How Pricefx Generative AI Can Augment Your CPQ Experience

In a groundbreaking move revolutionizing the pricing industry, Pricefx, the unrivaled leader in cloud-native pricing software, has unfurled its integration of cutting-edge Generative AI (GenAI) capabilities into its acclaimed pricing platform, in 2024. This innovative addition promises to usher in a new era of user experience by introducing conversational interactions for pricing professionals, marking a significant leap forward in simplifying user interactions on the Pricefx platform. But have no doubt, there are ways to potentially use the new Generative AI to potentially improve your organization’s CPQ Performance.

For more than a decade, Pricefx has been at the forefront of pricing AI, continuously investing as the technology grows and evolves. From machine learning and neural networks to agent-based AI and now Generative AI, we continue to pursue AI innovation to drive value performance for our customers. As the world’s leading enterprise-grade native-cloud pricing software vendor, we take immense pride in using the power of innovative technologies to help solve top-line business problems and boost profits and growth for our clients.

While *ChatGPT and similar GenAI technologies appear as a “revolution” in AI software because of their sudden emergence into mainstream adoption, we view them as a natural and exciting evolution of AI.

 

GenAI perfectly fits in both our experience and vision of using multiple algorithms and AI approaches as they become available. In fact, Pricefx uses the same models that power large language models (LLMs) today to complement other AIs in our product similarity accelerator.

 

Given that in 2024, Pricefx is launching a new set of product-integrated GenAI capabilities as an important next step in our AI evolution, we are taking this moment to advise how our new GenAI capabilities can help in augmenting your Pricefx CPQ Software use*Other company trademarks mentioned in this article are owned by those companies and not by Pricefx. References to them are not intended to suggest affiliation with or endorsement.

 

Nothing in this article is intended to suggest any affiliation with or sponsorship by companies other than Pricefx.

In this article, we will embark on a journey to define exactly what GenAI is (and isn’t) and how our new set of GenAI capabilities will  add complementary pricing insights and business efficiencies to the performance of your company’s Pricefx CPQ Software.

What Generative AI is (And Is Not)

Let’s demystify what GenAI is and is not and shed some light on its transformative potential. Imagine a tool that can understand and generate human-like text, seamlessly blending creativity with artificial intelligence.

At its core, GenAI is a large language model (LLM) trained on vast amounts of text from the internet. Unless you have been living under a rock, you have probably heard of any number of the GenAI tools out there like ChatGPT, Chatspot AI, Jasper AI, Perplexity AI or others that possess the unique ability to grasp the nuances of existing content and then generate new, original content. Think of it as a companion assisting you to write anything from engaging articles to chatbot responses with remarkable fluency.

Now, here is where it gets interesting for CPQ (Configure Price Quote) software users — GenAI differs significantly from predictive AI – the technology used in the price optimization function of your pricing software accompanying your CPQ system. While predictive AI excels at forecasting and recommending optimal pricing based on historical data and market trends, on other hand, GenAI takes the art of language generation to new heights. It can craft compelling narratives, generate human-like responses, and even assist in creative writing.

Using GenAI for numbers problems is like using a dictionary to solve a math problem when you should be using a calculator.

 

GenAI is like a ‘language calculator’.

 

It’s not about crunching numbers; it is about crafting the perfect words. That’s it.

 

It is NOT a replacement for the predictive AI of pricing software, AI Optimization nor CPQ software.

 

GenAI is simply another tool that we are building into our software, to help our customers price more easily and fluently and go about achieving their optimal business outcomes that outpace the competition – but doing it all with a minimum of fuss.

 

Learn more generally about how AI works in pricing software, read more about it in the article below:

And that is important and different, even in a world like pricing and CPQ, where data is king.

GenAI’s Creative Versatility

One of GenAI’s most compelling features is its versatility. It can adapt to a wide range of tasks, from writing poetry and stories to generating conversational chatbot responses. The key is that GenAI isn’t confined to a single niche. It’s a generalist, capable of assisting across various domains. For businesses, this means harnessing its creative prowess for content marketing, chatbots, product descriptions, and more.

In the realm of pricing software and CPQ, it is essential to acknowledge that GenAI and predictive AI are not in competition; rather, they are in symbiosis, each wielding its unique strengths in the technological landscape. Predictive AI excels in optimizing pricing strategies, thereby enhancing profitability and efficiency. On the other hand, GenAI brings its creative flair to content generation, elevating salespeople performance and customer interactions to a more engaging and human-like level.

In essence, GenAI does not only expand the horizons of AI capabilities; it also harnesses the power of natural language to simplify tasks for Pricefx CPQ users when executing day-to-day pricing, let them spend more time on pricing strategies, and get to value faster.

In 2024, Pricefx’ steady investment in AI will continue and we will introduce a new set of conversational Generative AI (GenAI) capabilities built directly into the Pricefx product and platform.

 

These will debut as an enhancement to our existing Actionable Insights Capability. Deploying a tailored and open source LLM technology, our GenAI Actionable Insights will enable a natural language-based processing and generation to create and serve prescriptive and predictive insights that users can leverage to quickly identify opportunities and risks that have the biggest volume, revenue, and margin impact for the company.

 

With Pricefx, GenAI LLM capabilities are also now part of our product Knowledge Base, enabling natural language chat-based search and discovery for the entire online training and education website for Pricefx products and services, and in our Product Similarity Accelerator to identify substitute products to upsell and cross sell.

In contrast, predictive AI in pricing software focuses on specific tasks—determining optimal prices, detecting market trends, and adjusting strategies accordingly. It’s brilliant at what it does but operates within a well-defined framework. GenAI, on the other hand, thrives in the realm of human language, where creativity and diversity merge.

Enhancing Your CPQ Use with the GenAI of Actionable Insights

Actionable Insights, a powerful feature within Pricefx’s arsenal, facilitates the seamless monitoring of chosen data sets while providing actionable recommendations to drive data-driven decisions.

By harnessing the new GenAI capabilities coming soon, users can effortlessly leverage natural language queries to automatically track data trends. For instance, setting up a new insight to monitor customer churn within a particular business unit becomes as simple as expressing it in everyday language. Furthermore, users have the ability to request recommendations for addressing specific business needs, enabling them to swiftly identify and act upon opportunities for improvement.

Using Actionable Insights in combination with your CPQ processes should revolutionize the way quotes are designed and negotiated. With its continuous observation of selected data sets and automated identification of opportunities and gaps, Actionable Insights will augment how you use your CPQ, by providing real-time insights and guidances.

 

By leveraging GenAI capabilities, users are also able to take unstructured data such as textual descriptions of products and derive structured metrics such as product similarity to improve upsell/cross-sell recommendations.

 

This helps companies to grow average order revenue and profitability by identifying broader profitable upsell and cross-sell options such as private label substitutes, other brands/sizes/bundles, etc.

Coming in 2024, by integrating chat-based interactions with Actionable Insights, Pricefx will significantly expedite the decision-making process. Users will be able to engage in intuitive conversations to curate insights and receive actionable recommendations tailored to their unique business requirements. This enhancement will not only enhance the efficiency of CPQ use but also unlocks a realm of alternative pathways towards achieving the company’s business goals.

Bring Previously Untapped Product Data to Your Fingertips

Complex competitive data, rich product descriptions, or other types of unstructured complex data used to once be inaccessible without loads of manual interventions and research in third-party systems. GenAI excels at interpreting natural language, including identifying structured attributes or connections between those. This can prove transformative for sellers or pricing managers who can now integrate new sources of data in decision-making seamlessly thanks to GenAI.

Leveraging state-of-the-art natural language processing and data analytics, Pricefx’s AI technology can analyze vast amounts of data to detect similarities between products.

Pricefx has embraced the power of GenAI to assist its customers in grouping products into families effortlessly, much like the way a chat engine intelligently separates and analyzes different text blocks.

The process starts by exposing relevant data to the underlying AI technology, much like a chat engine’s ability to understand text and identify similarities between various strings. Pricefx’s AI-driven approach allows companies to select transactional data, such as sales data, and define key attributes that determine product similarity. These attributes may include product descriptions, categorical information (e.g., product category, competitors), and numerical factors (e.g., price, cost).

Once the data scope and attributes are defined, the AI goes to work, weighing the significance of each attribute in determining product similarity. The system assigns similarity scores to assorted products, highlighting which items are closely related and could belong to the same family. By considering factors like label comparisons, shared attributes, and pricing proximity, Pricefx’s AI generates valuable insights into product groupings.

The Pricefx Product Similarity engine as it is known, powered by GenAI, can help to identify similar products from past deals, competitive data sets, or other scenarios and highlight these in CPQ, for example through upsell/cross-sell recommendations, alerts, or directly within pricing logics. This is a great way to further improve efficiency, automation, and quality of pricing.

With AI as a powerful ally, Pricefx enables going beyond manual maintenance or reliance on downstream information. Instead, businesses can leverage AI-driven product similarity scoring to achieve remarkable efficiency and accuracy in data management. This advanced technology equips companies with the ability to identify hidden patterns and group products based on shared attributes and customer preferences to enable more powerful quoting and pricing scenarios.

Of course, users have the freedom to adjust these settings, ensuring product groupings align with their unique business objectives.   

Augment Your CPQ Software Use With the GenAI-powered Pricefx Knowledge Base

The Pricefx Knowledge Base stands as the ultimate reservoir of information concerning the Pricefx solution, catering to diverse roles ranging from business users to configuration engineers. With the integration of GenAI capabilities, accessing this wealth of knowledge becomes even more effortless. Users can now pose open-ended questions and receive comprehensive answers, enabling them to navigate through the Knowledge Base with ease. Additionally, GenAI provides intuitive navigation guidance, simplifying complex content and summarizing key insights for a more streamlined user experience.

Furthermore, when it comes to CPQ use, the GenAI search function within the Pricefx Knowledge Base proves to be a game-changer.

By leveraging natural language queries, users can uncover a treasure trove of insights and best practices tailored specifically to their CPQ needs. Whether it’s configuring quotes, defining pricing strategies, or navigating through the intricacies of the CPQ tool, GenAI empowers users to discover the most effective pathways to achieving their company’s business goals.

But Remember AI is not Simply All About GenAI

Great, now you know about using our GenAI tools to accelerate and power your CPQ Software use. And if you would like to take a deep dive and learn more about GenAI and its stengths and limitations, don’t forget to check out my eBook by clicking on the image below:

But remember AI is not exclusively GenAI. The price optimization that works in symbiosis with your CPQ software and allows you the capability and visibility to calculate the right price for the right value provided to the right customer in the right market segment, its AI too, right? But it is not GenAI.

Making perfect sense, Pricefx AI Optimization is the only AI technology toolset providing both rapid activation productized use cases to deliver quick value, AND a bring-your-own-science framework that allows you to capitalize on your investments in data science and futureproof your AI investment by enabling scale and adaptation to your business needs.

Ready to learn more about how price optimization works in everyday, clear and non-geeky language? Then check out the handy article below:

Meanwhile, Happy Pricing!