How Price Optimization Can Save B2B Sales

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The importance of structured pricing is often overlooked, but that is exactly why price optimization has become a point of interest for AI and market trend research. During Covid, many businesses found maintaining previous sales orders and establishing a stronger presence than the competition complex. Most distributors and manufacturers have never had to engage in much marketing or promotion, as leads lasted longer and operations were consistent.

A Marketo study found that most B2B companies won’t reach out to sales reps until 50%-70% of the buying process is complete . This is crucial, because if your reps aren’t a significant part of the early decision process, what factors will be considered first?

Think about what we reported earlier while talking about B2B eCommerce Statistics in our last blog. One of the main points that was emphasized when discussing the importance of a B2B Portal presence, was the need to improve customer experience and personalization when purchasing.

One of the most direct and significant ways to develop both at once is through price management. Businesses are just as cautious and uncertain as consumers now when it comes to spending. Because of this, we must assume that price optimization is one of the top concerns in customer experience.

Enable published a study with 4 main statistics:

83% of businesses reported supply chain disruptions due to Covid (and 30% of that number reported a severe effect or no sales)
64% encountered challenges with their current deal management process.
56% expect to renegotiate their agreements.
47% saw their income decrease between 10-80%.
You may also like: What's New: Advanced Pricing Rules

What is price management?
Before we look at “optimization,” it’s important to understand what the number is that we’re managing. Price management boils down to using up-to-date information about market trends to make decisions about how to best adjust prices to fairly meet supply and demand.

The final number shouldn't be something you think of hastily because it sounds appealing, as it's still very possible to lose money or alienate buyers if your pricing isn't measured correctly. A good pricing strategy will be beneficial to both you and your customer, without compromising the best interests of either party.

Possible pricing errors
Inside Big Data Benchmark Report We found that companies experience anywhere from 0.5% to 17.1% in margin losses simply due to pricing errors. These errors include:

Misaligned Market Pricing – When companies aim for “competitive pricing,” it typically means that prices will correlate with market trends. Failing to adapt to a changing market means giving away products that are sold at lower prices or scaring away buyers with overly aggressive rates.
Inconsistent pricing – Ensuring your pricing is consistent across all outlets and retailers is vital, especially if you use omnichannel distribution. Aside from the internal disorganization this causes, it damages your professionalism, your relationships with customers, and breaks trust in future purchases.
Inefficient pricing practices – Some retailers have not yet defined a clear and compelling method for setting prices in their categories. This shows a lack of pricing strategies and does not result in a stable supply of inventory.
This is why access to granular data can be vital for making pricing decisions. By viewing sales at a granular level, we can help you understand which product categories need to be moved up or down. At inSitu Sales we offer 4 main methods you can use with our price optimization feature.

Customized price lists
As we've discussed before, personalization is a huge factor in brand loyalty and customer experience, and it allows you to create longer-lasting buyers. Use your customer's purchase history to form multiple personalized price lists .

Custom pricing levels
Set up as many tiers with custom discounts as needed, then have managers or field reps assign them to the appropriate customers. Personalization through pricing tiers provides incentives and a program that will motivate shoppers to stay with your company for future returns.

Volume-based incentives
Naturally, you'll always want to sell as much of your product as possible, and buyers would like to be able to reliably buy as much as they need at a time. To achieve this, we need to look beyond per-product discounts and build a new offering around units as a group.

Volume-based incentives in our pricing management tool allow you to offer the company an additional bonus (either free units or a percentage discount) for a higher volume of units purchased, similar to a volume discount.

If your buyers are hesitant to spend or tired of increasing supply costs, this is a great way to rekindle interest in increased sales. The added benefit for your company includes simpler logistics and more money for your production at once.

Profit margin
Profit Marking ensures that your prices will be adjusted according to what you need to ensure an exact percentage of gross sales revenue. Simply enter a percentage you would like to achieve, either overall, by category, or by product, and prices will automatically adjust to reflect this.

Price margin 1
With changing prices and market trends, many businesses are surprised at how much they can afford to lower prices without generating profit. For businesses that don't actively review purchasing data, this could be a potential discount right in front of them that they're missing out on.

It may not be as flashy or promotional as the other two, but it ensures that you are charging the best rates possible while making your designated profit. This feature is useful for teams that don’t want to manually edit their pricing tiers and prefer to have automation.

B2B eCommerce Price Optimization Pricing Tool