Pricing Software vs Pricing Solution: What’s the Difference?

In the vast universe of business tools and technologies, the terms “pricing software” and “pricing solution” often float around the ‘pricing-verse’ almost interchangeably. But what exactly sets them apart? And why does it matter? After all, all you want for your business is to set the right prices that maximize your proposed business goals, right? But I’m also certain you do not want to be paying top dollar for a range of pricing tools you may not ever use either. Let’s embark on a journey to demystify these two terms and uncover their significance in the modern business landscape.

At Pricefx, the world’s leading enterprise-level pricing software, we are 110% aware that with modern pricing, an artful balance between value and cost has evolved. No longer is it just the manual adjustment of figures on a spreadsheet. The advent of pricing software has heralded a new era. These digital tools promise efficiency, precision, and the ability to navigate the intricate web of market dynamics. But does your business have the size, scope, complexity, and desire to scale up that really needs it?

In that light, we will examine here what the differences really are between pricing software and a pricing solution, and by doing so, help your business decide on the pricing tools you need to get the job done and be pricing efficiently and profitably.

What is a Pricing Solution?

A solution, in simple terms, is a product or service that solves a specific problem. When it comes to pricing, a pricing solution is tailored to address a particular pricing challenge or need within an organization. It is designed to provide a targeted answer to a well-defined problem. While holistic, multipurpose pricing software like Pricefx offers comprehensive features, it is crucial to understand the broader ecosystem of one-case tools and niche solutions that businesses find valuable to their pricing needs.

For instance, in the context of software, a pricing solution could be a specialized tool such as rebate management software that helps companies optimize their rebate programs, resulting in improved profitability and competitiveness, whilst also enhancing both the downstream and upstream claims processes, making it more efficient and accurate.

While pricing software lays the foundation for holistic pricing excellence, pricing solutions offer tailored approaches to address specific pricing challenges and opportunities. Pricing solutions encompass a diverse range of tools and methodologies designed to solve unique pricing problems, rather than providing a 360-degree all-purpose pricing platform.

By leveraging specialized tools and techniques, pricing solutions enable businesses to address specific pricing needs and drive measurable results.

Other Examples of Pricing Solutions Include:

• Web Scrapers: In eCommerce (and becoming increasingly commonplace in B2B sales environments), web scrapers play a crucial role in gathering competitive pricing data from various online sources. By collecting real-time pricing information from competitor websites, web scrapers provide businesses with valuable insights into market trends, pricing strategies, and competitive dynamics. This enables businesses to adjust their pricing strategies in response to changing market conditions and stay ahead of the competition.
• Comparison Shopping Engines: Comparison shopping engines (CSEs) offer businesses a powerful platform to compare prices and product offerings across multiple online retailers. By aggregating pricing data from various sources, CSEs enable businesses to identify pricing trends, analyze competitor pricing strategies, and optimize their own pricing accordingly. This allows businesses to stay competitive in the online marketplace and attract price-conscious consumers.
• Subscription Pricing Management Software: To manage recurring billing and subscription pricing models.
• Revenue Management Systems: Used to optimize pricing in the airline and travel industries.
• Yield Management Software: For optimizing pricing for hotels and other hospitality businesses.

While some of the above examples cater to specific industries, other B2B companies with a lack of complexity either in terms of product portfolio size, customer segmentation diversity or regionality may only require one or two pricing solutions,   if you are looking to scale and mature your business over time, it could be advantageous to pave the way for pricing software now rather than in the future.

What is Pricing Software?

While point solutions are great at addressing specific pricing challenges, on the other hand, a pricing software encompasses a range of tools and technologies within a single platform that allows for optimized pricing activities and a streamlined user experience. This can include software for price analytics, price management and price setting, price optimization, rebate management, Configure-Price-Quote (CPQ) Software etc.

Consequently, pricing software can be seen to be more comprehensive and versatile, often providing a platform for various pricing-related tasks, processes and setting and executing manifold pricing strategies. Pricing software encompasses a diverse range of tools and functionalities designed to streamline pricing processes, enhance decision-making, and drive profitability. From dynamic pricing algorithms to comprehensive analytics, pricing software empowers businesses to stay agile, responsive, and competitive in the ever-evolving marketplace.

By its very nature and definition, therefore, we can extrapolate that pricing software is a perfect choice for complex and large organizations working at the enterprise level of business. If you are an enormous global corporation or with the burning desire to become one, setting the right price for your products or services is a multifaceted puzzle. It involves navigating through a labyrinth of factors, including production costs, market demand, competition, customer behavior, and economic fluctuations.

Pricing is complex and difficult, pricing software offers answers for that.

There is no one-size-fits-all approach to pricing success, but that’s precisely why pricing software exists—to provide a structured, data-driven solution.

Multi-component pricing software is built on the philosophy that pricing is not a one-off task; it is a dynamic, ongoing process. It thrives in environments where customer segmentation is multifaceted, enabling businesses to tailor pricing strategies to the unique needs and behaviors of various customer groups.

What’s more, the global scalability of pricing software ensures that pricing strategies can be seamlessly applied across international markets, accounting for currency fluctuations, local competition, and regulatory intricacies.

At the global and enterprise level that we are discussing here for pricing software, four major options currently exist for customers to choose from; Pricefx, Zilliant, PROS and Vendavo.

To help distinguish the differences on how we at Pricefx stack up against the options, here are some direct head-to-head comparison articles that show you the difference between us and the other enterprise-level pricing software vendors listed above:

• Pricefx vs Zilliant
• Pricefx vs PROS
• Pricefx vs Vendavo

Or, if you would like to learn if your business is ready (or not) to graduate to enterprise pricing software, check out this useful article below:

The Evolution of Pricing Software in Recent Years

In recent times, the boundaries between pricing software and pricing solutions have become increasingly blurred, with companies offering integrated solutions that combine a diverse range of tools and functionalities under one umbrella. For example, this evolution has led to the confluence of configure-price-quote (CPQ) software, which encompasses a wide array of pricing solutions, including price optimization, quoting, and configuration tools. By offering a holistic approach to pricing management like this, integrated pricing software solutions provide businesses with a comprehensive toolkit to address their pricing needs effectively.

Frequently, pricing software companies will work together with a pricing solution provider to offer a one-stop shop where the functionality of the two platforms can work together in symbiosis to solve customer needs.

For example, take our own recently announced partnership with Enable. By partnering with the best rebate management platform in the business in Enable, Pricefx customers now receive more options in how they implement their rebate strategies while maintaining the same quality pricing solutions that also have done to help to drive meaningful business impact.

To learn more about the Pricefx and Enable partnership and how that assists our customers with better rebate management, check out this handy article below:

The Value Proposition Distinction Between Pricing Solutions & Pricing Software

The distinction between pricing software and pricing solutions lies in their value proposition. Yes, it’s true – pricing solutions offer targeted answers to specific problems, which would make you think it makes it easier to articulate and capture their value.

Counter intuitively however, pricing software provides a more comprehensive set of tools for managing pricing activities across an enterprise organization. The level of insight is far greater and with that, more nuanced pricing strategies can capture previously unimaginable value as we will discuss in the next section.

The Role of Pricing Software: Beyond the Number Crunching

Pricing software, equipped with algorithms and data analysis capabilities, streamlines processes, automates calculations, and offers valuable insights gleaned from colossal data pools. But its prowess extends beyond mere number-crunching.

Imagine a platform that not only analyzes historical data but also predicts future market trends, assists in segmenting customers, and dynamically adjusts prices in real-time. These functionalities are not just tools; they are the silent maestros orchestrating intricate symphonies of pricing strategies and simulating the results of price lift shifts on your bottom line before you even implement them.

Yet, while these tools are robust, their prowess is limited without the guiding hand of a well-crafted pricing strategy. The software might discern patterns, recommend optimal prices, or even execute changes swiftly, but it is your pricing strategy that will outline the grand design.

Regardless of the Tool – Pricing Software or Solution – Your Strategy is Key

An astutely crafted pricing strategy, coupled with either a pricing solution or cutting-edge pricing software (depending on your business goals), forms an alliance far more potent than either of the two tool types in isolation.

For enterprise companies, pricing software acts as the executor, swiftly enacting the strategy’s directives and translating the strategic decisions into tangible pricing structures within the software.

Meanwhile, the strategy remains the guiding light, providing direction, purpose, and context, ensuring that the chosen pricing models align with the overall business objectives and customer value proposition.

If you are a business of any substantive size or product, customer or geographical complexity, quality pricing software will help you execute your pricing strategy and get the job done, but it will not set your strategy for you.

If you would like to learn more about how to set a comprehensive pricing strategy for your business, please refer to this handy article below to learn more:

Meanwhile, Happy Pricing!