Pricing Can Dramatically Affect Profit Increase

by | Aug 17, 2013 | Uncategorized

When engaged in B2B sales, an overlooked but critical tool for profit increase is pricing. Like any tool, if not used skillfully it can also embody a fair amount of risk. Unfortunately, the fear of risk causes many companies to avoid using this powerful mechanism for profitability when it could, often quite dramatically, result not in disaster but a significant profit increase.

The risk can be calculable in either direction, but many companies would prefer leaving potential profit on the table over failing to retain a customer, who will inevitably provide competitors an inroad into your marketplace and undermine sales strategies, leading to possibly future losses as well.

Hitting the right mark can be difficult enough, but knowing when you are not charging enough and creating a profit increase is even more challenging. If you leave pricing too low, you lose money. If you set it too high, you could lose customers. Customer retention balanced with optimal pricing should not be left to intuition or guesswork. If there was a way to know exactly how each customer would respond to price, risk would be eliminated and you could get the best possible price and improve margin growth all at once. But is this even possible?

Technologically innovative software makes it possible to take the guesswork out of pricing in order to truly optimize strategies and increase profit. Using powerful interfaces that model real-world applications based upon the actual data in your market, pricing experts can test and evaluate pricing scenarios that will show exactly how customers will respond, allowing B2B companies to try out pricing scenarios in real-time before committing to a pricing change. This allows businesses to set prices in such a way as to maximize profits while reducing and minimizing risk.

The best software for your investment will not only model possible strategies and predict P&L results, but will also work with whatever existing tools you have without requiring a major internet technology upgrade. It will also work with established practices for pricing, whether your company negotiates price bands, or uses matrix or list prices. Built-in with available software on the market are other applications which provide users with relevant analysis in order to fully apprehend pricing recommendations.

Modeling response based on real-time calculations is an invaluable tool for optimizing pricing that can lead to a profit increase across the board for any B2B sales company. Not every software company provides the same quality, but those that have been supplying solutions for several years are usually the more reliable brands.

The Zilliant ( platform uses advanced science in its price optimization and sales effectiveness applications to drive measurable financial results for B2B companies. MarginMax generates a profit increase on the order of 1-3% return on sales, delivers a payback in less than one year, and can be up and running in as little as 90 days. No other solution provides the benefits and returns delivered by MarginMax. Zilliant is located at 3815 S. Capital of Texas Highway, Suite 300, Austin, TX 78704 Phone: +1 512-531-8500 | Europe: +44 7769 294323

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