Using a price matrix for setting prices contains an intrinsic amount of risk, due to many factors. For salespeople who have a broad customer base, it is especially difficult to know the optimal quote that will generate the maximum revenue without introducing the risk of losing customers.
Trial-and-error is not the best solution, due to the fact that once a customer is lost, or chooses a competitor, it’s unlikely they’ll return. Once you roll out a price increase, for instance, it can be like the roll of a die, which you can’t take back and re-roll or “do-over” even if you want to do so.
Software is available and increasingly being used by many businesses in the B2B market to optimize price setting in a way that maximizes profit while minimizing risk. A price matrix is generated through a solid scientific methodology that significantly reduces or eliminates risk, allowing for potential business growth and profitability.
The reins of control over pricing, goals and constraints are put back into the hands of the business owner when they have the capacity to know, through real-time modeling, how specific price changes will impact the immediate market, quantifying and calculating true price impact and response.
What makes this kind of software particularly valuable in generating a trustworthy price matrix is its ability to specifically tailor price increases to each and every transaction that is made. This is of course impossible using spreadsheet matrices and more conventional tools for calculation. But using the power of software technology, it is possible to refine prices to meet the criteria for every single customer, optimizing the best prices in order to create integrity, optimize profit, reduce risk, and increase retention.
Software that uses incoming transaction data can help to configure prices that are optimized not only for each customer, but each product as well. Given that each customer has a different understanding of product value, it’s possible to identify the products and prices for each customer that are driving the market in order to gain a better understanding of how each customer will respond to prices or price increases.
Pricing guidance is available immediately within the context of a specific deal that is unique, accurate, precise and speedy. Salespeople continue to generate quotes from a price matrix in the usual way, but receive up-to-date, real-time guidance from software that delivers on an unprecedented level of scale, precision and efficiency.
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, companies are using the unique combination of science and technology in MarginMax to efficiently manage and effectively optimize each and every price in a price 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