, the skilled labor shortage persists, and increased investments in internal training programs, diversity initiatives in hiring, and automation should all play key roles in the upcoming year for addressing this ongoing issue.

Now more than ever, businesses need flexibility in their pricing to adapt quickly to the uncertainties unfolding in global markets and within their own industry – from the data sources they use to inform pricing to the kinds of pricing strategies they implement. In the next section, we’ll explore what that could look like in practice.

Our Tips to Prepare Your Pricing for Success This Year

In a business landscape marked by equal parts excitement and uncertainty, how can enterprises respond to these developments strategically in their pricing in the year ahead? Here are a few tips to have in your back pocket as you move forward.

1.   Look to the Past for Answers, But Don’t Get Stuck There

Identifying optimal prices for your products is often a balancing act between what your customers are used to paying in the past and what is profitable for your business in the present.

This is especially important to keep in mind when using artificial intelligence for your pricing, like machine learning, which looks to your data for answers.

However, exclusively using historical prices to train pricing algorithms isn’t enough. When the past is defined by underpricing, inconsistent pricing logic, or pricing strategies that are no longer relevant, and pricing AI replicates these patterns in its projections, pricing AI driven by historical sales data alone won’t provide the path toward more profitable outcomes.

To complement your historical sales data, you should also pull in third-party data with web scraping tools, especially when implementing competitive or value-based pricing strategies or pricing new products or parts without a point of reference. Ultimately, it is the synergy between data and pricing strategy that truly drives successful pricing decisions.

Diversifying your data sources is a key ingredient in enabling more informed pricing decisions that combine what you’ve learned in the past with the latest market insights, ultimately propelling your strategies forward.

2.   Focus on Long-Term Impact, Not Short-Term Wins

Understandably, sales professionals are motivated by winning deals. However, the drive to win can be harmful when it frequently results in prices that are out of line with a company’s pricing strategies. In practice, that often means pricing below the established floor price.

Winning deals shouldn’t require prices that are lower than what’s acceptable. In fact, “winning” is when your team can offer a price to customers that reflects, not undercuts, the perceived value of the product or service in the market.

Often, sales teams play an unconscious role in enabling inconsistent pricing. This lack of awareness is due in part to obscurity around the impact of their pricing decision-making on profit margins and a lack of consistent enforcement of the company’s pricing strategies from above.

In short, they can’t know when the price is right, or identify opportunities to improve it.

This year, make sure that your sales team has the analytical tools on hand to quickly visualize the profitability of each deal in negotiations. And, to ensure both sides benefit from reasonable (i.e., value-aligned) prices, incorporating a data-driven solution into the sales process would be beneficial. Guided by your pricing strategy, whether it’s cost-plus or something more dynamic, the solution will run through your historical and market data to uncover willingness to pay across customers and regions and present optimal prices to your sales teams.

This way, any time a deal comes across their desk, your sales exec can simply pull up the details, and the engine does most of the heavy lifting.

3.   Know What Your Goals Are (And What Progress Looks Like)

What is your business aiming to achieve in the upcoming year? The trick to realizing your commercial goals is to be clear about what they are in the first place, and make sure your pricing reflects that vision. And while this appears straightforward, in reality it’s much harder to get right.

Whether your strategy is focused on building relationships, increasing sales volume, or expanding market share, every transaction across the pricing waterfall should be well aligned in service of that goal. Any misalignment is an obstacle to your company’s profitability.

We can see this play out in rebates and discounts.  If the goals behind these incentive programs are unclear at the start or not reflected in their design, the wrong behaviors will likely be reinforced in the long term. A common oversight is neglecting the impact of off-invoice discounting, which can significantly affect overall profitability if not properly accounted for.

And, even when your company has a clear idea of its commercial goals and how its pricing supports them, without a means to measure progress, that plan is merely a paper exercise.

To measure success, make sure that your company has chosen the most appropriate pricing KPIs for its goals. And to measure them effectively, consider comprehensive analytical tools that your pricing and sales teams can use to evaluate the effects of their pricing decisions along the pricing waterfall, and make future adjustments when needed.

4.   Pricing AI Is an Industry Standard – Choose Wisely

In the past year, advanced AI has moved past its popular perception as a far-away future luxury toward being an industry standard, with enterprise pricing being no exception.

With pricing AI widely available, companies looking for pricing software will have to be discerning when choosing an AI-driven price optimization engine. When choosing, ask yourself what your company would appreciate seeing from its pricing AI engine. Is it looking for the most cutting-edge technology on the market? An intuitive platform designed to solve real-world problems? And, as your company expands, will it still be satisfied with the pricing AI engine as it is, or will it require the flexibility to bring its own data science into it?

Try not to get caught up in the “cool” factor of pricing AI. Instead, find out which solution is built to attend to your unique needs, and, before going with advanced AI at all, consider the level of visibility into the path to output you’ll need from it.

5.   Make Your Decisions with Data, Not Gut Feeling

In the past, your sales executives may have leaned on handshake deals and best-guess pricing to push negotiations along. But the phrase “data is king” is a cliché for a reason. Coming into 2024, does your current pricing process reflect this idea?

To navigate this year’s uncertain market landscape, your business should treat its sales data as its most valuable commodity in pricing decision making.  And with that, the integrity of this data becomes essential. Ensuring you’re capturing the correct data is critical for effectively optimizing your price waterfall and refining your pricing strategies.

Putting data at the center of your pricing strategies, made possible with tools from data-driven pricing solutions and web scraping, results in pricing that truly reflects what your customers value. From analyzing historical buying trends to uncovering the competitive positioning of your products, data-driven pricing allows your company to tap into a wealth of information, enabling sales teams to arrive at optimal price points (and have the support behind them to communicate those prices with confidence).

This Year, Build a Winning Comprehensive Pricing Strategy

Upon reading this article, our hope is that we’ve left you feeling a bit more confident in your pricing approach when tackling a promising but uncertain year ahead. To cover all future bases, make sure that your pricing strategy is as comprehensive as the business and market landscape is complex. Not sure how to do that?

Consider heading to our complete guide on building effective comprehensive pricing strategies below:

Happy Pricing!