pricing technology myths e book pb

8/12/2019 Pricing Technology Myths e Book Pb

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P R I C I N G B R E W R E S E A R C H R E P O R T

Seven Myths and Outdated Beliefs That Are Causing

Companies to Fall Further and Further BehindMYTHVS

REALITY

Pricing Technology


2/15

Pricing effectively in B2B has never

been easy. But today, increases in

pricing transparency, information

access, and global competition are

conspiring to make a difficult taskeven more challenging.

For many companies, memories of

the last downturn are all too clear.

And as a result, most are focused on

driving efficiency and productivity

to maintain financial health.

In this situation, pricing technology

would seem to be the right solution

at exactly the right time.

After all, pricing has more leverage

on profitability than sales volumeor operating costs. And technology

has long been a proven source of

efficiency and productivity gains.

So the combination seems ideal.

SOURCES: PricingBrew PricingPulse and SellingBrew SalesPulse Studies Copyright MindBrew May not be used or reproduced without permission.

Pricing Effectively

in B2B Is BecomingMore Challenging


3/15


4/15

At PricingBrew, we interact with

tens of thousands of B2B companies

across a variety of industries.

We conduct practitioner surveys

and interviews to uncover and

report on the most effective B2B

pricing practices and capabilities.

And weve made it our business to

stay up-to-date on the latest trends

and developments in the pricing

technology landscape.

Given the benefits that the pricing

technology users report, we wanted

to understand more about those

that arent using it:

Why arent these companies

using pricing technology?

What are the factors that have

been holding them back?

What do the technology users

know that others may not?

47% 53%

YES NO

Does Your Company Use Pricing Technology?


So Why Are These

Companies Sittingon the Sidelines?


5/15

Surprisingly, the common causes

of inaction weve identified arent

based on current organizational,

technical, or financial realities.

The pace of technological change

and development over the last 3-5

years has made it very difficult to

keep up and stay current.

As a result, many of the non-users

are simply misinformed about keyaspects of the pricing technology

landscape as it exists today.

In effect, these companies are being

held back by perspectives and views

that may have been accurate just a

few years ago, but have since beennullified by technological evolution

and advancement.

Seven of these pricing technology

myths and misconceptions are very

common...and costly.


Many Companies

Hold Outdated andInaccurate Views


6/15

Some companies believe that only

the largest companies can benefit

from pricing technology and that

their company is simply too small

to warrant it.

Because they could afford to fund

the initial R&D, multibillion dollar

companies were indeed the driving

forces behind the development of

the first major pricing solutions.

However, the efficacy of pricing

technology is less about scale and

more about complexity. And large

companies certainly dont have an

exclusive on having to price lots of

products to lots of customers.

Our research shows that while the

larger companies still represent the

bulk of the pricing technology user-

base, utilization amongst smaller

companies is growing quickly.

Its Only for GiantCompanies...WereToo Small for It


PRICING TECHNOLOGY MYTH

#

1:

35%

33%

17%15%

$5+ Billion $1-$5 Billion $500M-$1B $250M-$500M

Pricing Tech Users:Size of Business


7/15

Some companies are under the

impression that their industry is so

unique that theres no way pricing

technology could help.

They see companies in different

industries reaping the benefits of

pricing technology. Rather than

being encouraged and motivated,

they simply say, Yeah...but our

industry is different.

But no industry is immune from the

problems that pricing technology is

designed to address. And no sector

operates without buyers and prices.

Our research confirms that the use

of pricing technology isnt limitedto a handful of industries. We see

adoption and utilization across 14

different B2B verticals---from

high-tech and building products to

education and agriculture.


Its Only for CertainIndustries...And OurSpace Is Different

PRICING TECHNOLOGY MYTH #2:


8/15

Weve also found that companies

have a limiting belief that pricing

technology is only for certain

business models.

Manufacturers will conclude that

because they sell through channels

and are removed from the ultimate

customer that pricing technology

would be of little use to them.

But here again, wherever there is abuyer being offered a price, pricing

technology can help improve and

optimize those interactions.

While distributors and retailers

were indeed the primary users of

pricing technology in the past, ourresearch shows growing utilization

amongst manufacturers.

These manufacturers are clearly

tired of sending their margin

dollars downstream.


Its for Retail andDisties...But Werea Manufacturer


11%

52%

37%

Services Manufacturing Distribution & Retail

Pricing Tech Users:Type of Business


9/15


10/15

Holding some companies back is

the belief that if they implemented

pricing technology, theyd need to

hire a lot more pricing people just

to manage the new systems.

This is a perplexing misconception

as technology can improve speed

and efficiency and often reduces,

rather than increases, the need for

additional headcount.

Recognizing how technology can

enable human resources to scale

themselves, companies with very

small pricing teams are leveraging

pricing technology to accomplish

what even the largest pricing teams

cant hope to accomplish manually.

According to our research, nearly a

third of the companies making use

of pricing technology have no more

than five pricing people.


Wed Need a LargePricing DepartmentJust to Manage It


31%

23%

21%25%

1 to 5 6 to 10 11 to 25 26 or More

Pricing Tech Users:Size of Pricing Team


11/15

Even just a few years ago, pricing

technology required a multimillion

dollar investment. So its not too

surprising that many companies

still believe this to be the case.

And while pricing technologies can

be expected to generate significant

ROI, returns are irrelevant when

you simply do not have the money

to invest in the first place.

Today, however, the investment

picture looks very different.

As vendors have moved to SaaS

delivery, theyve also embraced

subscription pricing to reduce the

upfront investment and align theongoing costs to the benefits.

The most sophisticated pricing

technologies are now within reach

for the cash-strapped companies

that need them most.

Its So Expensive...Theres No Way WeCould Afford It




12/15

Amongst the companies not using

pricing technology today, there is a

shocking lack of urgency.

To their way of thinking, it doesnt

matter when they get started and

they can hold off until they have no

other choice but to act.

The problem, however, is that there

is an experience curve with pricing

technology---i.e. the longer you useit, the more effective you become.

And those who are currently using

pricing technology (many of whom

are likely to be competitors) are not

standing still, waiting for others.

As our research shows that nearly

60% of current pricing technology

users plan to take it even further,

the capability gap between the

haves and the have nots can

only get wider.


Weve Still GotPlenty of Time toGet Caught Up



13/15

As companies tend to be secretive

about their pricing, its easy to miss

the fact that pricing technology is

becoming much more ubiquitous

and mainstream in B2B.

Companies large and small, across a

broad range of industries, are using

pricing technology to improve their

performance and gain advantage.

For others, however, inaccurateviews and outdated beliefs about

pricing technology are keeping

them on the sidelines and causing

them to fall further and further

behind in the capabilities race.

Dont let myths and misconceptionshold you back. In just the last few

years, the technology landscape has

changed dramatically.

So even if youve looked before, its

time to look again.

THINK

AGAIN


Myths Are Costly...

the Reality Is MuchMore Profitable


14/15

To further the advancement of best practices and innovation

across the global business community, free distribution of this

research report has been generously underwritten by:

http://www.pros.com/solutions/pricing-effectiveness/?utm_source=3rd-party-website&utm_medium=referral&utm_campaign=WS-MindBrew-Pricing


15/15

A range of B2B topics from

segmentation and analytics

to value-based pricing and

pricing technology.

A variety of resources from

case studies and research

briefings to step-by-step

tutorials and video guides.

Exclusive monthly webinars

on topics suggested by ourcommunity of subscribers.

Expert interviews with top

consultants and real-world

pricing practitioners whove

been there, done that.

Training courses covering

value-based pricing, sales

team adoption, and strategic

pricing processes.

Copyright MindBrew LLC May not be used or reproduced without permission.

The PricingBrew Journal gives you and your

team on-demand access to an ever-expanding

treasure trove of proven practices, timely research,

real-world strategies, and expert insights.

GET YOUR FREE CATALOG

www.PricingBrew.com

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