The Top 4 Pricefx Functions for Your Food & Beverage Company
In present circumstances, if your food and beverage company is forced to implement a cost increase of $1 on your 12-ounce bags of coffee or 2lbs bags of sugar, in reality, how much of that $1 can you expect to pass on in increased costs to customers? Or should it be even more than $1 to preserve your profit? In that relevant light, what tools are your food and beverage company using to manage unpredictable scenarios like this and the myriad of unique pricing challenges currently facing the industry? With that being the case, we feel it is high time that we take a deep dive into how technology can help ease the pricing burden for your business.
At Pricefx, we have spent more than decade assisting hundreds of clients to make data-informed and real-time pricing decisions for their food and beverage businesses, empowering them to protect their profits, and while doing so, assisting them to transform into lean and nimble pricing-efficient organizations.
That is why in this article, we have decided to examine the Top 4 Pricefx functions for your food and beverage company, and how they can help you accurately protect your prices and margins, and along the way, help you unearth new business opportunities you never knew you had.
Pricefx’s Top 4 Pricing Functions for Food & Beverage Companies
Let’s get started by jumping straight into Pricefx’s Top 4 pricing software functions that directly benefit companies operate within the food and beverage sector and examine how each may help your company in achieving your organization’s unique set of pricing objectives.
(Please note, this is not intended to be an exhaustive list but instead covers the main pricing pain points that we find food and beverage companies answering daily with the Pricefx solution);
- Simplify Complex Pricing Strategies in a Comprehensive ‘One-Stop’ Pricing Solution
- Streamline Rebates, Discounts & Promotions Management
- Increase Your Pricing Accuracy & Price Optimization –Targeted & Transparent
- Modernize & Update Your Quoting Systems and Processes
1. Simplify Complex Pricing Strategies in a Comprehensive ‘One-Stop’ Pricing Solution
Managing your pricing strategy is critical to maximizing earnings and profits for your business. However, with increasingly complex pricing strategies, inventory to maintain, rules and guidelines and very little integration or automation of your key systems and processes, is it any wonder that your pricing team is struggling to keep up with the sudden and unpredictable rate of change in the food and beverage industry?
As a result, your pricing team has little to no time to do what they do best and enjoy doing – thinking strategically and solving the ‘big picture’ problems – that confront your food and beverage business.
Most importantly, if you can get all the disparate systems working together as a complete and comprehensive one-stop’ pricing shop, you have a pathway to avoid losing sales and leaking margin.
For example, do you know if your pricing team in India are optimizing the pricing on your 20lb bags of Basmati rice there, where it is perceived as a premium product, despite the fact in Oklahoma it is priced-rock bottom as an attempt to break the new product into the market in the Sooner State?
Or is it by accident due to the copy/paste of spreadsheet data, or simply by working in silos without automated approvals and workflows, that your Indian team has slipped into adopting the cheaper Oklahoma pricing and it is costing you millions in potential lost profit every quarter?
What’s more, there is no way to collate accurate and real-time data for all visibility of all sides of your business if your systems do not work together.
Whichever way you look at it, those disparate systems and pricing practices are costing your food and beverage company money – and the chances are – lots of it.
Rather than a specific module or section of Pricefx software, the system holistically encompasses that manages your food and beverage company’s pricing strategy and codifies your actions in a critical and united pathway to maximizing earnings and profits. It also transforms your pricing from becoming entrenched in a reactive trap into a proactive force to stay ahead of the game.
As a complete fast, flexible, and friendly pricing software solution, Pricefx makes it easier for your pricing team to manage your pricing strategies from price policy definition and set-up of price guidelines to the management of complex off- and on-invoice conditions. Provide optimized pricing (informed by the latest in AI-technology), set pre-defined workflows and ensure easy integration with your key enterprise systems. By automating ETL (extract, transform, load) of data from various sources into one system that becomes your sole source of truth, you will ensure consistency and pricing accuracy while reducing errors and risk.
Remember our 20lb bag of rice we mentioned above?
With Pricefx’s complete pricing system (having determined your internal business strategy that you want to implement for that bag of rice), you have decided that you want to:
- Increase Sales volume to lower production costs in your Scandinavian market where labor costs in packaging are extreme.
- Have a standard 30% profit margin on your 20lb bag of Basmati rice in Switzerland as it is a niche market, but demand is growing.
- Have a standard 15% profit margin in the United States where your delivery costs are least, and intense competition prevails.
- Have a standard 20% profit margin in all other markets.
- You want to apply all these rules in every market you sell in except India where a standard 40% profit margin applies across all your 20lb bags of Basmati rice as demand is heaviest and production costs are the least.
- You want to re-assess and re-set these business outcomes every quarter.
With the ‘real world’ Pricefx functionality, you can turn the above six business outcomes for your 20lb bag of rice into reality by instating just a single pricing rule into the software to calculate your various prices for that same bag of rice worldwide automatically.
2. Streamline Rebates, Discounts & Promotions Management
What business or customer does not love a rebate, promotion, or discount? For sure you do, and your customers do too.
Managing your company’s rebates, discounts, and promotions is important work, and obviously you want to be able to offer your clients and customers benefits to secure the sale, and/or reward your long-standing clients for their loyalty and on-going business.
But do you always want or need to be offering your clients a discount if taste for your products develops, or suddenly, you are the only guys in the country who still have supply of your products? Sure, you want to drop the discounts and on-going promotions and value-price, but is your technology reactive enough to perform the update to your rebate management in real-time?
For example, if your business is experiencing high demand for your chocolate chip cookie dough mix, does it really need to still be discounted? Time to ditch the promotions and rebates on that product! Perhaps changing customer perceptions to see that chocolate yumminess has value as a premium product ASAP is of most advantage to your company’s bottom line?
And if you are a food and beverage distributor, those rebates, discounts, and promotions come from all sides – incoming and outgoing – rebates, discounts and promotions can begin to become complex.
Your Excel spreadsheets and the manual labor involved were never designed to manage modern rebate data flow required of your discounts, promotions, and rebates. If your food and beverage pricing is not receiving the attention and level of modernization required, your business goals are at risk of falling out of reach.
Pricefx’s Rebate Management function has its own specific module as part of the Pricefx pricing solution. It can be implemented quickly so that you can get started providing value to your company and your customers ASAP. It is specifically designed to aid in the definition, management, and calculation of your rebates.
Rebate Management defines, manages, simulates, automates approvals and workflows, pays, and pushes on-time accruals, calculates rebates, discounts, and bonuses and reduces the complexity of handling your ship and claims processes.
By reducing manual involvement, you can not only reduce labor hours but the risk of painful mistakes.
It is Rebate Management that you can deliver with accuracy and do it all on time.
And because actions are fast, the Pricefx Rebate Management tool removed the rebates on your abovementioned premium-priced chocolate chip cookie dough yesterday.
Remember, don’t rush straight to the rebates, discounts, and promotions toolshed to win the sale and don’t be in a rush to drop prices.
Rebate Management can help you find weaknesses and locate new opportunities for profit.
3. Increase Your Pricing Accuracy & Price Optimization – Targeted & Transparent
Food prices are currently rising faster than anyone might have predicted, so being more accurate and targeted in the pricing of your products has transformed the way you do business and aim to protect your margins.
It is a radical mind shift for many food and beverage companies that have traditionally placed a quarterly 3-to-5 % price increase year-in/year-out as the foundation for their pricing plans.
But now the goals posts have moved and what’s more, they keep moving. Price Optimization is a much used ‘buzzword’ in the pricing industry right now, but it’s power and practical applications are not always fully understood (particularly for food and beverage companies).
It’s already past the time to depend upon locally optimized and siloed pricing data and decisions and look at a more integrated approach to optimizing prices in every region you operate in.
You will need to have accurate, real-time internal data (including current and projected sales history and costs) in addition to external data (like customer demand, competitor prices, and channel partner data) to get a holistic view of the market and optimize your prices to maximize profit.
Fully integrated pricing software tools like Pricefx bring all this essential data together for more specialized analyses that support optimal pricing decisions and help you understand exactly how much revenue is gained from each transaction and where money might be leaking.
With AI-informed Pricefx Price Optimization, the right data will not only decrease risk but work for your bottom line by revealing profit and margin opportunities as well as helping you find ways of mitigating costs.
Putting data at the core of your pricing and decisions also helps you set prices that your sales team not only trusts but understands and can be defended easily.
With Pricefx pricing software, your data does not need to be perfect to start (don’t worry, you are not alone, it never is). You can share the data you have, add more as time goes by, and as data and its channels inevitably change, Pricefx’s flexibility will enhance your company’s adroit real-time nimbleness as data needs, sources and types transform.
4. Modernize & Update Your Quoting Systems and Processes
Studies have shown that as many as 50% of sales reps in food and beverage organizations are wasting their time on error correction, and other manual tasks such as data entry and writing price quotes. They are heavily relying on spreadsheets and use other outdated tools to create generic or incorrect quotes. And what is more, continuing to replicate the same errors is just way too easy with manual input into quotes.
If you need to scroll through tens of thousands of lines of data to find the exact rare Lays Potato Chip Chili-Lime lightly salted variety that you’re looking to add 50 cases to your quote, errors will be easy to make.
Suddenly, you discover that you have included the regularly salted version by mistake and the 50 cases are already on the way to your customer.
Ooops! With the Pricefx Quoting Capability, it would not have happened.
What’s more, taking days rather than hours to produce a quote in the food and beverage industry has further complications due to short shelf lives and storage times.
If that sounds like the situation that is currently occurring in the sales department of your food and beverage company, then there is a better way.
If you are trying to manage all the items on your food and beverage price lists manually in a labyrinth of error-prone spreadsheets or a CRM (Customer Relationship Management) or ERP (Enterprise Resource Planning) that was never built for the task, automated quoting is a functionality of the Pricefx system that many companies find helpful.
To survive in a fast-moving market, your quoting processes need to keep pace and Pricefx Quoting aligns your sales and pricing teams to improve efficiency.
Replacing time-consuming, labor-intensive (and potentially error-prone) pricing processes with accurate, streamlined automated workflows allows you to execute mass price updates with less manpower, while improving accuracy, consistency, and speed. By shifting the focus of your sales team away from administrative tasks, you’re freeing them to do what they do best, sell more and get strategic.
The quoting and negotiation processes are pain-free and supported to accelerate turnarounds and close more deals. Optimal prices and price guidance for specific quotes or transactions help your sales teams to project and identify upsell and cross-sell opportunities.
How to Use Pricefx to Implement Your F &B Pricing Strategy
Now you know the Top 4 ways that Pricefx can specifically assist your food and beverage company to achieve your unique set of business goals and transform your pricing strategy into positive outcomes.
Or maybe you’re at the starting point where many of Pricefx’s clients begin their pricing journeys, and you want to know how to implement a pricing strategy?
If you are still in the pricing software ‘starting gates,’ check out this handy article for advice on implementing your pricing strategy:
On the flip side, if your food and beverage company is ‘pricing mature’ and you can already see that you will gain value and efficiency from Pricefx , then you will want to talk to one of our pricing experts to get started today;
About the Author
John Gilbo is an enterprise account executive at Pricefx, where he puts into practice his deep experience in pricing strategy, client account management, software procurement & implementation and financial analysis. He formerly led pricing strategy at Kirkland’s, Academy Sports + Outdoors, and Safeway, where he was hands on with AI-based analytical tools, retail strategy and change management. John is also an avid marathon runner and triathlete.