- Multiple industries have been disrupted by new technology because incumbents were comfortable with the status quo
- If pricing professionals don’t start adopting forward-thinking views of their data, there will of those who do
- The future of pricing is: fast and& flexible, takes into account omni-channel processes, is customer-centric, intelligent, integrated, and democratic
As you may have guessed, pricing is something that I am extremely passionate about so no wonder I found my way to a company like Pricefx. One of the things that I do here is speak about pricing and its impact to business. More importantly though, I keep my ear to the ground to pinpoint growing trends in pricing that could give a glimpse into what the future of pricing holds.
A reason that I am excited to get a clearer understanding for the future of pricing is because, unfortunately, it seems to me that other industries or segments in business are taking advantage of constantly evolving technology. Transportation services like Uber and Lyft have disrupted the taxi industry. AirBnB is forcing the hotel industry to be more competitive. But, unfortunately, pricing, although critical to any thriving business, has not taken advantage of the democratization of technology, making a good pricing strategy via great pricing technology relevant for everyone.
After conversations with other experts in the field, reading up on pricing, and speaking with customers, here are the six things that I have noticed organizations that value pricing need to be cognizant of if they are to fully embrace the value that tech brings to pricing.
What the Future of Pricing Software Will Look Like:
Fast and Flexible
- As I mentioned before, the world of business is constantly evolving and pricing is a key battleground. The ability to update your prices, logic and rules based on changing market conditions is a key competitive advantage now and going forward. This has played out in retail and e-commerce and is beginning to majorly effect traditionally B2B markets. Having dynamic and competitive pricing capabilities as well as the flexibility for business users to make changes without depending on their IT organization is key to agility. As Mark Benioff said, “Speed is the new currency of business.”
- In many industries, channel disruption is accelerating, especially for traditional B2B companies. Customers interact with vendors via the web, mobile, in-store, store pick-ups, etc. Optimizing and consistently applying pricing in this environment is complex, thus increasing the need for a holistic pricing platform for managing it and integrating with these touch points. By integrating these touch points, B2B and B2C organizations can make sure that their pricing strategy has maximum impact because it takes all of the channels into consideration.
- After understanding your customers’ buying journeys, it’s key to understand the value your customers get from your products and services, what alternatives exist in the market, and how your offers compare against them. This combination of customer-centric pricing and using value and market-based principles is becoming the standard on which the future will be based. A data-driven approach that is augmented with rules based on your management insight is key to a differentiated and customer-centric pricing strategy. There are multiple pricing research methods to find out what your customers are willing to pay. Some of which you can use to get direct feedback from your clients.
- Machine learning and AI are changing the game in many industries and pricing software is one of the areas where you can see real gains from the application of this technology. We believe that to compete effectively going forward, companies will need a pricing solution with the combination of AI/Machine Learning and business rules to prescribe optimal prices into deals and transactions. In effect, there will be pricing technology that can proactively help users to determine prices and not just react to market forces.
- Because pricing can be integral to multiple departments, data-driven intelligence depends on data from multiple sources, both internal systems like ERP and CRM, and external systems for competitive data, indexes and other leading indicators that companies factor into their pricing decisions. Integration is, therefore, a core capability for effective pricing solutions and one where modern, cloud-based solutions have a major advantage.
- Historically, an increase in volume has been preferable to an increase in prices because, quite frankly, it’s difficult to implement. As a result, pricing software can no longer be relevant for just Fortune 2000 companies. Companies of all sizes and industries seek optimal price and margin points while maintaining satisfied customers. There is a growing necessity for price management, price setting, and price optimization solutions that can be implemented quickly and have the flexibility to scale as companies grow. Pricing software will be made accessible to virtually any organization who has anin interest in improving their pricing.
I think that the future of pricing is something that every company, no matter the industry or size, participate in because it is accessible, customer-centric, takes in to account current business processes, is AI and machine learning led, fast to implement and adaptive.
But those are just my thoughts. What do you think is the future of pricing? Which things are you most looking forward to implementing in your organization?