Distributors face uniquely challenging circumstances for pricing: razor-thin margins, an immense number of constantly-revolving SKUs, and a huge volume of daily transactions. Faced with such a daunting amount of pricing activity, many distributors set prices by simply “marking up” all of their items with a standard margin across many categories of products. As a result, salespeople often assume two things: that this “broad stroke” pricing technique does not reflect the different competitive environments that they have to sell into; and that the standard markup is conservative and contains “fat” that can be negotiated out. With a distrust of pricing guidelines and a lack of reliable cost and competitive data, salespeople often unknowingly negotiate their way into unprofitable deals while the home office wonders why margin targets are not being met.  Unfortunately, the high-velocity/low-margin environment that defines most distribution businesses leaves little room for pricing error – making the challenges of price setting and enforcement particularly critical. Recognizing the complexity of the pricing process and the huge impact it has on their margins; many leading distributors have looked to IT solutions to provide insight and control over their pricing practices. While enterprise CRM and business analytics applications have been touted as pricing tools, real world distributor experience shows that they are not designed to rigorously set and reinforce profit-optimized prices – especially in a highly negotiated, high-volume environment.

Symphony-Metreo’s Enterprise Pricing and Performance Management solutions span the communications and credibility gap between the corporate office and the field. Combining the empirical analysis of historical transactions and market factors, they allow managers to quickly and effectively make decisions regarding optimal price for a particular product, volume level and customer. Just as importantly, the solutions provide sales representatives with the knowledge they need to understand how a particular price was derived, as well as adjustable price parameters for negotiating deals with different types of customers. Collectively, these capabilities greatly increase consistency in the field and boost the likelihood of compliance with corporate objectives.

 
Automotive Consumer Products Manufacturing High-Tech Distribution Financial Services