Pricing managers juggle a wide range of responsibilities: analysis, trend tracking, contract management, meetings, forecasts, product and customer segmentation, matrix updates and more. Their role is so critical to the profitability and success of a distribution company that it makes sense to explore ways to free up their time to focus on the highest priority, strategic tasks. This is where custom workflows through APIs and artificial intelligence come into play. These tools can help distribution pricing managers streamline pricing processes, increase efficiency, and ultimately drive profit and revenue growth.

The Power of Automated Price Updates

Instead of manually adjusting prices based on changes in market conditions or input data from sales teams, pricing managers can set up systems to automatically update these figures. This not only saves time but also ensures that the organization remains competitive and responsive to market fluctuations.

Distributors often grapple with the challenge of updating their pricing regularly, largely due to the pitfalls associated with manual pricing processes. These issues can create a ripple effect, impacting various aspects of business operations.

Manual pricing updates bring with them the risk of mistakes such as incorrect data entry or calculation errors. These errors can result in significant financial losses and harm customer satisfaction. Additionally, updating prices is time-consuming and resource intensive. It diverts valuable time away from key business tasks and strategic initiatives. This only gets worse as a distributor increases their business with new markets and product lines. Manual updating is simply not scalable.

Because of these issues, even if your analysis is efficient, the inefficiency of manual updating usually leads to suboptimal price optimization. By the time you get your price matrix updated, the market may have changed. Manual pricing updates often overlook real-time market fluctuations, competitor pricing, and changing customer demand. This makes it challenging to stay competitive and responsive to market changes. Manual price updates often lag market changes, giving competitors the upper hand as they can adjust their pricing more swiftly.

Manual updates frustrate everyone: pricing managers, sales reps, customers and partners. Updating prices across multiple channels, products, and locations manually can lead to inconsistencies and discrepancies. This confusion can deter customers and potentially result in lost sales. Updating promotional pricing manually, especially across multiple channels or locations, increases the risk of errors and inconsistencies. Distributors who work closely with their suppliers on pricing and promotions may find themselves out of compliance because of pricing issues.

The introduction of pricing software or AI-powered solutions can help distributors navigate these challenges. Distributors can leverage simulation and modeling to ensure their pricing strategy is truly optimized. By embracing automated price updates, businesses can enhance their pricing strategies and ultimately boost profitability.

Leveraging APIs to Eliminate Manual Processes

Modern and robust APIs play a crucial role in streamlining price updates. They offer a direct, automated communication channel between different software applications, enabling them to interact and share data with one another seamlessly.

ERP APIs facilitate automatic data transfer from one system to another. For example, if a pricing manager needs to update the pricing based on the latest market conditions or sales data, the API can automatically fetch this data from the relevant source (such as your distribution price optimization solution) and update the ERP pricing matrix. By automating data transfer and updates, ERP APIs eliminate manual processes, reducing the risk of human error and increasing efficiency. Pricing managers can focus on strategic tasks rather than spending time on data entry.

APIs can provide real-time updates, ensuring the ERP pricing matrix always reflects the most recent data. This is crucial in dynamic markets where prices can fluctuate rapidly. It also allows for faster data analysis regardless of the tools you use. This becomes even more powerful when your data strategy can be synchronized across all systems, ensuring consistency and accuracy.

Override Alerts

Overrides are common in distribution pricing management and sales, but if a particular item is overridden too often, it might indicate a problem. An automated override alert can flag such instances, triggering a review of the price in question. This helps maintain pricing integrity and alerts pricing managers to potential issues before they escalate.

Automated workflow alerts for pricing overrides offer numerous benefits for a pricing manager. Here are some key reasons why they would want to receive these alerts:

• Immediate Awareness: These notifications provide immediate awareness of any pricing changes made outside the established guidelines. This allows for timely intervention, if necessary, and prevents minor issues from escalating into major problems.
• Maintain Profit Margins: By being alerted to price overrides, pricing managers can ensure that discounts or changes don’t significantly erode profit margins. They can review the override and assess its impact on profitability.
• Consistency in Pricing: Alerts help maintain consistency in pricing across all sales channels. If a price is overridden too frequently, it might indicate that the original pricing may need to be reviewed and adjusted.
• Control Over Pricing Strategy: Receiving alerts gives pricing managers more control over the pricing strategy. They can ensure that any overrides align with the company’s overall pricing objectives and market positioning.

In essence, automated workflow alerts for pricing overrides enable pricing managers to respond proactively to changes, maintain control over the pricing strategy, manage risks, and leverage data for strategic decision-making.

Approval Workflows

Pricing approvals are a critical component in the pricing strategy of any distribution business, and they can take several forms. For example, a pricing manager might want to propose changes to a pricing matrix based on market trends, competitor analysis, or changes in cost structures. Alternatively, a sales representative might want to offer a substantial discount to a large client to close a deal or strengthen the relationship.

Automation speeds up the approval process by cutting down on manual tasks. Instead of waiting for email responses or meetings, the request can be processed immediately through the automated system, saving valuable time for all parties involved. the business grows, so does the volume of pricing changes and discount requests. Automated workflows can easily scale with the business, handling increasing volumes without compromising speed or accuracy.

Managers appreciate the control that automated workflows can give to their approvals. They can set parameters for when sales reps can offer discounts and get instant alerts when those parameters are exceeded, allowing them to intervene when necessary. Sales reps appreciate transparency and consistency in the approval process so they can be more responsive to customers. By setting predefined rules and criteria for approvals, it eliminates the risk of arbitrary decisions or deviations from the company’s pricing strategy. And with automated workflows, every approval request, decision, and relevant communication is documented and easily accessible. This transparency can boost accountability, enhance collaboration, and provide valuable data for future reference and analysis.

Forecasting and Analysis

Predictive analytics, powered by AI algorithms or reporting tools, can forecast future pricing trends. By predicting future trends, pricing managers can make proactive decisions that boost profitability and competitiveness. This technology has the power to project future pricing trends with a high degree of accuracy, providing invaluable insights that can be harnessed to refine and optimize pricing strategies.

Predictive analytics provides this crucial edge by enabling businesses to anticipate changes rather than merely reacting to them. By leveraging these predictive insights, pricing managers can formulate proactive strategies that don’t just adapt to the market but influence it.

The impact of predictive analytics on pricing strategy is far-reaching. It empowers businesses to make data-driven decisions, reducing reliance on guesswork or intuition. This not only leads to more precise pricing but also enhances profitability. For instance, if predictive analytics indicate an upcoming surge in demand for a product, businesses can adjust their prices accordingly to maximize revenue. Conversely, if a decrease in demand is forecasted, prices can be reduced to stimulate sales and avoid inventory glut.

Moreover, predictive analytics can enhance competitiveness. By predicting future trends, businesses can anticipate their competitor’s moves and respond strategically. If a price war is looming, they can prepare by optimizing their cost structure or enhancing the value proposition of their products. These tools make it easier to identify new market opportunities. By analyzing patterns and trends, businesses can uncover potential areas for expansion or diversification.

Contract Management

Too many distributors have a, “set it and forget it,” approach to pricing contracts Out of date pricing on out-of-date contracts can bleed your profit. Automating processes like renewals and approvals can significantly streamline contract management. This reduces administrative burden, ensures timely renewals, and keeps the focus on strategic pricing decisions.

One of the frequent pitfalls in managing customer pricing contracts is the lack of visibility over their expiry dates or any alterations that may be implemented regarding the supplier’s requirements. This oversight could lead to contracts remaining active significantly past their intended duration, or even agreements becoming obsolete due to external circumstances beyond the company’s control.

Contracts that extend beyond their intended period could result in financial losses due to outdated pricing structures. Similarly, agreements that become irrelevant due to changes in the supplier’s requirements could lead to compliance issues, potentially inviting legal repercussions or damaging the company’s reputation.

If a distributor doesn’t pay attention to an old contract, they could find themselves locked into a pricing agreement that no longer aligns with market conditions. This could mean paying more for stock than current rates, or charging customers lower prices than what the market can bear, both of which would impact profitability.

Similarly, if a supplier changes their requirements – such as delivery schedules, minimum order quantities, or quality standards – and the company is not aware of these changes, they might fail to meet these new terms. This could lead to strained supplier relationships, disrupted supply chains, or even breach of contract.

To mitigate these risks, companies should implement a systematic approach to regularly review and update their contracts. This process should involve not only checking expiry dates but also analyzing any changes in the supplier’s requirements. Regular contract reviews allow companies to stay abreast of any changes and adapt their strategies accordingly.

In addition to this, companies should consider leveraging technology to manage their contracts. Contract management workflows, for example, can send automated reminders about upcoming expiry dates or flag changes in supplier requirements, ensuring nothing slips through the cracks.

Transforming Pricing Processes: The Impact of Custom Workflows and AI

Distributors already have a plethora of tools within their reach, offered by their solution providers, that can significantly enhance their pricing workflows. These tools, which leverage robust APIs, artificial intelligence, and customizable reporting and analytics capabilities, can be used to optimize various aspects of the pricing process.

By setting up systems that automatically adjust prices in response to changes in market conditions or data inputs from sales teams, businesses can ensure their pricing always stays competitive and aligned with market dynamics.

• Sending alerts when price overrides occur or if a particular item is overridden multiple times can trigger a review of that price, helping to maintain pricing integrity and avoid potential revenue losses.
• Approval workflows ensure that all pricing decisions are made collectively and are in line with the company’s strategic objectives.
• Automating the process for evaluating and approving pricing discounts or overrides also contributes to improved workflow efficiency. It ensures consistency, transparency, and reduces the likelihood of human error.
• Forecasting and analysis, powered by predictive analytics, help distributors anticipate future pricing trends and accordingly refine their pricing strategies. This proactive approach, backed by AI algorithms and reporting tools, can result in increased profitability and competitiveness.
• Contract management workflows save time and prevent oversights by streamlining processes like renewals, approvals, and other related tasks.

Leveraging the power of modern technologies such as AI, APIs, and advanced analytics tools can revolutionize pricing workflows, leading to increased efficiency, competitiveness, and profitability. Your managed services provider can help you embrace these tools and integrate them into your pricing processes to help you stay ahead.