When pricing strategies and sales execution are in sync, companies can drive profitability and reach their sales targets. The right tools make this possible. In this article, Kamal Sabnani, Principal Product Manager at Vendavo, explains how Vendavo’s Deal Price Optimizer improves pricing strategies and how the Impact Analysis Dashboard inside the solution enables data analysis and better decision-making.
The main goal of a pricing organization is to create effective pricing strategies. But it’s just as important to check in and see if these strategies are working well.
Every pricing team aims for positive results, and it’s not just about personal satisfaction. It’s also about effectively communicating and persuading the sales department to adopt the proposed pricing strategies.
This requires:
- Building trust with the sales team about recommended prices
- Showcasing how these prices can drive both the top- and bottom-line for the company
- Demonstrating the financial upside of adhering to the pricing recommendations
- Fostering enthusiasm among the sales personnel
When pricing strategies and sales execution are in sync, companies can drive profitability and reach their sales targets. You need the right tools to make sure these plans and tactics are as effective as possible.
Let’s examine the Impact Analysis Dashboard in Vendavo’s Deal Price Optimizer (DPO) and how it can help your organization achieve maximum impacts.
The Basics of Deal Price Optimizer and Impact Analysis Dashboard
Vendavo’s Deal Price Optimizer is an artificial intelligence (AI)-powered solution designed to analyze transactional data and optimize prices for each customer. DPO incorporates various AI models, but users get complete transparency so they can monitor, adjust, and regulate these models. You can do this by modifying algorithmic parameters through the user-friendly graphical user interface (GUI).
From our experience, the most effective approach utilizes data science techniques and models that make sense to business stakeholders and work alongside human intelligence.
After the pricing team has set the optimal prices, they typically need to answer two fundamental questions:
- What potential increase in revenue or margin can we achieve?
- Can we pinpoint the primary drivers behind the financial impact?
This is where the Impact Analysis Dashboard within DPO comes in. This dashboard was designed with those questions in mind, giving the pricing team the power to guide and fully control the alignment of prices with their main pricing strategy.
This is achieved through two key functions:
- By estimating the comprehensive financial impact linked to optimal prices
- By offering a breakdown of the contribution made by each business driver
This process is facilitated by a user-friendly and intuitive UX interface, allowing users to effortlessly visualize incremental changes in revenue and margin.
Key Components of the Impact Analysis Dashboard
Now, let’s look at some of the key insights provided by this dashboard and how they help with price optimization.
- Impact breakdown
Users can see a breakdown of the overall financial impact by individual levers such as Optimization, Pricing Guardrails, Pass-Through, Business Rules, or Manual Overrides.
- Simulation capabilities
This capability enables users to explore different what-if scenarios and provides insights into potential outcomes. Users can experiment with diverse optimization settings, max price change constraints, or integration of strategic business rules.
- Impact of change in costs/list prices and manage pass-through
Users can analyze how changes in costs or list prices affect various aspects of the business, such as revenue and margin, so organizations can make informed decisions on their pass-through strategy. For example, there are instances where businesses may choose to absorb a portion of the increase to stay competitive, resulting in a pass-through rate lower than 100%. There are also situations where costs may decrease, and businesses have the option to retain the cost savings rather than passing them on to the end customer.
- Forecast adjustment based on realistic adoption rates
Negotiations are common between a buyer and seller in B2B, so the product may not always be sold at the price recommended by the pricing organization. This feature enables users to adjust forecasts by considering realistic adoption rates.
- Review granular details of the overall impact
This feature gives users comprehensive insights into the overall effect of pricing decisions or modifications. It enables the breakdown of the overall impact across various pricing dimensions and facilitates the identification of significant contributors to the impact, such as specific products, customer segments, or other factors. This allows organizations to fine-tune their pricing strategies and improve performance.
- Download granular data
This feature enables users to download detailed, granular data for further analysis or reporting. By accessing raw data at a detailed level, users can perform in-depth analysis, generate custom reports, and gain deeper insights into various aspects of their operations. This enhances flexibility and facilitates data-driven decision-making.
Data-driven decision-making is key in both pricing strategies and business success. The ability to access data and analyze it is essential for staying agile, adapting to market changes, and making strategic choices that contribute to long-term success in today’s dynamic business environment. You need a robust tool to help ensure your pricing strategy is as effective as possible.
How the Impact Analysis Dashboard Can Help Your Business
A successful pricing strategy involves developing effective pricing plans and ensuring their ongoing success. You need to build confidence within your sales team, emphasize the financial benefits of the suggested prices, and foster enthusiasm.
Integrating AI-powered tools, like Deal Price Optimizer, offers a transparent and user-friendly solution to analyze transactional data and optimize prices tailored to individual customers. The Impact Analysis Dashboard assists with estimating financial impacts and providing a breakdown of contributions from various business drivers.
By aligning pricing strategies with sales execution and utilizing comprehensible data science techniques, companies can enhance profitability and achieve their sales targets.
How Vendavo Can Help
Ready to elevate your pricing strategy and boost your business’s profitability? Vendavo’s expert team and innovative tools are designed to empower your pricing team and enhance your overall sales approach.
Don’t miss out on the opportunity to transform your pricing strategies and achieve success. Reach out today to request a demo.