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Modern Commerce –Maturity ModelCraig ZawadaChief Visionary Officer, PROSFriday, May 12th

©2017 PROS, Inc. All rights reserved. Confidential and Proprietary.2

Companies Today are Awakening to a New Era of Digital Business


The buyer experience has changed forever….

Buyers expect frictionless interactions, every time

Digital, social and mobile are the new front doors

Buyers flow seamlessly across multiple channels

Time is the new currency

Self service and price transparency are the new normal


Leaders must shift to a modern commerce strategy or risk getting left behind.


Sales Experience

Value to Price

Company and Brand

Product and Service

Sales Experience is the New Battleground to Drive Revenue Growth

19

19

9

53


The New Imperative

Company in control

Guesswork, selling on gut instinctOnline/offline silos

Manual, opaque pricing

Standard, pre-defined offers

From: Traditional commerce

Customer in control, fully informed buyers

Selling on science, algorithms, machine learningFrictionless, omnichannel experiences

Dynamic, transparent pricing

Personalized offers

To:

Modern commerce


EMBED Dynamic Pricing Science in all modern commerce initiatives

The New Requirements: Dynamic Pricing Science

GENERATE the right offer atthe right customer moment; segment of one

ENSURE SPEED, PRECISIONAND CONSISTENCY across all channels continuously

TRACK AND ANALYZEhundreds and thousandsof internal and external factors

Essential for modern commerce and the modern buying experience


Long Quote Turnaround Time has a Direct Impact on Win RateHigh Tech Example

50.2%

36.4% 36.0% 31.9%

27.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

-

500

1,000

1,500

2,000

2,500

<4hrs 4.01-8hrs 8.01-16hrs 16-24hrs >24hrs

Total QuotesWin Rate

>40% reduction in win rate


Pricing Took the Majority of Time in the Quoting ProcessHigh Tech Example

Entry Admin Processing Sales Validation Pricing

Calculation Pricing Approval Quote Publishing

Partner Submits Request

Admin Team Processes &

Escalates

Sales Validates Request & Respond with Information Required for

Eclipse Deal Creation

Admin Team Creates

Eclipse Deal

Bid Desk Analyzes and Approves Deal, Seeking Justification/

Approval from Sales & Local BU

Managers

Bid Desk Seeks Region BU Approval and Performs Final

Approval (if beyond country delegation)

Admin Team Triggers Email Notification to

Partner

Region BU Seeks WW Pricing Approval and Performs Final

Approval (if beyond region delegation)

Partner

SQ Team

Sales Team

Bid Desk

Local BU

Region BU/Pricing

WW Pricing

1% 4% 24% 4% 63% 4%


The risk to your business of getting this wrong

① SLOW: Can’t quote quickly, friction in the approval process② STATIC: Prices can’t move with the market③ IMPERSONAL: Prices not specific to customers and segments④ SILOED: Disconnection across sales channels⑤ INCONSISTENT: Varied pricing across customers creating low

price expectations

Money left on the table, reduction in win-rate and downward price pressures.

Single biggest factor holding modern commerce back?

The inability to price dynamically across all channels


Question #1

To what degree does each of these represent a revenue or profit risk to your company in the next 5 years?scale of 1 to 5 (1 = no risk, 5 = significant risk):

* Price are TOO SLOW – and you cannot quote quickly* Prices are TOO STATIC – and do not move with the market* Prices are NOT PRECISE/PERSONALIZED – to a customer/segment* Prices are NOT OMNICHANNEL –across channels * Prices are INCONSISTENT –across customers


The Pricing Science Maturity Model

Real-time

Pers

onal

ized

Offe

rs

Autonomous,No-Touch

What do you want to happen?

Dynamic Pricing Science

GuidedWhat could have

happened?

Rearview Analytics

Why did it happen?

ManualWhat happened?

SpeedDays

Prec

ision

One

Size

Fits

All


Question #2

What category best describes the current state of pricing in your company?

A. Manual, Excel Based B. Rearview AnalyticsC. Guidance – what happened?D. Autonomous, No-Touch


The eight pillars of modern commerce

AlgorithmicDynamic Mobile Real-time

Frictionless Omni-ChannelPersonalized Transparent

Driving Customer Success


The Modern Commerce Maturity Model

Real-time

Perso

naliz

ed O

ffers

SpeedDays

Prec

ision

One

Size

Fits

All

Personalized

Frictionless

Omnichannel

Dynamic

Algorithmic

Real time

Transparent

Mobile


Question #3

What category best describes the current state of modern commerce in your company?

1. Not yet Started2. Mobile/Dynamic3. Algorithmic/Transparent4. Personalized/Omnichannel5. Frictionless/Real-Time


Different initiatives where dynamic pricing science may be included

Funded Initiative Business Case

Digital transformation Shift to Modern Commerce with Dynamic Pricing Science

Customer experience Create a consistent customer buying experience across every channel

Revenue and margin erosion Scale and execute dynamic pricing strategies that move with the market

Sales productivity Deliver winning quotes that grow margins

Price optimization and management Increase sales and margin growth through better insights and control

Revenue management Drive incremental revenue and profit through increased accuracy

Quote-to-cash improvement Maximize value of every deal


Question #4 What initiative does dynamic pricing science fall under in your company?

A) Digital transformationB) Customer experienceC) Revenue and margin erosionD) Sales productivityE) Price optimization and managementF) Revenue managementG) Quote-to-cash improvement

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