Best Pricing Software
Buyer's Guide
Pricing your product isn’t as easy as you’d think. Plenty of variables play a role in determining whether or not you get it right. And getting it right is critical. Poor pricing practices can significantly impact your bottom line. On the flip side, getting your pricing right can make a massive difference, attracting new customers and saving money in the process.
Using the pricing waterfall, a one percent increase in price could lead to an eight percent increase in profits. So, how do you determine if the price is right? It can’t be completely random and subjective, right?
One facet of CPQ software’s “big three,” a pricing solution is one way to ensure you’re on the money, so to speak. If used properly, pricing software can help you manage, define and determine the best pricing strategies for your particular business. In this article, we'll break down what pricing software is, what it does, how it works and why the right software can make a massive difference for your business.
We’ll dig into some of the key features and benefits in detail, touch on pricing considerations and cover some of the best pricing software available on the market today.
Let's delve in!
Executive Summary
- Fluctuations in price can cause margin leaks and revenue losses. Price management software can help you find the optimal pricing using historical data.
- Using a pricing solution can improve and speed up sales cycles with the help of automation, pricing rules and exceptions.
- The right software will factor in market conditions, competitor pricing, the type of product and its availability, promotions and revenue goals.
What Is Pricing Software?
Pricing software is a solution that helps you find the optimal price for your product by factoring in promotions, product type, market conditions, competitor prices, exceptions and more. It helps you automate pricing processes by analyzing historical data to determine the best price possible.
The right pricing solution will help eliminate manual processes, increase your margins and speed up sales cycles. With the help of advanced tech, like machine learning, big data and AI, a pricing solution is a great option for businesses of all shapes and sizes.
It’s not quite a magic wand you wave to figure out the ideal price, but it comes pretty close.
Primary Benefits
Implementing pricing software is a big decision to make. It involves training and investment, so you want to ensure the pros outweigh the cons. Here’s how the right solution can help your business stay competitive.
Maximized Profit Margins
To err is human, but mistakes made while manually processing prices can significantly impact your margins. Automated pricing management, visual pricing summaries and anticipatory impacts on price changes are a few effective ways of isolating and eliminating lost margins.
In addition, guided cross-selling and upselling can help maximize deals, which again helps improve those ever-important margins.
Shorter Sales Cycles
Have you ever lost a sale because you couldn’t get price approvals or work through the paperwork quickly enough? Converting those lost sales into actual sales makes a massive difference for businesses of all sizes.
Rule-based pricing and alerts speed up the quoting process by telling you when customer preferences and competitor prices change significantly.
Added Efficiency
Another benefit of pricing software is the time you’ll save thanks to automation and streamlined workflows. Faster price calculations and updates lead to shorter turnaround times for clients.
Reduced Training
Like any job, sales reps need to learn the rules and processes before pricing. Training takes a long time, especially if you rely on manual entry and hard copies. The right pricing software helps simplify and automate that training process.
Pricing Consistency
Did you know inconsistent pricing can affect customer trust? Implementing a pricing solution will help standardize your pricing strategy, reaffirm pricing-related rules and build customer trust for your business.
Key Features & Functionality
| Custom Pricing Rules | Manually getting approvals or inputting price exceptions can be extremely time-consuming. Custom pricing rules help avoid that hassle. Set clear pricing rules based on market conditions, your product, revenue goals, strategy and competitors. Create customizable templates for products, customers, sales channels and regions. |
|---|---|
| Competitor Analysis | Both under and overpricing relative to competitor prices come with their own problems. Benchmark prices based on market prices and analyze if or why competitor prices may be working better. |
| Pricing Optimization | The pièce de résistance of any pricing solution, pricing optimization relies on AI-powered recommendations and rules to determine the optimal price. Automate and adjust prices for products, currencies and markets on multiple platforms. |
| Integrations | No man is an island. The same goes for software. Integrate with CRM and ERP solutions to turn opportunities into quotes. Streamline the ordering process with eCommerce and CPQ integrations. |
| Strategy | While pricing software won’t magically provide you with your desired pricing strategy, it can help you plan for one. Forecast and analyze customer demands and sales margins and use AI-powered recommendations. |
| Approval Workflows | Clear workflows and procedures empower employees and simplify upper management’s responsibilities. Automate approval requests and send alerts when exceptions occur. |
Software Comparison Strategy
According to LinkedIn’s State of Sales Report, 77% of sales professionals say their organizations are planning to invest more in sales tech. But, pricing software isn’t one size fits all. Before settling on a solution, you’ll need to keep a few things in mind.
For starters, choose a platform that aligns with your industry. An example could be whether you need quick price changes across multiple channels or more exception management for complex products.
Next, you may want to check out the tools your competition uses to determine if they’re a good fit or if you could get a bit of an advantage by choosing another platform.
Finally, understanding the difference between CPQ and pricing software is fundamental. If your business is better suited to complex products with customer-specific requirements, you may want to consider CPQ software. However, pricing software is a good bet if you mainly deal with price lists.
Cost & Pricing Considerations
We’ve stressed the importance of price to profit margins, so it’s only fair to answer the question: What pricing considerations need to happen before spending on a solution?
First, you’ll need to figure out what your implementation costs will be. These costs will depend on how complex your workflows are, the analysis required and the integrations you need.
You’ll also need to consider subscription cost. You’ll want to know how or if the following items impact the subscription:
- Solution Package Chosen
- Cloud Infrastructure
- Price Optimization
- Ongoing Solution Maintenance
- Training
- Technical Support
- Additional Features
The Most Popular Pricing Software
Now that you know what pricing software is and how it can help your business, it’s time to discover some popular solutions. Remember, each business — and its pricing needs — is different. These platforms should help set you on the right path!
Note: These are well-known CPQ solutions overall, rather than software specifically for pricing.
Conga CPQ
A cloud-based platform, Conga CPQ increases sales using AI and acting as a guided sales coach. Its integrated TurboEngines and advanced pricing streamline data processing and speed up sales. Other features include centralized data, quote management, complex configurations and varied sales models.
Conga CPQ Proposal Generation.
Salesforce CPQ
Salesforce CPQ is a staple of any “best of” CPQ list. Cloud-based and AI-powered, it uses options and availability to simplify quote creation. Multiple third-party integrations aid in implementation and accessibility. Automated renewal quotes and invoices, a sophisticated pricing engine and price analytics are its other standout capabilities.
Salesforce CPQ Dashboard.
Oracle CPQ
Oracle CPQ’s cloud-based platform empowers users to generate comprehensive proposals, contracts and custom-branded documents. Built-in intelligence, guided pathways, workflow management and end-to-end integrations optimize sales cycles.
Oracle CPQ Pricing Rules.
Questions To Ask
The importance of asking questions can’t be understated, especially when selecting software! Getting lost amid targeted ads, jargon and boisterous claims can be easy, but clarity about your business's specific needs is a must. Look inward and ask yourself what you need before you look outward.
Here are a few internal questions to keep in mind:
- What are our business requirements?
- What’s our budget?
- Have our competitors invested in pricing software?
- What features are crucial and which we can skip?
- How will the software add value to our existing operations?
- Will this software meet our future needs?
- Does this software integrate with current systems?
- Do we need external assistance from the software company to fulfill our pricing needs?
Once you understand your requirements, it’s easier to investigate how well software vendors can deliver. Assumptions are the root of many misunderstandings. You don’t want to be caught flat-footed during the moment of truth, so get clear answers to the following questions:
- Do they offer migration or implementation support?
- Which solutions does the platform integrate with?
- What’s included in the basic plan?
- Are there any hidden costs or add-ons?
- What kind of training and support is offered?
In Conclusion
Like picking the perfect show to binge-watch, choosing the right pricing software can be tricky. The end goal is to stop leaky margins from eating into your profit. The right pricing software can help you do just that.
To find the best system, you’ll first need to be clear about what a pricing solution can offer and the value it can bring to your business. However, that’s easier said than done! We hope this guide has provided a clear path to help you select a pricing platform that fits your criteria.
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