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B2B Pricing Improvement is Not a Project

David Anderson< David Anderson March 10, 2022

One thing I see lacking in business projects around “pricing transformation”, particularly in the realm of data-science /AI modeling, is often a long-term focus around sustaining change and improvement that results from project-driven events or initiatives.   

Price improvement and commercial excellence should not be fleeting initiatives. They require an eye toward sustained operation and delivery of improvements at a reasonable level of effort.  

It’s relatively easy to generate a snapshot set of target prices, or generate a price increase file for products or customers.  It’s another question to think about a sustaining capability to do these things. But these are exactly the considerations that need to be top of mind as businesses engage in hiring data scientists or consultants to work on pricing. 

B2B Pricing Improvement Needs a Longer View

The economy at present is characterized by substantial disruption, be it supply chain logistics shortages, pandemic demand winners and losers, or economic sanctions.  Many businesses are being caught flat-footed in their ability to simply execute the changes they desire to implement.  Most pricing consultants I know are presently working overtime as businesses invest urgently in efforts to react to these disruptions, as they need to keep up with cost or market price changes. 

My main argument today is that businesses need to look hard at current emergency initiatives and plan for capabilities beyond a one-time reaction.  Today’s circumstance only reinforces that a business makes money – or doesn’t – based on its standing capability to change course whenever it needs to make adjustments. 

This means thinking beyond today’s emergency to tomorrow’s ability to act proactively in the face of changing circumstances. 

Investing in a proper enterprise capability for price execution or pricing guidance on a continuing basis may be a level above efforts to execute a project. Yet we have found that customers who think about proper B2B pricing improvement capabilities and then expend the effort to ensure their implementation are very likely to exceed 5-10x the value compared with one-time consulting-driven or project-focused events. 

What scenarios are increasing the pressure on pricing teams?

  • Volatile changes in input costs / cost of goods (oil, fuel, lumber, chemicals, metals).
  • Labor shortages, rising wages (low unemployment, immigration policy, pandemic).
  • Abject shortages in materials (semiconductors & auto prices). 
  • M&A activity (driven by declining market values, capital availability). 
  • Sanctions (Russia currency and pricing, business suspensions).

Calling on Pricing Improvement Expertise

If you are interested in sustaining price improvement efforts into the future with investments in robust commercial excellence and pricing capabilities, give us a call

Vendavo specializes in technology that can turbocharge and sustain B2B pricing improvement with operational capabilities that can, at low ongoing effort, enable your business to automate price administration, optimize pricing, and streamline your commercial process. Even better, these revelatory new capabilities will not require nearly the effort required for manual-excel-based or one-off-model project-based pricing initiatives.