October 18, 2016
It’s that time of year when people love to talk about “ghoulies and ghosties and long-leggedy beasties.” The nip in the air suggests there’s more to fear than just the impending winter. In keeping with the season of scare we thought about the things that scare us. The one thing all of us agreed upon is the prospect that enterprises across the world continue to incorrectly price deals because they do not have access to the right data and processes to maximize profits.
There are several real tricks and treats that the world of pricing and deal management can use. This Halloween season we share with you 4 such spine-tingling ideas that can bring you the sweet, sweet joy of additional profits.
- Ghosts of past deals have stories to tell. The very reason that the world of analytics exists is because our past hides some very important lessons for us. In the world of deal-making, it is important to know what worked in the past and what did not. All previous deal history offers a rich collection of insights that unfortunately few companies use for all their worth. Win-loss data, when analyzed along with prices, provides insights into what the optimal winning price for the current deal may be.
- Make Big Data less terrifying for Sales. Big Data can make the best of us break into a cold sweat. While delving into pricing or deal data, it’s critical to ensure you know what you’re seeking. Segmenting, slicing, and dicing your data to make it relevant is very important when looking at deal history. Analytics tools now handle large volumes of complex pricing data with reasonable ease. Companies must ensure that Sales and pricing / deal desks can look at the most relevant slice of data when creating or approving quotes.
- Eliminate the horror of lost profit opportunities. Pricing deals to maximize profits is a case of duality playing out in the enterprise. The Yin and Yang in this case exist in the desire to price high enough to maximize profits while not losing volume. We call these two forces Pricing Power and Pricing Risk respectively. Without a data-based understanding of these two opposing forces, Sales may either end up pricing deals based on gut feel and risk leaving money on the table or lose deals due to very high prices. Companies that build data models based on previous deal history have a precise understanding of their Pricing Power as well as Risk. Based on these data models, algorithms can be used to determine a range of optimum prices for a deal.
- Send spookily relevant deal insights to Sales. The role of Sales doesn’t end with a quote getting approved. They also have the last-mile responsibility of ensuring the deal is won. This means they’re on the road a lot and often at the wrong end of a pointed or loaded question from a customer or prospect. Here, data plays an important role. It is important that the Sales rep can access relevant insights at his or her fingertips and provide timely answers that help defend quotes. Some of these insights may include previous quotes, buying behavior, peer group insights, competitor prices, discount levels, cost breakdowns, etc.
We hope you found these insights spook-tacular. Have a great Halloween…but do remember to slay the possibility of lost profit opportunities!