Across various industries, pricing decisions and the implementation of a pricing strategy requires an in-depth analysis of the market, a knowledge of your workflow, advanced algorithms, and an IT interface that can integrate and tailor data-exchange needs. However, if you find software that offers all these features and implement it appropriately, the payoff can be substantial.
With pricing software, you’re looking at reducing manual labor and speeding up the compilation of real-time data in a way that your pricing team never could before. Whether you’re dealing with high price fluctuation, expanding digitalization, or a bevy of competitors that are cornering your market share, you need a strong foundation for pricing that isn’t as complicated and time-consuming as what you’re doing now.
If you’re considering pricing software to empower and enhance the work of your pricing managers, the benefits of pricing software are concrete. I’m breaking down how pricing software can help you and why you should still keep your entire team around to analyze and implement the best practices for your organization. Check out this analysis for more.
Pricing Software Functionality
There are many different types of pricing software, but you want to find one that’s tailored to your needs. However, most software will offer standardized functionality that may not depend on an industry focus, including:
- Pricing analytics: With the ability to utilize external and internal data to analyze sales data, market data, pricing trends, and profit leakages in real-time, you can make better business decisions with regular reporting tools.
- Pricing management: This feature covers the administration of various price lists and the assignment of customer groups based on your preferred pricing models. It also provides a single source of truth to your sales team for better pricing data.
- Price optimization: A tool that functions through configurable formulas, algorithms, and artificial intelligence to calculate and optimize prices for thousands of products. Do it frequently in real time for dynamic pricing.
- Price crawling: Your software will collect competitor data using web scraping to extract information from ecommerce portals, online sites, and social media. You’ll need to maintain and update price crawling as websites and data structures change.
- Discount and promotion management: Set customer-specific or seasonal price conditions that override the normal price list for a single client or for a limited time.
- Price recommendations: These are logic-based pricing models that can provide your sales team with a target price or a price range for their specific negotiations. As metrics and data change, so can the recommendation.
Benefits Of SaaS Pricing Solutions
While these tools can improve decision-making and ensure optimal pricing, they come with a major financial and time investment. So how do you quantify the value and benefits this software provides? Check out my value-based breakdown for these pricing solutions.
Pricing decisions are generally decentralized, making it difficult to gain insight into new pricing points. With pricing software, you can increase comparability, transparency, and control over these processes, which can also result in fewer leakages and errors.
Faster Response Times
With so many products, discount agreements, and customers, it used to take weeks to deliver the appropriate price listings. However, with new technologies in data science utilized in pricing tools, you get immediate results to target bottlenecks in data collection.
Pricing software uses AI-based algorithms and sophisticated logics to calculate prices based on historical trends and predicted outcomes to ensure enhanced granularity and analysis of every influencing factor. You also get an audit trail, as pricing software collects its own data.
With automation and digitization of analytics, data complication, and approval processes, pricing software speeds up your workflow and relieves your team from having to complete manual, time-consuming tasks.
Downsides Of Pricing Software
While the benefits of pricing software can ensure competitive pricing that increases your profits, there are a few downsides to these apps, including:
Sometimes, automation can lead to a shortfall in your target profit. You need specialists checking retail prices and total price changes every month so you don’t end up with automatically transferred goods to a group with a higher trade margin.
Pricing software is not infallible. The system may go down, there may be automation failure, or your system may lose data. Re-entering data manually will require a ton of effort and can be a major setback in the short term.
Incorrect inputs, misusing formulas, or badly written algorithms can all result in incorrect pricing. You’ll need to look out for human error and ensure it doesn’t affect your automated processes.
Dependency on Automation
Many businesses are automating their entire tech stack, including their CRM and marketing processes. If your entire business is depending on one specific tool, you may be in trouble if the platform stagnates or shuts down.
Weighing The Pros And Cons
For many, the benefits of pricing software far outweigh the disadvantages — especially if they mitigate the circumstances for automation failure and programming errors with backup plans and redundancies. In fact, an analyst who’s familiar with the essential legal and economic parameters of your organization and selling locations is critical!
Finding the right pricing software is also crucial to ensuring you get the best value for your money. If you’re on the hunt, take a look at this breakdown of the best pricing software. It might help you find the right tool to keep up with market trends and teach you what to look for in the top products.
Using pricing software to automate your business process and make data-driven decisions can be a massive change for anyone transitioning from manual processes. You must take into account all the benefits and disadvantages. Keep an eye on the changes for pricing best practices and upcoming software releases to ensure your organization stays on the ball.
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