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January 11, 2018
How to stop worrying and start embracing instant pricing
By: Brice Rey-Herme
How to stop worrying and start embracing instant pricing

Pricing is one of the most critical functions to get right for any organization and has a disproportionate impact on the bottom line compared to other levers. The goal is straightforward—get the right price to the right customer at the right time. But with the fast pace of business operations, accomplishing this goal has never been more challenging and worrisome.

Companies oftentimes believe pricing is so consequential and difficult to get right, that it is generally left to humans to set, review, analyze and approve. However, new big data analytics have changed the pricing game through algorithms and machine learning by applying data, science and technology to pricing. The result is an organization with empowered sales, accelerated pricing and improved margins.

Getting pricing right comes down to a few critical success factors: Strategy, Organization, People, Technology and Analytics.

Big data has changed pricing by applying data, science and technology to empower sales, accelerate timing and improve margins.



    Having a clearly defined pricing strategy seems like a no-brainer. However, we often find that while a pricing strategy is defined, it is not consistently executed. This second step is essential to achieving price optimization and automation. Automated pricing should align to your pricing strategy and the desired outputs. If the automation is working but the strategy isn’t aligned locally, then the tool will ultimately be blamed.

    To get the right price to the right customer at the right time, you need to understand what attributes drive a customer’s willingness to pay. Identifying these attributes is at the center of strategic price optimization and getting it wrong will trigger inconsistencies with copious discounts that erode margins. Then, to minimize margin losses, additional levels of approvals will be introduced, leading to delays in closing deals, resulting in a frustrating cycle.

    Instead, you want to put yourself in a continuous cycle that starts with the right pricing attributes, incorporates the right strategy and price and ultimately drives faster pricing and better sales.


    Who owns pricing? It’s a simple question that rarely has a simple answer. To achieve pricing agility, there needs to be a clear owner to drive a consistent pricing strategy. We believe that having a centralized and dedicated pricing team that constantly thinks about the customer’s perceived product value and manages pricing rules is a best practice. This team can drive policy and process consistency to optimize the strategy in place.


    Pricing is a stirring topic. The thought of automating pricing and discounting makes just about anyone nervous, but it is quickly becoming a necessity in the age of digital commerce. To be successful, organizations are embracing the paradigm shift to instant, automated pricing.

    Here are a few techniques to stop worrying about and start embracing instant pricing:

    • Build a business case. Lead with a business case showing the potential revenue and margin growth from automated pricing. The ROI is unquestionable.

    • Highlight the benefits. Sales, partners and customers will all significantly benefit from instant pricing in the short- and long-term.

    • Be transparent. Share the pricing strategy, its attributes and how it is derived to build confidence in the approach.

    • Prove value. Implement a pilot initially to generate baseline metrics before launching on an organization-wide scale.


    Responding to clients with instant, market-relevant pricing provides sales representatives a competitive edge. Automated pricing provides:

    • Real-time pricing guidance based on market-relevant pricing and historical data

    • Real-time deal profitability analysis

    • Pricing overrides and approval reports

    New technologies are enabling new ways to provide optimal price instantly and accurately. However, make sure you select the right platform to fit your needs. Find a big data driven Configure, Price, Quote (CPQ) vendor that can apply complex algorithms to successfully build your pricing.


    Establish key performance indicators (KPIs) for your organization that will help you identify what is driving value and what needs improvement. It is critical to develop the right analytical reports and dashboards to clearly measure and track these KPIs is important.

    Planning ensures you have the required data to measure KPIs, track trends over time, indicate where corrective action is needed, and measure success. All too often, this step is missed and there isn’t sufficient data for critical reporting and analytics.


    Price setting and execution is a daunting task for many organizations. Consistently following the guidelines laid out here can enable you to reap true benefits of price optimization and price analytics.

With contributions from:

  • Anthony K. Milani

  • Lex Hallenberge

  • Omkar Bhuptani

  • Swathi A. Reddy

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