How to Choose Pricing Software That Is Right for You
Pricing your products effectively can be a challenging battle. First up, congratulations on identifying that pricing software will assist you in streamlining your pricing strategy, but how to choose pricing software that is right for you?
We get it. There is so much choice in pricing solutions out there that all work in similar, but slightly diverse ways. Not all options may be exactly customized to your business model, nor suit what you are trying to achieve.
At Pricefx, we’ve spent a decade analyzing the requirements of each individual client and customizing their technology solution accordingly.
We’ve found that to really help our customers make the most of our tools, they need to understand whether or not we are a right fit for them. With this article, you will arm yourself with the best possible information to make a wise decision on pricing software for your company.
Why Pricing Software Choices & Decisions are Hard to Make
By definition, pricing software at its simplest is used to establish the best price for the products or services offered by your company. When working optimally, pricing software should allow you to choose prices that will maximize your profits and value to your clients while taking in a range of consumer and market supply and demand factors.
If choosing who to use to implement the power of pricing software was only as easy as the definition appears. For good or bad, there are a lot of moving parts in the process and not all pricing software is created equally.
Different pricing software can have different functionality. For example, one pricing software company might be superb at hotel and airline revenue management, and other excellent at tracking real-time raw material price fluctuations a chemical manufacturing company. Of course, all of that might be moot if your company is searching for pricing software that specializes in rebate management and setting regionalized prices.
5 Questions to Ask Yourself When Choosing Pricing Software
Let’s examine 5 questions to ask yourself that will determine how to choose the best pricing software for you;
- Does the pricing software check all my functionality boxes?
- Can the pricing software be integrated with my existing system?
- Will my choice of pricing software be future-proofed?
- Do I want to be self-sufficient or work closely with a pricing software company?
- Will my organization’s culture fit with that of my pricing software company?
1. Does the Pricing Software Check All My Functionality Boxes?
Straight out of the gates, when comparing pricing software options consider if the option will check all the boxes of functionality (and more ‘nice-haves’ if possible – but more of future-proofing in a moment) required for the unique set of business objectives of your company.
Regardless if you’re a manufacturing, distribution, or chemical company, it will be great to have a pricing software company onboard that has experience working in your particular industry and understands your unique pain points. Request customer references from within your industry.
Other things to consider are the company’s financial viability, their roadmap of existing and upcoming products, and the basic features and functionality that your specific organization will require.
For example, it will be pointless to consider a pricing software option that specializes exclusively in Configure-Price-Quote (CPQ) quotation software if you have a retail business that only sells off-the-shelf to in-store customers. Requesting to see a demo version in action is another excellent method to ascertain if the functionality of the pricing software suits your business objectives.
Understand what you want and how your company will transform from the pricing software, and that you have all the resources (including IT) in place to implement all the functionality you have on your wish list.
Securing executive buy-in from the heavy hitters and decision-makers in your company to your pricing software project usually rests in having all the functional items on your project ‘must-have-wish-list’ checked off.
The better you understand the answers to these questions in your organization, the more successful you will be in choosing the right pricing software for you.
2. Can The Pricing Software Be Integrated With My Existing System?
If you are the Pricing Manager or VP of Sales of a large enterprise company that currently doesn’t have a pricing software model in place, the chances are that you are already putting moves in place to choose one soon. Perhaps your pricing team is overworked from making a stack of manual pricing entries on Excel spreadsheets, or suffering from ‘tool fatigue’ from simply operating too many standalone systems to track your pricing, customers, regionality, logistics, price lists etc.
Pricing software can assist by establishing a sweeping “Swiss Army Knife – one tool does it all” data integration with your existing systems.
Regardless of your business model and unique data sets, you will need to consider how many other systems and versions of systems you may need to integrate with both now and into the future.
Integration into a pricing software project is usually undertaken by one of three different methods;
1. ‘File-based’ (or sometimes referred to as ‘Manual’) Integration
A ‘so-called ‘manual’ file-based integration uses an uncomplicated text file such as a CSV, XML, JSN or other type of data file, and uploads the specific file on a server into your chosen pricing software.
2. Dedicated Connector Integration – Purpose-built customized connectors
A dedicated connector to integrate your data to your pricing software is a purpose-built connector to facilitate information flow between your system, CRM or ERP and the pricing software.
3. Application Programming Interface (API) Integration
An Application Program Interface (API) is one of most effective methods to integrate your data with your pricing software. APIs are usually built by either by your pricing software provider and/or ERP or CRM system to transfer and share information between one another.
A word of warning – If your company’s needs are anticipated to grow over time, a software package that is not designed from the ground up as a single platform will be more costly, complex, and take longer to deploy over the long term.
The more moving parts of “legacy spaghetti” of different software pieces to manage, the more difficult and expensive it may become to work with over time.
3. Will my Choice of Pricing Software be Future-Proofed?
Have you considered what your organization’s business objectives may change in the next 2-5 years?
In understanding your pricing software choices, it is important to check the options for cultures of innovation and change management. Choose pricing software that will benefit your company with frequent in-built enhancements.
EXPERT TIP – It is strongly advised to consider how the future may look for your company when making your pricing software choice
Analyze the platform capability of your pricing software choices in terms of phases of implementation and where you expect your company to be in the future. For example, enhancing your quote capability may be of top priority right now, however, eventually as your company spreads its wings interstate or internationally, a regionalized pricing strategy may also be important in 3-5 years’ time.
Choosing pricing software that is a total package solution rather than integrating pieces from here-and-there, could be your best bet straight-off-the-bat.
Extending the pricing software platform over time is preferable to having to consider a new software evaluation, project, and unneeded additional costs.
4. Do I want to be self-sufficient or work closely with a pricing software company?
Self-sufficiency, the ability to supply one’s own needs without external assistance from your chosen pricing software provider, will be essential for any pricing team which strives to maintain control of its operations, without being overly dependent on external parties.
By contrast, consider the possibility (maybe you don’t have the IT resources right now) that you may need a pricing software provider to support every single strategy change or minor configuration preference over time.
Check which pricing software companies are consulting firms that have software as opposed to those software companies that are trusted advisors and total solutions specialists.
CONSIDER THIS – Do you want to rely on your pricing software provider for every single upgrade or configuration change? Or will you be looking to act independently?
Giving control to business users, however, is only half of the story. Even without external assistance, companies might still find it difficult to fulfil their pricing needs. Instead of an optimized and automated workflow, pricing can quickly turn into a collection of separate and reactive laborious one-off events. If you are not self-sufficient you may not be able to proactively make pricing strategy changes as required.
5. Will my organization’s culture fit with that of my pricing software company?
Many pricing software applications are often designed to support generic rather than specific requirements, and hence are likely to be an imperfect fit until the two organizations get to know each other. Most pricing departments of large-scale enterprise companies will have their own distinct personality, and accordingly, so too will your pricing software provider.
Organizational and culture alignment are the ‘X factors’ that can mean the difference between success and failure in any pricing software deployment and build fruitful long-term relationships.
Trust will usually be the key element to engage both sides to fit together and following that, an alignment of culture and business goals should be possible. It’s only natural that both your organization and the pricing vendor will expect straight answers wherever possible, even if the words are not necessarily what either entity want to hear.
As a large-scale enterprise business, you will want to be certain that your pricing software provider will invest time and energy into your company’s success and grow with your evolving needs.
Okay, I Now Know Kind of Software I Want – What’s Next?
Now you’ve had an opportunity to think about your answers on how to choose the best pricing software for you, and the key factors that differentiate the multitude of choices out there. You know what you want and it’s time to act, but can your business afford it?
By undertaking the proper planning and identifying the issues around your businesses’ growing pains, and uptake of pricing software, the real question might be; can your organization afford not to?
At PriceFx, we know how powerful pricing software is in setting up a functioning one-stop pricing shop. That’s why we put together this article on pricing software costs for your company to help you decide;
Or if you already have your pricing software budget in place: