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Guest Author: Jose Leonel Tovar In today's competitive business landscape, companies face increasing pressure on margins due to rising costs and market competition. A structured Revenue Growth Management (RGM) approach can be a game-changer in tackling these challenges effectively. This article explores a real-world application of RGM in Central America Company, demonstrating how a strategic approach can unlock quick wins for margin recovery. The Challenge: Margin Decline in a Competitive Market   A poultry company in Panama was facing a downward trend in margins. The root cause? Rising raw material costs that were not fully passed on to pricing due to aggressive market competition. As a result, volumes began to decline, and profit margins suffered. This situation demanded an urgent and structured approach to pricing and margin optimization. The Solution: Implementing a Practical RGM Approach To address this challenge, a dedicated team conducted a deep-dive diagnostic on pricing and margin performance. The goal was to identify actionable quick wins while laying the groundwork for long-term RGM strategies. The approach included: RGM Maturity Assessment  – Evaluating existing revenue management practices and benchmarking against best-in-class capabilities. Stakeholder Engagement  – Conducting interviews to identify gaps and opportunities. Market Analysis  – Observing trade execution and price positioning in competitive environments. Portfolio Optimization  – Analyzing product performance to identify “Margin Killers” and “Stars.” Quick Wins Execution  – Implementing immediate actions such as price adjustments, SKU rationalization, and promotional optimization. The Outcome: Lessons Learned and Best Practices   While specific financial results cannot be disclosed, the applied RGM strategy led to measurable improvements in pricing structure and overall profitability. Key takeaways from this case include: A Data-Driven Approach is Essential  – Comprehensive margin diagnostics uncover hidden opportunities for quick wins. Agility in Execution Matters  – Swift implementation and continuous monitoring ensure sustained benefits. Cross-Functional Collaboration is Critical  – Success in RGM requires close alignment between commercial, finance, and operational teams. RGM is a Continuous Journey  – Beyond quick wins, embedding RGM capabilities is necessary for long-term success. About the Author Jose is an economist with 15 years of experience working at multinational companies developing and executing capabilities to achieve profitability growth through pricing, business intelligence and commercial strategy.

Guest Author: Jeff Lickfelt In today’s fast-paced business environment, industries with dynamic pricing face a common challenge: maintaining precision and stability amid constant fluctuations. Pricing professionals in protein processing, manufacturing, retail, and other sectors must navigate unpredictable input costs, supply chain disruptions, and shifting market conditions. The principles guiding pricing in the protein industry—where fresh beef and other proteins experience rapid cost variations—apply to any industry balancing cost realities with competitive pressures. "Control the controllables" is more than a mantra at our company; it is a guiding principle that helps us navigate the volatility in fresh beef and protein production. The Critical Role of Standard Costing Pricing in protein processing is dynamic. Market conditions shift rapidly, with input costs like feed, labor, and transportation frequently changing. This volatility makes it essential to understand production costs clearly and accurately. Standard costing forms the foundation of our pricing strategy, providing a benchmark to measure actual performance. However, standard costing alone is insufficient. Its true power lies in being measured against actual costs. Without capturing real-time production expenses, standard costs are merely theoretical. Comparing expected costs with real costs allows us to make informed pricing decisions that reflect our actual financial landscape. Collaboration: The Key to Accurate Costing and Pricing Achieving precision in pricing requires seamless collaboration between production, cost management, and pricing teams. Each department ensures pricing is a well-informed strategy grounded in real-world data. The production team executes operations efficiently, maintains quality, and ensures data collection does not disrupt product flow. The cost team tracks and identifies variations from standard costs, providing insights for pricing decisions. The pricing team bridges the gap between production realities and market expectations, ensuring prices reflect the company’s financial needs and competitive positioning. Without strong interdepartmental communication, misalignments can lead to ineffective pricing strategies. Pricing professionals must foster transparency and mutual accountability, ensuring all teams work toward producing high-quality protein products at optimal costs. The Cost-Plus Model: A Strategic Approach Our pricing strategy follows a cost-plus model, adding a margin to known production costs to maintain profitability while responding to cost fluctuations. Its success depends on accurate cost inputs. Inaccurate or incomplete data makes pricing decisions unreliable. Overestimating costs may lead to lost sales, while underestimating costs can erode margins. Capturing precise cost data is crucial. We continually evaluate where and how cost data is collected within the production process, identifying optimal points for data capture to minimize disruptions and maximize accuracy. This requires discipline and coordination from the production team to ensure efficiency. By balancing these factors, we develop a competitive and sustainable pricing strategy. Conclusion: Driving Growth Through Precision and Partnership Controlling the controllables is not just a strategy—it is a fundamental requirement for any pricing professional operating in a volatile industry. By prioritizing accurate cost tracking, fostering strong interdepartmental relationships, and refining our cost-plus approach, we create a pricing framework that is both resilient and adaptable. About the Author Jeff Lickfelt has dedicated nearly 30 years to Tyson Fresh Meats (formerly IBP), including 25 years in the Case Ready business. He has held various roles, from plant controller to director of pricing, shaping processes that grew the business to nearly $4B in sales. Jeff is a musician and founding member of the band Mr. Hand, inducted into the Nebraska Music Hall of Fame , and earned his Accounting Degree from the University of South Dakota .

Guest Author: Stephanie Gay Pricing transformations tend to be difficult. Where do you begin? Do you start by looking at your organization, processes, strategy, or technology? Or do you tackle all the above in parallel? How do you drive your organization to be on board with the pricing transformation? Does Generative AI (GenAI) even matter in a pricing transformation? Many questions should be considered, as your journey unfolds. In recent years, organizations have witnessed significant financial losses and declines in customer experience due to failures in digital solutions, disjointed systems, and data inconsistencies. Efforts to tackle disruption through “piecemeal” technology implementations have proven inadequate. Many organizations struggle to deliver business impact due to factors such as an undefined future vision, a gap between strategy and execution, siloed solution decisions, decisions that often fail to account for the entire tech landscape, and misaligned resource skill sets on the program. The cost of inaction is also immense. Businesses may be susceptible to losing sales and their competitive edge to the peers investing in digital commercial transformation, accelerating their commercial efficiency, and boosting revenue. Companies often overlook important nuances, leading to unexpected outcomes and incremental efforts mid-program. In my upcoming breakout presentation, A Hitchhiker's perspective to shaping a “profit-able” pricing transformation, I will cover three major considerations for pricing transformations. First are the key drivers of value in these programs and how these really come to fruition—or not—in the broader capabilities of your organization. Second are the often-ignored efforts and essential technology, data, and integration design principles that should be understood before mobilizing these programs. Lastly, how do you organize your resources, including people and accelerators—such as GenAI—for successful time-to-value? About the Author Stephanie Gay is a senior manager at Deloitte Consulting LLP . She has more than 13 years of experience providing solutions to Fortune 500 companies and start-ups. She currently leads Deloitte’s efforts around developing and implementing sustainable pricing strategies and tactics for clients. Stephanie holds an MBA from the Wharton School, University of Pennsylvania , with a dual major in finance and strategic management, a master’s in management from the University of Maryland University College , and a Bachelor of Science in mathematics from Rensselaer Polytechnic Institute . Contact her at stgay@deloitte.com .

Guest Author: Louis Mueller When you're a B2B company with limited resources, the idea of creating a partner program might seem out of reach. Large enterprises often have the budget and the team to manage complex programs, so how can smaller companies with fewer resources compete? The truth is, a partner program can be just as effective for smaller businesses—it all comes down to how you build it. How A Partner Program Can Benefit Your Business First, let's highlight the benefits. A well-constructed partner program can help you: Expand Your Reach  By partnering with other businesses, you can tap into new networks and customer bases that you wouldn’t have access to otherwise. This is especially valuable when you're working with limited marketing resources, as it helps you increase visibility and brand recognition. Drive More Revenue  Partner programs often include incentives for your partners to sell or promote your product, creating a mutually beneficial relationship. As your partners succeed, you succeed—without needing to invest in an expensive sales force or extensive marketing campaigns. Boost Credibility  Partnerships often lend credibility to your business. By aligning yourself with trusted industry players, you benefit from their established reputation, making it easier to gain the trust of potential customers. Access Expertise  Partners can bring valuable expertise to the table. Whether it's technical knowledge, industry insights, or customer relationships, your partners can fill gaps in areas where you may lack resources. Building a Lean Partner Program In-House While the idea of using third-party services to set up your partner program can be appealing, you don’t need an external platform or consultant to get started. In fact, many businesses with limited resources can build and manage an effective partner program in-house. Here are a few key steps to consider as you develop your program: 1. Define Your Program's Objectives Before you start building your partner program, take some time to define what you want to achieve. Are you looking for more customers? Increased brand awareness? Better market penetration? Clear goals will help you focus your efforts and measure success as your program grows. 2. Start Small and Simple You don’t need to launch a massive partner program right away. Begin with a small group of trusted partners—perhaps clients, business associates, or industry peers—and work closely with them to ensure they have the tools and support they need. This allows you to test your approach and refine the details before scaling up. 3. Leverage Existing Relationships One of the easiest ways to start is by working with people you already know. Reach out to your current clients, suppliers, or colleagues in your industry who may be open to referring others or collaborating with you. They already understand your business, which makes them ideal candidates to help you grow. 4. Create Clear Guidelines and Expectations Set clear expectations for what you expect from your partners and what they can expect from you. This includes communication, incentives, and the process for tracking referrals or sales. Make sure these guidelines are simple and easy to follow, especially if you're working with a lean team. 5. Offer Tangible Incentives Even with limited resources, offering incentives can be a powerful motivator. This could be in the form of a commission for each sale or a reward for achieving certain milestones. Make sure the incentives align with your business goals and are appealing enough to encourage active participation from your partners. 6. Use Tools You Already Have Many businesses already have basic systems in place that can be repurposed for managing partner relationships. For example, your CRM (Customer Relationship Management) tool can be used to track leads, sales, and commissions. You don’t necessarily need specialized software to begin; you can make do with the tools you’re already using, such as spreadsheets, email communication, and basic tracking systems. 7. Focus on Nurturing Relationships A partner program isn’t just about setting up a system and forgetting about it. It’s about building long-term relationships. Keep in regular contact with your partners, offer support when needed, and make them feel valued. This will ensure they stay engaged and motivated to help grow your business. Scaling as You Grow As your partner program starts to show results, you’ll have a clearer idea of what’s working and where improvements can be made. Once you’re comfortable with the basics, you can begin to scale up. Add more partners, expand your program offerings, and refine your incentives. But remember, this can all be done at a manageable pace. You don’t need to invest in large-scale PRM (Partner Relationship Management) tools or outsource the work to expensive consultants. Instead, focus on building a program that fits your needs and budget, and allow it to grow organically over time. A Word On Partner Relationship Management Tools While third-party platforms and consultants can help speed up the process and make it easier to scale and administrate, they’re not the only route. For companies with limited resources, investing in these tools may not always be feasible right away. But don’t let that stop you! Start with the basics and consider outsourcing only when you’re ready to take your program to the next level. About the Author Louis Mueller is the Senior Manager of Global Strategic Pricing for Kennametal’s Infrastructure Segment , which operates across diverse end markets, including Construction, Mining, Aerospace, Defense, Ceramics, and General Engineering. In this role, Louis oversees pricing strategies for the segment’s $800M business, develops processes and guidelines across the organization, and advances the company’s pricing analytics capabilities. With prior experience in the Automotive, Electronics, and Manufacturing industries across Germany, Thailand, and Brazil, [Name] brings a global perspective to strategic pricing. He holds an MBA from Germany and is a Certified Pricing Professional (CPP).

Guest Author: Joanne Smith The Trump administration is rapidly changing policies – reversing the previous administration’s policies and adding new ones – with the increasing use of executive orders (EO’s). Many of these changes will impact costs and inflation, while others may impact market demand or even global supply chains. Companies that can quickly pivot their pricing strategies have the opportunity to improve their business health, while slower acting companies may face severe profit loss. Tariffs, tax policies, energy policies, (de)regulations, and spending cuts can affect costs and inflation. Along with foreign policy, they can elicit retaliatory responses from other countries. To quote my favorite economist Robert Fry, “ I can’t remember being this uncertain about the inflation outlook. President-elect Trump is offering us a mix of inflationary (tariffs, individual tax cuts) and dis-inflationary (deregulation, spending cuts) policies. Who knows what combination we’re going to end up with?”   To make matters worse, large uncertainty exists in the boldness of the policies, the timing and the duration. For example, how large will the tariffs be, when will they begin and how long will they be in place? Depending on your asset footprint, your supply chain and those of your competitors, policy changes may present a threat or an opportunity to improve your price, your volume and your profits. If you import your key ingredients, tariffs are a threat. However, if you are sourced locally, and your competitors import their products or their key ingredients, you may have an opportunity to both grow your share and improve your price. If global supply chains are disrupted (think 2021) will you be positioned to manage through it better than your competitors? While pricing decisions have the largest impact on profitability of any business lever, other functions must also be nimble. Their actions greatly impact your pricing power.  As an example, will you have high product or ingredient inventory ahead of tariffs to provide a time buffer to make changes in your prices? Does your procurement team have the ability to modify your sourcing plan to a local supply and if so, has a competitor already tied up this local supply? Do you have the capacity or inventory should a growth opportunity arise?   If you knew a hurricane was predicted to hit your town, would you prepare for the safety of yourself, your family and your assets? Of course. Likewise so should your business. It’s imperative that businesses prepare for multiple scenarios, monitor leading indicators then be ready to act with confidence and speed – negotiating from a position of strength.   There are specific pricing practices – relative to contracts, agreements, and quotes – that you should be taking now to ensure you have the flexibility to respond to new administration policies. Further, you need to be prepared for specific pricing strategies for managing things like tariffs.   To learn more, check out my workshop  ‘Pricing Implications and Strategies for Changing Administrations’ offered on-line through the Professional Pricing Society. About the Author Joanne Smith, President of Price to Profits Consulting , is the author of The Pricing and Profit Playbook , The Price Negotiation Playbook and Pricing in a Crisis . She is the former DuPont Corporate Head of Marketing and Pricing. With more than 20 years of global business, marketing and pricing expertise, she now works with global companies to help them develop world class pricing and profit strategies, transformations, improvements and pricing negotiation skills.

Author: Angie Jackson, CPP PPS Director of Marketing and Key Accounts So, if you’ve committed to earning your Certified Pricing Professional  designation, you’ve taken the six online and/or Workshop prerequisite courses, you’ll have a fundamental understanding of the values-based pricing both from a mathematical/scientific perspective and when there’s some art involved (we don’t get to price in a vacuum, for example). You’ve passed the quizzes. You’ve learned from experts that live and breathe this discipline every day, including success stories and some failures as wise words of caution. Now it’s time to prove you know your stuff when it comes to price setting and execution, including segmentation and promotions and the like. But how does one approach the CPP exam? Quick caveat: I am not a pricer by nature. I have a marketing and sales background, both leveraging pricing, if somewhat, indirectly. But I was committed to going through the CPP journey to demonstrate pricing mastery, understand personally what our member experience is, and because, well, if I can do it, any one can. Here’s what I did to wrangle this bad boy: 1. Study and take it quickly as you can I took the test 7 days from beginning to study (8 days total including the exam). The first entire day, I created a study guide (see no. 2) to set myself up for success and create a pricing playbook for myself to use forevermore. I front loaded all my regular work so I could focus and deep dive into the content. I did little else for those 8 days besides study and master the concepts in the study guide. I read my notes before closing my laptop on the 7th day, and then read them again before starting the test. ✨ Insider tip:  Don’t drag it out. Just do it. 2. Create a Word document to serve as your master study guide I spent my entire first day of studying pulling all the editorial content from the PDFs associated with each study module into a Word document, so it was searchable for the exam since the exam is open notes. As I went through the 11 (there are really 12) study modules via the videos and Dr. Tim Smith’s engaging and thorough commentary, I made notes of things he said for later reference, and I pulled in the charts and graphs via screenshots and labeled the graphs with typed words so I could find them later when searching the document. Literally, on the exam, if I had a question about ‘Economic Value to Customer’, for example, I searched the document so I could find every mention of it to give me confidence when answering the question. ✨ Insider tip:  I also created a one pager with all the formulas so I could keep that right next to me as I went. 3. Make an exam plan or use mine With the test being 4 hours long, 110 questions, and I needed an 83%, I thought through the timing and test execution so I could make sure I was on pace to complete the exam while marking questions I was unsure about to double check them, if I had time. Here was my plan: I can miss 18 questions 1 hour mark: 28 questions 2 hours mark: 56 3 hours mark: 84 ✨ Insider tip:  I’d guess the exam is about 65% math. That’s not a fact; that’s an estimation. And I had plenty of time. I completed the test in 2 hours and 45 minutes.   4. No need to do the study modules in order but ensure you have mastery of the quiz questions on each When it came to the study modules themselves, they are about 75 minutes long each. I did two per day, stopping to take notes as I went and make sure I have complete mastery of the questions at the end of the modules  (except for one, see below). If I didn’t get a question right, I went back to the section Tim suggested and re-watched it, so I could execute the question correctly.   I started them in order, but I knew the heavy quantitative sections were going to be more difficult for me, and therefore take more time. I decided to skip those—price segmentation and conjoint analysis to do those last. That was a key for me because: a. I didn’t get bogged down studying those and could keep my studying momentum going. b. I studied those two on the last day, so the math execution was fresh in my mind. It seemed to me there were disproportionately more questions on those two sections, but maybe that was just me because I found them the most time consuming. Also, the segmentation and conjoint questions build on themselves, so if you missed one conjoint question, for example, then you could miss them all. And we can only miss 18 questions. Also, the test is randomized so the easiest question probably won’t be first. You may be asked a conjoint question first that you have to perform a few more calculations to answer. ✨ Insider tip: Conjoint wasn’t difficult for me, but I hear it’s a little scary to some people. Don’t be scared. Just take the practice test, and you’ll be able to do it . Nothing, absolutely nothing, is on the exam that isn’t stated or taught in the study module. The test was easier than I expected because I was well prepared for the exam through the study modules.   5. Don’t over think the exam I’m an over-thinker, as I’m sure many of us are. Do not overthink the exam questions. The most obvious answer is probably the right one. If you know Tim, he’s not interested in tricking us. The test is multiple choice, and often two of the answers are obviously wrong. But you’ll often have to choose from two answers that, upon first glance, seem correct. If you made your complete study guide, search the document for everywhere he talked about that topic, and you’ll be able to determine which is the best choice. ✨ Insider tip:  I’d guess 75%+ of the exam are questions directly derived from the study module quizzes. Have I said make sure you can demonstrate mastery of the study modules?   PPS CPPs grow their businesses with evidence-based profitability strategies and techniques. It’s an honor to join this elite group of over 2,000 distinguished pricing professionals (and growing every day). If you have any questions around the CPP exam or any other aspects of PPS, don’t hesitate to reach out. Good luck and happy studying!

Author: Mike Gorham As pricing professionals, we have all heard the saying "price is the most important lever". Recent CIL analysis found that in the UK, price has 6.7x the impact of volume growth, with older, international studies have estimating it closer to 10x. Yet, many companies still take the most important decision in their business effectively blind. To give a couple of examples from the tech sector: · In 2023, 93% of managed service providers set pricing without supporting research or analysis. · In 2022, SaaS companies reported spending an average of just six hours to set their pricing. Addressing Pricing Optimisation Concerns Many businesses simply lack an effective framework for pricing. They under-value pricing research because they lack experience with it, and they fail to recognize the biased and incomplete nature of information gathered in sales conversations. This leads to rushed decisions taken with insufficient information. A Framework for Enhancing Data-driven Pricing Strategies A practical framework can help businesses refine their pricing approach, make data-driven decisions, and unlock hidden value for sustainable growth.   By following these steps, executives can build confidence in their pricing, take early action for maximum impact, leverage expert insights, and maintain control over pricing for sustained success. Build confidence in price positioning A successful pricing strategy begins with a thorough evaluation of pricing power and growth potential. By leveraging market data early on, businesses can gain the insights needed to ensure their pricing is competitive and well-aligned with market demand. This data-driven approach enables informed, confident decisions that maximise profitability and unlock greater value. Develop a Clear Understanding of Value Effective pricing starts with a solid understanding of what customers truly value. Conducting accurate, unbiased customer research is critical to capturing insights into customer perceptions, market positioning, and the unique value your product or service offers. This helps ensure that pricing reflects the true worth of your offerings and resonates with the market. This research ensures that pricing decisions are based on real data rather than assumptions, leading to more precise and effective pricing strategies. Leverage External Expertise Realising a company’s full pricing potential requires focused effort. Management teams, despite their talent and motivation, will often lack the dedicated resources and specialised skills needed for comprehensive pricing market research and commercial excellence initiatives. When internal resources are limited, partnering with external experts can fast-track the pricing strategy process. External specialists bring deep insights and experience, allowing businesses to refine their pricing models more effectively. This collaboration not only optimises pricing decisions but also helps build critical skills within the company, ensuring long-term capability in pricing management. Maintain Pricing Control for Sustained Success Effective pricing control hinges on robust data and well-defined processes. By investing in data platforms that provide insights into customer profitability and pricing performance, businesses can manage both new and existing accounts with greater accuracy. This level of control allows for more precise adjustments and helps ensure that pricing strategies remain adaptable as the market evolves. To achieve long-term success, your systems and processes must be designed to support scalable and repeatable pricing strategies, enabling sustained growth and profitability.   Mastering strategic pricing is essential for any business seeking long-term profitability and growth. By taking a data-driven approach and leveraging the right expertise, businesses can ensure their pricing strategies are both effective and sustainable. Through careful evaluation of pricing power, understanding customer value, and maintaining strong control over pricing systems, companies can unlock hidden value, improve margins, and stay competitive. The steps outlined above provide a clear, actionable framework for executives looking to make pricing a key driver of their success. Implementing these strategies will not only enhance profitability but also build a more resilient and adaptable business model for the future.   Mike Gorham, CIL’s Pricing Director, will lead a breakout session on “Sustainable profit growth: Comprehensive pricing model insights” at the PPS Europe conference in Berlin, November 19-22. His presentation will be Friday at 14:20. Mike Gorham leads the Pricing practice at CIL, an international strategy consultancy. He specialises in pricing, strategic marketing, and sales effectiveness. Mike combines strategic insights, data analytics, and practical sales experience to deliver holistic and sustainable pricing improvements for clients across various sectors and sizes. He holds a BSc from the London School of Economics and an MBA from INSEAD. [1]   Strategic Pricing: A methodical approach | CIL Management Consultants [2]   https://syncromsp.com/download-msp-pricing-models/ [3]   https://www.paddle.com/blog/frequency-pricing-change

Guest Author: Julia Brasher If your company’s revenue growth has hit a plateau, it might be time to take a fresh look at your quoting process. While pricing strategies often live within the walls of finance or sales teams, unlocking real growth requires a broader approach—one that involves voices from across your organization. The Hidden Power of Cross-Functional Collaboration In many companies, pricing is treated like a “black box.” Sales teams enter opportunities, finance crunches the numbers, and somewhere in between, quotes are generated. But this closed-loop approach can lead to missed opportunities. When other departments—such as marketing, product development, operations, and customer service—are invited into the pricing conversation, a whole new world of potential opens up. Each department offers unique insights: Marketing  can provide data on customer perceptions of value and competitive positioning. Product Development  can highlight cost structures and innovation roadmaps. Operations can identify efficiencies (or inefficiencies) that impact pricing decisions. Customer Service  can share real-world feedback that might adjust the perceived value of your offering. What Pricing Diplomacy Looks Like in Action Imagine a scenario where a sales team is negotiating a complex deal. Instead of pushing through with generic pricing guidelines, they involve finance to analyze profitability, operations to assess delivery costs, and marketing to ensure the offer aligns with brand promises. This collaborative approach not only strengthens the quote but also increases the chances of closing a deal that is both profitable and strategically sound. This approach isn’t without its challenges. It requires transparency, communication, and a willingness to break down silos. But when done right, it turns pricing into a strategic tool for growth rather than a reactive process. Turning the “Black Box” into a Growth Engine To move toward a more collaborative quoting process, start by: Opening Lines of Communication: Create regular touchpoints between departments to discuss pricing strategies and challenges. Setting Clear Objectives: Align teams around shared goals, such as revenue targets or profitability metrics. Encouraging Transparency:  Share the “why” behind pricing decisions to build trust and buy-in across teams. The rewards of this approach can be transformative. When pricing becomes a shared responsibility, you’ll see stronger alignment across teams, a clearer understanding of value, and more opportunities to drive revenue growth. About the Author With 20 years of experience in strategic revenue management, Julia specializes in driving profitability and implementing innovative pricing solutions. Currently, as Director of Pricing at Highline Warren , Julia partners with the commercial team via an efficient deal desk system to facilitate $30+ million in weekly opportunities. Known for cross-functional collaboration, Julia excels at identifying process improvements to drive strategic growth. She holds an MBA from the University of Alabama at Birmingham.

Guest Author: Tom Gorin In today's fast-paced digital world, customer interactions are the lifeblood of any successful business. At PROS , we have embraced the power of artificial intelligence (AI) to revolutionize how we engage with our customers, from the initial sales pitch to deployment and renewal. This transformation has not only streamlined our processes but also significantly improved customer satisfaction and retention, leading to increased revenues for our company. The Power of AI in Streamlining Customer Interactions As a software provider, we faced numerous challenges in managing customer interactions across various stages of the customer lifecycle. Deploying SaaS software can be messy, with complexities arising at every turn. However, by leveraging AI, we have been able to break down these barriers and create a seamless experience for our customers. One of the key areas where AI has made a significant impact is in speeding up deployments. Traditional technology companies often struggle with perceptions of over-promising and under-delivering. AI has helped us overcome these challenges by enabling faster and more efficient deployments, thereby strengthening our relationships with customers and enhancing retention rates. Example 1: Automating RFP Responses One of the standout examples of how we have leveraged AI is in automating responses to Requests for Proposals (RFPs). By using data and generative AI, we have been able to search vast knowledge bases to generate optimal RFP responses. This has resulted in a 50% reduction in turnaround times for RFPs, allowing us to respond to customer inquiries more quickly and accurately. The initial version of this AI-driven solution is live and has been widely adopted, showcasing the efficiency gains and improved user experience. Example 2: Enhancing Test Case Generation Generative AI has also revolutionized our approach to test case generation. By leveraging AI, we can quickly generate a subset of test cases for our customers, significantly enhancing efficiency and saving up to 20 days per project. The process is elegantly simple: users share a screenshot with a Generative AI tool of their choosing, and the AI builds on this image to propose a set of test cases. These can then be refined through prompt engineering, resulting in a highly usable set of test cases. This streamlined approach not only saves valuable time but can also be implemented swiftly with existing Generative AI tools. Learnings from Our AI Journey Our journey with AI has taught us several valuable lessons. First and foremost, clean and accurate data is the foundation for any successful AI project. Regular data preprocessing and prioritizing data quality over quantity are essential steps to ensure reliable outcomes. Additionally, planning for change management and adoption is crucial. Engaging leaders as champions, overcommunicating through various channels, and converting influential naysayers into cheerleaders can drive higher adoption rates. Showcasing results and metrics is another key factor in driving adoption. By focusing on metrics that drive and measure department and company performance, and by continuously tracking and reporting on these metrics, we have been able to demonstrate the tangible benefits of our AI initiatives. Inspiring the Future   At PROS , we believe that the future of customer interactions lies in the intelligent use of AI. Our journey so far has been marked by innovation, learning, and success. By continuing to leverage AI, we are confident that we can further enhance customer satisfaction, retention, and ultimately, our company's growth.   About the Author Joanne Smith, President of Price to Profits Consulting , is the author of The Pricing and Profit Playbook , The Price Negotiation Playbook and Pricing in a Crisis . She is the former DuPont Corporate Head of Marketing and Pricing. With more than 20 years of global business, marketing and pricing expertise, she now works with global companies to help them develop world class pricing and profit strategies, transformations, improvements and pricing negotiation skills.

Guest Author: Tom Gorin In the rapidly evolving landscape of business-to-business (B2B) commerce, the integration of artificial intelligence (AI) is emerging as a game-changer. AI is revolutionizing various facets of business operations, and one significant area of its impact is on pricing strategies. This blog post explores the profound effects of AI on B2B pricing and why it is crucial to understand these changes in today's context. The Case for Price Drops and Stable Margins In the January 8, 2025 AI Chat podcast episode ( Preparing for AI Agents with John Munsell ), host Jaeden Schafer interviews John Munsell of Bizzuka, Inc and LSU. They discuss John Munsell’s experience with AI solutions and share a list of very compelling tools and use cases. In addition, Munsell shares his perspective on how AI will impact the workforce, which also affects the pricing of goods and services. Specifically, Munsell’s argument is that as AI develops, first movers will greatly benefit from it, reducing their costs and growing their margins. However, as AI becomes more widespread and the competitive landscape equalizes, these margins may eventually return to their original values, albeit at lower prices. AI adoption will increase competition and create a downward push on prices, eventually leading to a stabilization of margins at levels comparable to pre-AI levels. In their view, the overall impact becomes an initial increase in margins followed by sharp price declines, stabilizing margins, and a drop in workforce (replaced by AI). However.... An alternative: Improved Margins While the potential for price drops is significant, there is also a compelling argument that AI can lead to improved margins for B2B businesses. This view hinges on the idea that AI can enhance pricing strategies by providing deeper insights and enabling more precise pricing decisions. In fact, this is one of the key differentiators that we offer at PROS. Our AI solutions enable our customers to optimize every selling and pricing decision, by leveraging vast amounts of data and identifying patterns and trends that were previously inaccessible, leading to proven revenue and margin improvements of 1-3%. Take Wilbur-Ellis for example, which faced challenges with manual, time-consuming pricing processes that led to outdated prices and inefficiencies in a market with razor thin margin. By implementing PROS Gen IV AI, they achieved real-time pricing for over 6,000 SKUs, resulting in a 2% margin uplift and enhanced pricing precision. Read the full case study here . AI's analytical capabilities allow businesses to personalize and tailor pricing strategies for each unique customer. Rather than leveraging segmentation, businesses can implement personalized offers and pricing strategies that maximize revenue and profitability. Furthermore, AI can help businesses identify and address margin leakage. By analyzing historical sales data and identifying patterns, AI can pinpoint areas where margins are being eroded, such as through excessive discounting or inefficient pricing practices. Beyond margin and revenue, a study by Forbes has also shown that the integration of AI into pricing models can lead to a 20% increase in customer lifecycle value. These improvements are achieved by refining customer and product segmentation (we can discuss the use cases and validity of segmentation in a future blog post), enhancing data quality, and leveraging both quantitative and qualitative insights to make informed pricing decisions that impact far beyond the initial negotiation period. Where will we end up? A middle ground? The impact of AI on B2B pricing is not a zero-sum game. While AI can drive prices down through competition and cost savings, it can also enhance margins through improved pricing strategies. The key for businesses is to strike a balance between these two outcomes. McKinsey  finds 5-15% revenue potential and 20-40% time saving potential from the adoption of Generative AI solutions in distribution. To achieve this balance, businesses must adopt a holistic approach to AI-driven pricing. This involves not only leveraging AI to optimize costs and stay competitive but also using AI to gain deeper insights into customer behavior and market dynamics. By doing so, businesses can implement pricing strategies that drive both competitiveness and profitability. As AI continues to evolve, businesses that embrace its capabilities and strike the right balance will be well-positioned to thrive in the competitive B2B landscape. As this BCG report  suggests, there is a long road of opportunity ahead as it relates to AI investments and value. About the Author Tom Gorin is the Vice President of AI Strategy & Adoption at PROS . With a PhD from MIT and extensive experience in profit optimization and revenue management, Tom brings a wealth of knowledge to the field of pricing and airline economics. Tom also has over 20 years of experience in managing and leading teams of professionals, and over 10 years of experience in the software industry focusing on big data analytics, sales effectiveness, and pricing and revenue management optimization.

In this "throwback" post, initially shared in the Professional Pricing Society's Pricing Journal, we learn how important the rules of inflation are in pricing and the successful strategy that sustained over time. High inflation is one of the main concerns in emerging economies. The conventional pricing approach is not suitable for inflationary environments given the distortion in the traditional business incentives. Under these environments a new framework should be developed in order to assess the new priorities of the pricing policy. This new approach -called the “Inflation’s 3 C” - highlights the key issues that pricing should address, i.e.: Cost, Collections and Communication . This article develops the key issues that integrate this new framework. Challenges of Pricing in Emerging Economies: Coping with High Inflation High inflation is still one of the main concerns in emerging economies. Annual rates in the neighborhood of 10% -and even more for some specific markets- have characterized the pricing situation of many emerging economies for years. This scenario represents high uncertainty for companies doing business at emerging countries. Prices and their evolution become the centre of the business worries –in many cases- at the expense of losing the focus in the business strategy. This situation entails a particular challenge for the pricing profession. Understanding the new price dynamics becomes a critical issue for the companies’ survival. A new pricing approach together with financial management tools should be implemented in order to cope with this difficult environment. New Approach The conventional pricing approach –valid for low inflation economies- requires some adjustments in order to reflect the new challenges of high inflation environments. While the “4 C” framework is a trusted and important tool to identify the key drivers of pricing in conventional scenarios, i.e.: Cost, Customers, Competitors and Channel, it needs to be redefined when high inflation turns out to be a main concern. During inflationary times companies try to protect their profits and cash flow transferring the inflationary impact to third parties. These parties are customers, suppliers, and employees. Customers will be affected through selling price adjustments. In the case of suppliers, the company will try to delay the impact of cost increases and extend payment terms as much as possible. Finally in the case of employees, they will be affected if salaries lag behind the inflation rate evolution, reducing their real purchasing power. Under this environment a new framework should be developed in order to better assess the new priorities of the pricing policy. This new approach -called the “Inflation’s 3 C”- highlights the new set of the key issues that pricing should address i.e.: Cost, Collections and Communication (see figure 1). This new framework reflects the change in the priorities for the company and the new way of doing business given the distortion of traditional incentives. For example, while during in normal times increasing sales is one of the top priorities of the company, in inflationary times holding large inventories while being very selective in closing sales could be a more profitable strategy. Financial gains (working capital appreciation) can be far more rewarding than classic operational profits under the new set of incentives. Figure 1: “Inflation’s 3 C” Key Drivers: “Inflation’s 3 C” Cost In inflationary environments the company has to keep up with constant cost increases that should be passed through to prices in order to avoid losing profitability and cash flow. Information about costs and its forecasted evolution is vital for the planning and scheduling of the pass-through strategy. Fluid communication between the pricing professional and key internal departments as Finance & Administration, Purchasing and Human Resources is pivotal under inflationary situations. These departments will be the source of valuable information to make quick decisions under the new price dynamics. In the case of the Finance & Administration department its contribution is vital to model the forecasted path of the different cost items. This information will allow to make simulations of the forecasted impact in the overall cost structure. The cost simulation model outputs will be a critical raw material for the pricing practitioner to plan the magnitude and timing of the price adjustments. Fluid communication with the Purchasing department (raw material and services) is also very important as this area is the one that has first hand information from suppliers. Many valuable “off-the-record” inputs about cost evolution –that should be adequately weighted by the pricing professional- can be available even before the detailed cost simulations. This department will source the Finance & Administration department with the necessary information to feed the simulation model. Another critical input from the Purchasing department is the reliability of the raw material deliveries as –mainly in very high inflation contexts- suppliers may constrain or delay the deliveries in order to take advantage of future more favorable pricing conditions. If supply constrains are foreseen the companies pricing situation should be ready to reflect this. Human Resources is another key department for cost evolution information. This department will be able to forecast the labor cost evolution which could impact both internally (i.e. labor costs of the company) and externally (i.e. labor costs of the suppliers). In the latter case this will let the company anticipate a next round of cost increases once the suppliers recalculate their costs. In most cases labor costs usually lag behind in the adjustment path of inflationary environments. As a consequence of this lag it is probable that even when raw material inflation starts to decrease, labor cost evolution accelerates in order to catch up with the accumulated inflation rate. The information sourced by Human Resources department will also feed the cost simulation model. Regarding the methodology to implement the price adjustments the company should always base its pricing on the analysis of the future costs -not of the historical ones- associated with making a sale. The relevant cost is the future cost of replacing the inventory when sales are made. Otherwise, there will be a risk of losing working capital as the revenues generated will not be enough to replace the inventories at the new higher costs. For example, considering a book seller that is informed that from next month the wholesale price of his books will suffer a 10% increase. If he keeps the retail price unchanged as the new wholesale price has not affected his purchases yet, he will be reducing its financial capacity to replace his inventory as he will be paying a higher price in the next purchase. In this case he will be forced to borrow money or retain a larger portion of the earnings in order to keep the same level of inventory. To avoid this, he should adjust his retail price as soon as he notices about the increase, in order to reflect the future cost of replacing his inventory. When high inflation is a persistent phenomenon an automatic price adjustment clause can be an interesting idea to explore. Suppliers and customers could agree on a criterion or index that could serve as a trigger to automatically implement price adjustments. This criterion or index should be as simple and transparent as possible in order to avoid any conflict during its implementation. This system could be very useful to reduce the impact of a constant price negotiation under a persistent inflation situation. Collections Payment terms are usually reduced during inflationary situations mainly for three reasons: to decrease the exposure of the accounts receivables, to protect the company from the higher risk of past due problems and to avoid charging the customers with the higher cost of financing sales given the higher cost of capital. Accounts receivables have the same problem that inventories –especially if the company has long payment terms- as there is a risk that the revenues to be collected do not reflect the real “cash” cost of the sale. Unless the prices invoiced already include the cost of capital on the agreed payment term, there is a permanent risk that revenues collected will never be enough to reflect the replacement cost of the goods sold. Past due problems are very common as some customers are likely to show speculative behaviors trying to delay payments in order to liquidate the burden of accounts receivables exposed to the inflationary erosion. The cost of financing sales also rises as the cost of capital increases to reflect the expected inflation. The payment term reduction should be usually complemented with stronger incentives in order to increase the opportunity cost for the customers of delaying the payments. A price waterfall analysis could help to break out the entire discounts framework from the invoice price to the pocket price in order to find some opportunities to improve the collections performance. For example, moving some discounts from commercial purposes (e.g. promotional discounts) to financial purposes (e.g. pay in advance discount or payment in term discount). Focusing the price waterfall items to improving the payment performance can be very helpful under inflationary situations. Communication The communication strategy is crucial for the price recovery actions success. The communication should not only be directed to customers but also to other stakeholders, as competitors or the government, depending on the particular situation of each market. Customers should be convinced that the price adjustment is inevitable and equitable for the entire customer base. The price adjustment should be perceived by customers as critical in order to maintain a reliable product supply. Relating the increase to widely known “high-level” cost increases can help to gain credibility and reduce the opposition. Nevertheless -if possible- the company should try to avoid giving too much information to customers about detailed cost increases in order to maintain enough price flexibility. It’s advisable to give only the strictly necessary details about the cost drivers of the price increases. However, in some concentrated markets with few strong customers there’s no other alternative than open book pricing. In that case the company should prepare a detailed spreadsheet communicating the cost impact in each part of the cost structure. Far from desirable, this can be the only way to get a price increase in markets where the demand is very concentrated in a few customers. Competitors should also receive the message about the price adjustment. Even then, the means and scope should be carefully analyzed in order to avoid behaviors that can be considered illegal in certain markets. The communication -that can be done through an industry council or a press release- should help to spread the idea that is in the best interest of all the players to implement soon a price adjustment in order to maintain the long-term profitability and continue competing at the same price level that before the price increase. In the case of the government –especially in markets closely screened by governments because of any political or social reason- the message should be directed to communicate the general cost foundations of the price increase. This communication could also help to refocus the interest of the government control from the suppliers of the market to the supplier’s suppliers. Opportunity For many companies –mainly at emerging countries- the price adjustments driven by inflationary environments can be an excellent opportunity to reformulate its pricing policy. Given the uncertainty that surrounds the inflationary situations, all the stakeholders are more wiling to accept price reformulations than in stable situations. This helps to reduce the normal resistance than entails a price adjustment. Following the developed framework the company can turn a problem -as surging inflation- into a real pricing opportunity. About The Author: Ariel Baños is an economist with vast experience in pricing at emerging economies. He has developed his expertise at a leading American company operating in the automotive business at emerging countries. Ariel is the founder of Fijaciondeprecios.com the first organization specialized in pricing for Spanish speaking countries. Contact: ariel_banos@fijaciondeprecios.com References Nagle, T. and Holden, R. (2002), “The Strategy and Tactics of Pricing”. Third Edition. Prentice Hall Marketing Series. Strategic Pricing Group, Inc. (2003). “Dealing with Cost Increases: A Matter of Survival”. SPG Bulletin. Sanguineti, E. and Lazzati S. (2002). “Gerenciar con inflación”. Revista Mercado.

Author: Rajeeb Chowdhury The global e-Commerce logistics market is expected to reach USD 1.9 trillion by 2030 and reflecting a CAGR growth of 23.5% during the period 2021 – 2030. (source: www.alliedmarketresearch.com ). The wide spread surge of B2C e-Commerce websites and platforms has significantly boosted the demand for domestic and cross-border e-commerce logistics globally. We have witnessed similar pace in the growth of number of e-commerce logistics players both locally within countries and across various regions globally. Interestingly, we have also observed gradually growth in the number of leading global and regional e-retailers who are entering the logistics space and offering integrated solutions which includes both on-line shopping and last mile delivery. This sector is going through fast paced transformation driven by continuously evolving customer needs and enormous possibilities with the adoption of various technological solutions. The logistics companies and e-retailers are also faced with enormous challenge – on one hand to offer very competitive prices for the delivery of their goods to the end-consumers and on the other hand continue to invest in devicing innovative processes and solutions to stay afloat in the market. Profitability challenges facing most companies: During this cut-throat competitive journey, a number of companies have also gone bankrupt and perished as they lacked the competitive edge in successfully pursuing the most appropriate strategies for realizing profitable growth. While achieving ‘economies of scale’ has been the dominant philosophy across most market segments, a number of companies under-estimated the importance of other key values drivers which are equally significant in driving profit realization. It is imperative that business leaders in this sector pursue a more holistic approach in translating customer value proposition into optimal profit realization. This requires a careful assessment of key value drivers, but more importantly successfully implementing some of the simple but effective business principles within an organization and in relationship to the target customers and suppliers. Workshop objective: This workshop will provide an holistic cross-functional view on how B2C logistics companies and e-retailers could optimize growth and profitability in the context of the ongoing market trends and innovation. The workshop participants will have the opportunity to analyse and learn some of the proven industry best practices pursued by leading B2C logistics players. The 3 key strategic levers for profitable growth in B2C industry growth will be evaluated based on a few examples of best practices currently being implemented by leading companies. The 3 key levers covered during this workshop are: 1. volume growth 2. cost optimization and 3. price levers. Introduction to the speaker – Rajeeb Chowdhury Rajeeb is a dynamic and results-driven leader, currently serving as the Chief Strategy & Transformation Officer at AJEX, a leading Middle East specialist in B2C and last mile solutions. With over 30 years of experience across diverse industries, Rajeeb has a proven track record of driving growth and profitability through strategic innovation and business transformation. Rajeeb’s expertise spans business turnaround, change management, strategy design, and process re-engineering. Previously, he has worked with DHL Express for 20 years on various senior management roles and also as a price professional as Global Head of Strategic Pricing and Regional VP of Pricing & Yield – Asia Pacific and Emerging Markets.