Xylem Prices Spare Parts and +1M Configurations Profitably with Vendavo
Discover how world’s leading water technology company benefits from value-based pricing and faster, more accurate quoting.
Highlighted Business Outcomes
Faster, more accurate quotes
Quick, accurate quotes across an extensive product portfolio with millions of possible configurations
Improved overall efficiency
Boosted operational efficiency by streamlining workflows and reducing pricing inconsistencies
6% net price improvement
Xylem’s price improvement led to $700,000 in additional revenue, demonstrating the significant impact of strategic, value-based pricing
Overview
Xylem, a global leader in water technology, partnered with Vendavo to optimize pricing strategies and boost profitability. The company offers innovative products and solutions for water transportation and treatment to address critical challenges like water scarcity and sustainability. With more than 23,000 employees, Xylem operates in over 150 countries and generates approximately $8 billion in annual revenue. The organization supports diverse industries, including municipalities, agriculture, and industrial sectors, driving both environmental and economic impact through advanced technology and strategic partnerships such as its collaboration with Vendavo.
The Challenge
Managing spare parts and product lifecycles is challenging, especially with fluctuating demands across multiple markets. To improve pricing accuracy, Xylem focused on identifying key price drivers and aligning strategies with customer-perceived value across a wide range of products and configurations.
By leveraging AI/ML pricing techniques, they built a framework that simplifies new parts pricing with easy maintenance and revisions. Their approach began with prioritizing high-profit parts, gathering customer insights, and conducting market surveys with customers and internal teams across eight countries.
We now have a value-based pricing approach. So we’re looking at ways to streamline the pricing process for our commercial teams, our salespeople, and our customers.”
Christian Westergren
Director of Product Management
The Solution
Xylem partnered with Vendavo to advance its pricing strategies for spare parts and implement a Configure, Price, Quote (CPQ) solution for configurable products. With 300 base products and millions of potential configurations, the challenge was to price accurately without creating excessive part numbers for unsold variations, which could overwhelm resource planning systems.
Vendavo Pricepoint gave Xylem real-time visibility into pricing and quoting processes. Automated workflows reduced manual tasks and pricing inconsistencies, enabling commercial teams to deliver faster, accurate quotes. This collaborative approach aligned product prices with market value, driving profitability, operational efficiency, and customer satisfaction.
Customers have been very pleased with the live quote process. It eliminates the opaque, black box feeling and long wait times of the previous quote method and they can instantly see what other options do to their pricing. When trust levels go up, sales go up.
Niklas Linström
Pricing Manager
The Results
With Vendavo’s support, Xylem identified three levels of key price drivers, integrating customer-perceived value with product attributes to develop AI/ML-powered pricing techniques. This pricing framework enables seamless maintenance and quick revisions, ensuring alignment with Xylem’s value-based and market-driven strategies.
The project delivered transformative results: net prices rose by over 6%, adding $700,000 in additional revenue. Customers appreciated the transparency and faster quote delivery, with one distributor noting that shorter lead times reduced downtime. Building on this success, Xylem expanded value acceleration initiatives across other brands, driving further growth. These efforts not only boosted financial performance but also streamlined operations, minimized inconsistencies, and improved efficiency. Xylem and Vendavo continue to collaborate to refine pricing strategies, ensuring sustainable growth and long-term profitability.
I receive a lot of questions about why pricing is the way it is and now I can quickly look up the product and explain the logic of the pricing. Sales now agrees and can defend that price.
Niklas Lindström
Pricing Manager
Fireside Chat with Niklas Lindström
In this Fireside Chat from Vendavo’s Growth + Profitability Summit 2023 in Stockholm, Chris Kennedy-Sloane, Business Consultant at Vendavo, talks with Niklas Lindström, Pricing Manager at Xylem, about advice for pricers who have to showcase value to the organization, the importance of having the right internal messaging, and current trends impacting pricing and business.
We analyze the data, we come up with new prices, and we already see a fantastic result. Overall, the net price effect that we have seen from this project is more than 6% up and that is generating an additional revenue for us around 700,000K.”
Christian Westergren
Director of Product Management
About Xylem
Overview
Xylem delivers advanced water technology solutions to address critical global challenges in water transportation, treatment, and sustainability. With over 23,000 employees in 150+ countries, Xylem serves industries such as agriculture, municipalities, and manufacturing. The company generates around $8 billion in annual revenue and combines innovation with strategic partnerships to drive both environmental impact and business profitability.
Fast Facts
Website: www.xylem.com
Industry: Renewables
Region: Global
Employees: 23,000+
Revenue: $8 billion
Products used: Intelligent CPQ, Vendavo Pricepoint