Traditionally, price management and optimization have been contained to certain industries, such as large-scale manufacturing and chemicals. Those industries involve potentially tens of thousands of stock-keeping units (SKUs) covering a wide variety of products and price points. For many organizations, pricing systems are “cost plus” or “follow the leader,” not typically designed to invoke optimization but rather just move pricing along. Price management is often seen as a complex, arduous task that yields small returns for the effort it dictates, and not a strategic lever.
However, competitive needs, multichannel sales and different costs of customer acquisition are forcing organizations to rethink this angle. Recent advances in the collection, collation and analysis of data have made pricing optimization a more practical proposition for a wider range of organizations. As certain business models shift — like the rise of the subscription economy and multichannel selling — vendors like Pricefx are creating “fast-start” data models for pricing optimization. These systems remove the complexity of setting up a pricing optimization platform, making them a prudent investment in any organization. Yet, it’s my assertion that by 2025, fewer than 1 in 10 organizations will have pricing optimization applications integrated with configure, price, quote applications to help optimize revenue potential.
Pricefx is a SaaS vendor specializing in cloud pricing optimization, management and CPQ. Its platform is divided into three areas: Plan, Price, Profit.
- The “plan” portion helps identify optimal margins and pricing opportunities.
- The “price” capability offers artificial intelligence-powered optimal price-setting and price-management tools.
- The “profit” applications include CPQ, AI-powered pricing simulations and calculations as well as deployment via CPQ and centrally managed standard pricing.
Pricefx focuses on quick and easy implementation. The vendor calls its activation packages Lightning activation, which includes a full suite of standard pricing analytics, management and CPQ, all designed to go live in 14 weeks. The platform is designed around pre-built data models that use connectors to an organization’s data, which explains the speedy implementation process.
This has been a busy year for Pricefx. The vendor completed an acquisition of Brennus Analytics, a French start-up that offers a fully configurable AI technology that provides complex optimization capabilities. Pricefx also added PriceFXPlasma benchmarking to its platform, which provides industry-level benchmarking to business-to-business enterprises, powered by global management consulting firm Bain & Company. This gives customers the ability to identify insights and measure performance against other organizations in the market. The vendor also announced an increased focus on delivering the shortest time to value through fast-start implementation.
Pricing optimization is now important for all organizations, not just specific industries. An example is the rise of the subscription billing model, once also a complex process but now table stakes in the software industry. From enterprise subscription usage to consumer entertainment bundling, many products and services require multichannel price optimization which need to be analyzed and calculated quickly in order to increase revenue and be successful.
Organizations moving to or already using some form of subscription economy should consider Pricefx to optimize pricing systems. Pricefx’s fast-start implementation is a key selling point and is designed to increase revenue and optimize revenue growth. Pricefx has made large leaps in the past year to bring quick and easy value to its customers and has also shown that price optimization is not just for specific industries but rather every corner of the digital market.
For further reading on pricing optimization, check out the Analyst Perspective: Pricing Optimization Software Helps Maximize Revenue.