Sales people who work with price matrices know that they can be complex and subject to constant modification. Quoting prices often turns into a chore, and many people may unintentionally adopt an inefficient method in order to cope.
While many of these strategies may work in the short-term, they’re inevitably removed from the actual market, and can result in a significant profit-loss due to their inefficiency and unreliability. Lowered quality can also open the door to competition, especially, if pricing strategies tend to focus on particular areas of the matrix while excluding other, important customers.
The reality is that pricing matrices based on spreadsheet technology is usually too much for busy sales teams to handle in an efficient manner, which leads to a hard ceiling that prevents further profitability. Sales people become focused on matrix rules and conditions rather than on driving P&L results, which is cumbersome and considerably inefficient.
The mechanisms used are rational, but not always the most accurate – they are usually “rule of thumb” techniques that remove pricing from the real world and real-time dimensionality.
Constructing pricing strategies and matrices based upon how the actual market in the real world will respond to price is not only far more efficient, but it likely to generate maximum profit without devolving into areas permeated with too much risk.
A solution revolving around pricing science and utilizing quality software makes it possible to make the best use of a pricing matrix while using pricing strategies that are responsive to real-world market situations. This allows businesses to take advantage of profit opportunities as they arise, rather than leaving revenue on the table due to fear of risk. With matrix dimensions that are aligned with market response predictions, the capacity for building both a manageable and real world matrix opens up the possibility for increased profits.
Guesswork may sometimes work (people can profit occasionally from gambling), but stable and long-term pricing strategies are of course preferred. Implementing software that can optimize the efficacy of your price matrix allows businesses to better manage and optimize every price in a matrix, which frees sales teams to concentrate their efforts of generating positive P&L results.
The Zilliant platform uses advanced science in its price optimization and sales effectiveness applications to drive measurable financial results for B2B companies. MarginMax replaces guesswork in the areas that have the greatest influence on price matrix effectiveness. Leaving behind simple formulas and high-level rules for pricing strategies, companies are using the unique combination of science and technology in MarginMax to efficiently manage and effectively optimize each and every price in a matrix or on a list. Zilliant is located at 3815 S. Capital of Texas Highway, Suite 300, Austin, TX 78704 Phone: +1 512-531-8500 | Europe: +44 7769 294323
