The chemical and process manufacturing industry, a cornerstone of global manufacturing, faces a unique set of pricing challenges. Volatile raw material costs, ever-shifting market dynamics, and a diverse range of customer needs all contribute to a complex pricing landscape. Chemical companies, striving for both efficiency and profitability, often find themselves entangled in a web of manual processes and siloed data, hindering their ability to react swiftly and optimize pricing strategies. This is where the ability to automate and scale your organization’s pricing emerges as a powerful tool, offering a way to untangle the complexities of chemical pricing and propel companies towards a more agile and profitable future.

At Pricefx, as a leading provider of cloud-native, Ai-informed pricing automation solutions, we empower chemical companies to automate and scale their pricing, enabling them to:

• Respond swiftly to market changes with real-time data-driven adjustments.
• Streamline complex pricing models for long-term contracts, ensuring accuracy and efficiency.
• Simplify spot pricing management for short-term agreements, considering market fluctuations and individual customer needs.
• Boost rebate program effectiveness by automating accrual and payout calculations, fostering strong customer relationships and minimizing margin erosion.

By focusing on three key areas – complex pricing for long-term agreements, spot pricing for short-term agreements, and streamlined accruals and payouts for rebates – Pricefx's automation solutions transform the way chemical companies approach pricing.

Let’s jump in and see how Pricefx both transforms and simplifies chemical company pricing to make for more efficient and profitable businesses.

1.      Demystifying Complex Pricing for Long-Term Agreements

Long-term contracts are a mainstay in the chemical industry, often involving formula-based pricing models that account for various cost drivers. However, manually updating these formulas for a multitude of contracts across diverse customer segments can be a time-consuming and error-prone process.

Pricefx tackles this challenge with a multi-pronged approach:

• Automatic Price Recalculation: Pricefx allows companies to set up real-time price adjustments based on pre-defined cost drivers such as freight, packaging, and raw material costs. Fluctuations in these factors are automatically reflected in the pricing model, eliminating the need for manual recalculations and ensuring prices remain dynamic and competitive.
• Pricing Templates: Managing numerous contracts with similar customer profiles can be a daunting task. Pricefx offers the ability to create pricing templates, allowing companies to group customers with comparable characteristics. Price updates can then be applied to the entire group simultaneously, significantly reducing the time and effort required for contract maintenance.
• External Data Integration: Accurate and up-to-date market data is critical for ensuring competitive pricing. Pricefx seamlessly integrates with external data sources, providing real-time market insights that empower pricing teams to make informed decisions during negotiations and ensure consistently competitive pricing throughout the contract lifecycle.

And what’s more, the specific capability to manage your agreements overall is a critical part of the Pricefx platform to help you to create any kind of promotion or agreement at scale without any error.

With the Pricefx Agreements and Promotions capability, you can make, keep and monitor customer agreements and see how they affect your pricing, revenue and market. You can also handle promotions or special prices. Agreement types help you renew agreements. And you can see how agreements change your revenue and margin. Our capability works for both individual agreements for one customer and promotions for long customer lists.

To learn more, check out the video below:

2. Mastering the Nuances of Spot Pricing for Short-Term Agreements

Spot pricing, used for short-term agreements and smaller customers, presents its own set of challenges. Market forces such as raw material costs and supply and demand dynamics can fluctuate rapidly, necessitating frequent price adjustments. Additionally, spot pricing needs to be tailored to individual customer requirements while remaining sensitive to regional and market variations.

Here are the main Pricefx features that help chemical companies to make sure their spot pricing actions are consistent with their overall financial objectives:

Detailed View of Spot Performance

Pricefx helps chemical companies use data to see spot revenue, margin, and volume performance in detail over time, divided by region and product category. Pricing analysts can see spot pricing better and notice trends across places, industries, and customers over time, which helps them make faster and smarter spot pricing decisions. They can do this with:

• Spot margin charts that show past and future spot pricing performance
• Spot business summaries of financial KPIs (Key Performance Indicators) for regions and industries
• Charts of customer-specific performance
• Forced Rankings of low and high performers

We will explore how each of these works and how they enhance the performance of spot margin in the following sections.

Trend Analysis

Pricefx provides instant analytics tools that help chemical and process manufacturing companies easily see how their spot pricing performance compares to their financial plans. With these tools, companies can change their spot pricing strategies as needed to adapt to changing market conditions and trends.

Margin Performance (Actual and Forecasted) Time Series Charts

To help companies do this, Pricefx offers a key feature: a chart that shows margin performance over time. Companies can see how margins change - in the past year and the next year - and know when they will go down or up.

Spot Business Summaries

With Pricefx's built-in analytics, companies can get a comprehensive business overview to spot trends in various financial areas of interest, such as revenue, margin, and volume performance.

Pricefx enables companies to track how these three financial analytics KPIs vary over a year-to-date period. The platform uses distinct color coding to indicate areas where performance may fall short of the company's goals. These actionable insights are grouped by industries and operating regions to help companies identify which regions or segments that are lagging.

Learn more about Pricefx Actionable Insights and the dashboards and charts you can set up in the video below:

Customer Performance Pie Charts

Furthermore, Pricefx also provides customer-oriented performance pie charts that help companies optimize their spot pricing decisions for each customer. This feature is useful because different customers may have different margins depending on their pricing strategies. By using real-time analytics, companies can see how each customer contributes to their financial goals and adjust their pricing accordingly.

Force Ranking

Pricefx offers a way to improve customer performance insights by ranking customers and products by their performance levels in each category, allowing pricing and sales teams to focus on the areas with the most room for margin improvement.

This feature is especially useful for chemical companies that have many customers from different industries like automotive, construction, and pharmaceuticals.

With this feature, companies can evaluate customer performance systematically across their various accounts by quickly spotting the best and worst performers. By knowing these two groups, companies can fine-tune their pricing strategies for underperforming segments to avoid future margin losses and increase long-term profitability.

To dive even deeper into the Pricefx Spot Pricing capability for chemical companies, check out this in-depth article below:

3. Streamlining Accruals and Payouts for Effective Rebate Programs

Rebates are a powerful tool for chemical companies to incentivize purchases, build customer loyalty, and drive sales. However, manual calculations of accruals and payouts can be error-prone and time-consuming, leading to inaccurate rewards, frustrated customers, and ultimately, a weakened bottom line.

Together with its rebate management partners Enable, Pricefx streamlines rebate program management by automating accrual and payout calculations.  Enable’s rebate management platform is more comprehensive than our own rebate management tool, as they cover both sell-side (customer) and buy-side (supplier) rebates while Pricefx’s software solution offers sell side.

Apart from allowing you to approach rebates from both vantage points, Enable’s rebate management platform offers other unique benefits that augment Pricefx’s holistic pricing tools.

Your rebate calculations are based on real performance data, not estimates, ensuring customers are rewarded accurately and timely. This fosters stronger customer relationships built on trust and transparency, while also minimizing margin erosion by eliminating the risk of overpaying customers who have not met their commitments.

Which Rebate Management Solution Should I Choose – Enable or Pricefx?

You can keep using our rebate management solution if you only need sell-side rebates. If you need both buy-side and sell-side rebates, or just buy-side, go for Enable’s rebate management solutions. Enable also lets you share claims with all customers and let them track or submit claims.

You can still use our comprehensive Pricefx pricing solutions along with Enable’s rebate management capabilities to look after the rebates work in your chemical organization should you choose to do so.

If you require further clarification on how Pricefx and Enable can help manage all your company’s pricing and rebate needs, check out this handy article here.

Pricefx: A Foundation for Sustainable Chemical Industry Growth

Now you know that navigating the complexities of chemical pricing requires a combination of automation, accuracy, and data-driven insights. Pricefx offers a comprehensive solution that addresses all three of these critical areas. By automating tasks, eliminating errors, and providing valuable data analytics, Pricefx empowers chemical companies to achieve:

• Increased Efficiency: Freeing up valuable time for strategic initiatives.
• Enhanced Accuracy: Ensuring fair and consistent pricing for all customers.
• Improved Profitability: Protecting margins and capturing the full value of products.
• Stronger Customer Relationships: Building trust through accurate pricing and timely rebates.
• Data-Driven Decisions: Making informed decisions based on real-time market insights.

The combined benefits contribute to a more agile and profitable future for chemical companies. Pricefx acts as a foundation for sustainable growth, allowing chemical companies to adapt to the ever-changing market landscape and secure their long-term success.

But what sort of value should you expect from an investment in Pricefx and how should your business recognize, follow it, and track it?

To learn more about what value from Pricefx should look like for your company, check out the useful article below:

Meanwhile, Happy & Profitable Pricing!