Digital Pricing:
Send your revenue & margins upwards.
Give B2B category & pricing managers tools to set better prices and lift profitability by simulating optimal price intervals on each product based on data and ML. B2B pricing should be value-driven. Not just cost-plus.
“Raising prices without losing volume.”
The dream for any business. And the reason to digitize your B2B pricing.
We identify optimal price levels for all your products by combining available data sources and machine learning. See products you sell with too little profit.
The latest B2B company we helped expects to lift profit margins by 30-50 million DKK this year.
See the ‘optimal price range’ for every product
With our pricing framework, we digitize your prices and put them into a formula.
That way, you’ll find the most appropriate Reference price range for each product, when all costs are accounted for.
When implemented, you can optimize product prices and service costs at the customer level based on the data you add – and the value you create for this exact customer.
Furthermore, bonuses and discounts become transparent to the sales rep and the customer.
Also see: How Lars, a B2B sales rep, ends up losing margins
Overview In a dashboard (see below):
- See pricing performance across categories, products, and white label products.
- See the optimal price range, lowest to highest, and see how well you sell within that range.
- Drill down and compare product and category pricing performance.
“B2B companies often struggle to reduce the gap between the value they create and the value they capture. ”
Peter Bak Torjusen, IMPACT Commerce
Building digital, dynamic & transparent B2B pricing
Our approach follows your starting point, situation, current data setup, and need for speed.
The process could look like this:
Transactional data
We gather all transactional data. That means every order line, detailed information about the order, sales channel, customer information, historical purchase prices, and gross prices. Typically, this data comes from ERP and goes back 24-36 months.
Product information, returns & claims
Granular category information, prices, promotions, product lifecycle (date for product introduction and discontinuation), assortment type, etc. This data comes from the PIM system. Returned or faulty products are included too, based on available data.
Sales and pricing policies
We add the things that also influence pricing: Competitor pricing, bonuses, customer discounts, annual agreements, category strategies, bundles, etc.
Oftentimes, the Cost-to-Serve or Cost of Goods Sold is not fully included in the price. And it’s eating your margins.
When you and we know these costs, we include them in the pricing setup.
The data platform is built as modules where new information and systems can be added, enriching data even more.
The purpose is to give your organisation a BI tool and platform that makes it easier for sales reps to actually sell, while knowing that they earn money. And give management a complete overview of the value of pricing.
We use AI and advanced modelling to create optimal price ranges that you can play with and adjust.
The algorithm will be tested based on your use cases and trained to do all the work and give you the right insights. Ultimately, making your decisions data-driven.
Making pricing operational
– a framework
The problems with B2B pricing that you solve by digitising
Product complexity – losing overview
Many B2B companies have over 200.000 products but no complete overview of costs, break-even, or margins on product or category level. Complexity has increased, and setting the right price on bundles, services, etc., is very difficult.
Cost-plus pricing doesn’t do the job
The cost-plus is still the primary pricing strategy in B2B, leaving great potential behind and often overlooking costs. We move you from cost-plus to value-based, digital pricing, and overview.
Who rules the world?
Often, individual sales reps have their own kingdoms. They own the customer relations and set prices themselves. Our framework creates cross-company transparency, aligned pricing, bonus and discount policies, and clear governance on who can grant discounts. Sales reps will still have their freedom, but within the borders of the overall pricing strategy and corporate goals.
Get started with digital pricing
Get in touch with Peter Bak Torjusen.
