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Role of Pricing Software in B2B Pricing Strategies

A B2B or Business – to – Business model involves selling products and services to other businesses instead of end customers. One of the biggest mistakes that B2B businesses make is using the same pricing … Read More

A B2B or Business – to – Business model involves selling products and services to other businesses instead of end customers. One of the biggest mistakes that B2B businesses make is using the same pricing strategies as B2C businesses. The major difference between a B2B transaction and a B2C transaction is the customer. While B2C products are usually targeted towards an individual for final consumption, B2B businesses sell their products and services to a business to help them solve their specific business needs. A business buying decision is usually taken by a group of decision-makers after strict scrutiny. Research suggests that at least 60% of purchase decisions made by B2B buyers are dominated by the price of the product. Thus, making a smart B2B pricing software essential for every modern business. The typical B2B pricing strategies and how B2B each strategy
  1. Tiered Pricing
In the simplest sense, tiered pricing is an approach that encourages businesses to segment the pricing of their products or services to suit their various target markets. Tiered pricing works by decreasing the price per unit once a certain quantity within a “tier” has been sold. Customers are usually segmented by determining price fences. The price fence comes in the guise of volume, amount of expenditure, or the span of the business-client relationship. Role of Pricing Software Companies are leveraging sophisticated rebate software to incentivize customers. Rebates are deferred discounts that are offered to the customer after the purchase is made. They usually come with a condition. Rebate programs are used in tiered pricing models to encourage the customer to buy more to get higher rebates.
  1. Dynamic Pricing
In the Dynamic pricing model, the price of a product or service does not remain fixed over time. Instead, the price is dynamic and changes frequently to suit the evolving real-life situations and the factors affecting the price such as raw material, labor, and likes. Dynamic pricing ensures that the seller receives relatively consistent profits and has a better opportunity to maximize profits. It also reduces the risk of warehouse stockpiling by adjusting the price of the product according to market demands. Role of Pricing Software It is practically impossible to keep a track of the rapid and dramatic changes in the market manually. And, assessing and calculating the optimum price accurately is a whole different ball game. It is only with the prowess of artificial intelligence that businesses can get real-time data to make quick adjustments to the price of their commodities.
  1. Competitive Pricing
Two main challenges pose in the way of businesses when it comes to competitive pricing –
  • Finding a true competitor from the millions of competitors that populate the market.
  • Maintain accuracy of evaluation.
The smart pricing software solves both these issues with predictive modeling and artificial intelligence. It analyzes customer and market data to find repetitive patterns. Then, makes accurate predictions based on the data. Price is calculated efficiently and accurately with the power of artificial intelligence, thereby, eliminating detrimental human error. Conclusion At Vistaar, smart pricing solutions come in the guise of rebate management software, price structure management software, and advanced CPQ solutions. Each of these offerings is designed keeping a B2B business structure in mind to boost their sale and drive higher ROI.
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