"Spend any time listening to vendors of B2B pricing analytics solutions, and their pitches can be compelling. Readily peppered with phrases such as “scientific analysis,” “big data,” and “profit optimization,” they paint an alluring picture of growing revenues and accelerating profitability.
In short, the prospect they hold out is that by better understanding how prices are set, and how customers react to those prices, companies can not only extract higher prices and profits from existing customers, but pitch for business from new customers at price levels that are most likely to result in a profitable sale. Put another way, by analyzing the myriad pricing decisions that a typical Fortune 500 company makes in a given month or quarter, pricing analytics can help spot:
• Sales representatives who are pitching prices too low, in order to meet internal target or bonus levels;
• Customers who receive prices and discount levels that aren’t appropriate for the volume of sales they bring to the business;
• Products that seem mispriced in relation to other products which offer a similar feature set or benefit proposition.