Pricing Pains? More CFOs Turn to Software for Better Profits

13.10.2011

Software offerings from the range of providers --- mostly aimed at transmitting data to individual sales personnel --- have multiplied to help business-to-business customers cope, he says. In decentralized sales operations, especially, "companies today have very rich data, but they don't have the tools to utilize that data to help them price better." Pricing-optimization software lets companies "create like segments that behave together," something that normally is "a very heavy, manually intensive process." Using his company's software, he says, "you manage your discount policies, compare segments that are alike," and include information, tailored to a company's own situation, to help "focus on moving your lowest prices up to an average price."

PROS got started 25 years ago, helping airlines with yield management: the near-science of pricing airline seats based on demand and many other factors. "Seats can get spoiled, and you need to get the right price for the right fit," says Reiner, whose company, he says, still has 80% of the market in an airline yield-management business that has become very mature.

One key measurement of today's wide range of pricing-optimization software products for various industries did derive from the lower-tech airline model: an evaluation of the customer's "willingness to pay," using, in the airline case, booking records, and indications such as whether ticket-buyers planned a short stay, or business or vacation-based flights.

For PROS and other software providers, the information processed in the front-end for corporate clients becomes extremely simple when it is processed for sales personnel on the back-end. It may arrive in the form of a simple quoting tool, product by product, with a target price, a stretch price, and a floor price that sales can use, depending on the situations encountered on-site.