Pricing Trends at #PPSSF2022: Omnichannel Pricing, Inflation, Value
By Zilliant
Oct 27, 2022
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Zilliant sponsored and spoke on stage at the annual Professional Pricing Society Fall Conference in San Francisco last week. Here are four learnings from one of the pricing industry’s most important events.
Solving the Pricing Puzzle at #PPSSF2022
The theme of the 2022 PPS Fall conference was “Solving the Pricing Puzzle.” It’s an apt analogy, as connecting the day-to-day complexities of pricing to corporate strategy and, ultimately, financial goals, continues to get more difficult. Externalities like inflation, digital commerce, competition, and supply chain issues get in the way of driving the right price to the right customer when and where they need it.
The conference featured keynotes, breakout sessions and panel discussions from a broad range of pricing experts across the industry spectrum. Read on for four key takeaways from the event.
B2B Omnichannel Pricing is Tricky, but Attainable
On Friday, Barrett Thompson took the main stage to deliver a timely keynote entitled “The Omnichannel Dilemma.” Thompson laid out the disconnect driving this dilemma: B2B buyers expect to be quoted accurately, consistently, and quickly in whichever channel they choose, yet legacy execution systems tend to create slow and inconsistent “dead experiences.”
Thompson identified localized pricing logic – the inherited, disparate, and insufficient pricing capabilities housed within ERP and legacy applications – as the number one roadblock to true omnichannel pricing. He also pointed out that over-generalized pricing strategies and a tendency to rely on manual, human-powered tasks slow the process further.
However, there is hope! Thompson captivated the crowd with an innovative approach to B2B omnichannel pricing that can be implemented without disruption to entrenched systems. A Real-Time Pricing Engine™ can become the centralized system of record for a company’s pricing logic, connecting to back- and front-end systems in real-time via API.
This approach creates price consistency across every channel and allows teams to update prices at lightning speed, while bringing in new data sources to take the omnichannel experience to the next level.
“When someone comes and says, ‘It would be great if our prices could respond to our inventory position.’ Now you could say, ‘You're right. We need to bring in one more input about our real-time inventory position into the centralized pricing engine and we’ll tweak the logic to modulate the price according to that.’ And the moment you make that change in the centralized pricing engine, every one of the channel systems is now smart enough to have prices that are responding to inventory decisions. That's an amazing capability,” said Thompson.
Pricing Software is Integral to Lasting Success
In a welcomed first-time event, the four major pricing software vendors shared the stage for a panel discussion moderated by PPS President Kevin Mitchell. Chief Marketing Officer Lindsay Duran represented Zilliant on the panel alongside representatives from PROS, Vendavo, and Pricefx.
The panel fielded a wide range of questions from Mitchell and the audience, allowing each vendor to provide nuanced takes on everything from data hygiene to change management to implementation timelines.
A common theme in the responses from the panel: regardless of the vendor that a company chooses, it is critically important to adopt advanced pricing software and make the leap beyond Excel. The level of complexity in the modern market combined with the massive influx of data from an increasing number of sources simply beckons for purpose-built pricing tools. It is quickly moving from competitive differentiator to table stakes.
“You have a number of market forces working in your favor to justify the investment in pricing software,” said Duran. “Once implemented, these tools elevate your role while making the job easier and more strategic to the business.”
How to Effectively Raise Prices
A hot topic throughout the event was how best to raise prices. Many pricing practitioners have spent the better part of two years pushing price up. But how surgical have those price increases been?
For most, the effort to raise prices strategically has exposed another data and manpower challenge. Blanket increases are generally counterproductive in the long run. But too often the “peanut butter spread” wherein prices are raised uniformly and without discretion is the default reaction to rising costs. Meanwhile, the arduous task of calculating and delivering increases to price lists and customer price agreements falls on the shoulders of overworked pricing teams.
In her keynote address, PPG Director, Pricing and Analytics Annie X. Wang talked about her intentional, customer-centric price increase approach, even as her company’s feed stock cost skyrocketed. She laid out six factors of a successful price increase, centered around fairness and trust:
Gain leadership commitment Secure cross-functional support Communicate and commit Consider all costs and cost projections Automate for speed and agility Leverage real-time price monitoring
“Most companies chase inflation,” said Wang. “Imagine how that feels in the customer’s shoes. Frequent increases will give them fatigue. We need to target our price increases intentionally.”
Shift the Conversation from Price to Value
As inflation eventually slows down, any new price increase initiatives will need to be driven by a value play. Two sessions drove this point home with useful insights into how pricing and sales teams can move beyond price.
Iron Mountain VP, Pricing & Revenue Management Steve Haggett talked about how, paradoxically, it is possible and preferable to sell value to your customers’ procurement departments.
Conventional wisdom has it that procurement people only care about maximizing discounts on each individual transaction. Haggett described why it is more important to them to save money for the company in the long-term. He recommends putting together a business case specifically for procurement to show just how your product or service will help them achieve their goals far beyond the initial transaction.
In his breakout session “Getting the Value We Deserve,” National Instruments Director, Global Strategy Pricing Matthew Comerford advised the audience on how to effectively respond to value objections. A repeated mantra in his talk was, “Price is not based on cost.” Instead, he advised sales reps to stick to a simple three-point plan:
Come prepared with smart price guidance Know your value proposition inside and out Communicate price and benefits
