Written By: Net at Work
What is intelligent pricing?
Intelligent pricing is a data-driven approach used by many of today’s small-to-mid-sized distributors that provides optimal pricing based on historical buying behavior, real-time demand, location, and other factors. As more distributors seek better ways to maximize profitability, strategic pricing has come to the forefront as an agile way to reduce revenue leakage and protect margins.
To explore this approach further, Industrial Distribution Editor David Mantey hosted technology experts from Net at Work for a discussion of the science and strategy behind intelligent pricing, and the impact distributors can expect from instituting such a distribution pricing strategy through their digital operations platform (DOP).
From a patchwork of processes to next-generation enterprise resource planning
Executives and employees in the modern distributor may wear multiple hats, so the process of researching, implementing, and optimizing new enterprise resource planning (ERP) software can be left on the back burner indefinitely. Therefore, pricing may involve trying to match information between invoices and customer feedback, guesswork, and working with disparate data from spreadsheets and various software programs.
But this approach can become problematic, especially in the complex, volatile environments faced by many distributors. And if a company experiences costly errors or avoidable financial impacts because of this patchwork, they may quickly become reactive instead of proactively addressing the root cause through next-generation ERP and CRM connected via DOP.
DOP is the successor to previous generations of accounting and business management software. This platform extends ERP functionality to include business intelligence and analytics, eCommerce, Warehouse Management System (WMS) and more.
Intelligent pricing is enabled by DOP through its innate data sharing and analysis capabilities. Net at Work Consulting Manager Jennifer Ma cited intelligent pricing examples within NetSuite. “Distributors can establish customer-specific and currency-specific pricing to keep pricing consistent across all channels. For rebates and trade promotions, you can target specific customer accounts through logic, for instance, to move stock or expand sales. By having pricing management within a centralized solution, distributors can automate the entire process – from pricing creation, execution, accrual and reconciliation of vendor and customer rebate programs.”
- Strategies for using intelligent pricing to instill a sense of confidence and responsibility in your teams
- The benefits of working with a technology advisor to create a specialized digital portal, even with complex products and pricing, thus cutting down on the management needed with a large or complicated catalog. “Our consultants have experienced many of the problems our customers face, so we’re well-equipped to come up with creative solutions to help you,” says Ma.
- The possibilities unlocked through using a DOP to deepen reporting and customer intelligence. This can include gleaning data that may not appear in ERP, such as information about potential lost sales.
- How to vet your company’s existing technology to see how it’s currently advancing your goals and objectives, and who should be involved in this process to make sure that you have a clear picture of how it’s currently functioning
Practice Director Chris Cleary relays his experience with intelligent pricing: “We’re able to see that clients utilizing our eCommerce solutions [tied with Acumatica] are able to cut down on the complexity of managing complicated inventory environments, including SKUs and other attributes.”
Check out the full video podcast recording, “Executing Intelligent Pricing for An Agile Approach to Profitability,” to learn more about how your company can build a DOP that enables you to set the right pricing at the right time to the right customer through the right channel.
About the Author
Founded in 1996, Net at Work is one of North America’s largest SMB technology advisors. Our award-winning consultancy offers a rich portfolio of next-generation technology, industry expertise, and services to help organizations derive value from the transformative benefits of technology. Through the integration of ERP, HCM and/or CRM solutions, Net at Work builds unique, industry-specific digital operations platforms that enable companies to compete more effectively in today’s digital economy. For more information, visit www.netatwork.com.