How the Right Pricing Software Drives Profit Growth

Explore the basics of pricing software and discover how your company can utilize it to improve your bottom line.

How important is pricing software when we’re talking about driving profitability for your organization? What role should it play in your profit puzzle? Let’s examine how your company can effectively employ these tools in conjunction with other pricing strategies to enhance your overall profitability.

What is Pricing Software?

Pricing software is used by successful businesses across countless industries to monitor, optimize, and execute pricing strategies and pricing decisions more efficiently and effectively. According to MarketWatch, the price optimization and pricing management software market size is projected to reach multimillion USD by 2029, In comparison to 2022, at an unexpected CAGR during 2022-2029. Yet, there remains a sense of mystery regarding which products and services are most effective for driving profitable growth and optimizing a company’s revenue plans. Why? Although the technology can be incredibly powerful, software itself is just one piece of the puzzle when it comes to growing profits.

What are the Different Types of Pricing Software?

Price Management Software

Price management software continuously collates and sets updated pricing information in one central location to help teams streamline the price setting and management process. With the right price management software in place, companies—especially those in dynamic markets—can ensure their pricing is accurate at all times.

Price Optimization Software

Price optimization software can quickly analyze dynamic price inputs like cost, customer-perceived value, currency exchange rates, and price elasticity to deliver real-time pricing that maximizes your competitive edge and profitability.

CPQ Software

CPQ (configure, price, quote) software is a sales optimization tool that allows sales representatives to quickly create accurate quotes for products and services. CPQ software is designed to consider multiple rules and variables like quantities, discounts, and customizations to ensure the most accurate, error-free quoting.

Price Execution Software

Sometimes considered a type of price management software, price execution software supports mass price changes by centrally aggregating and facilitating the approval of expected changes in price or margin by factors such as customer, salesperson, or region. A successful price execution software will enable your team to view, adjust, and approve price changes, as well as track progress and results.

Pricing Analytics Software

Pricing analytics software provides visualized reporting for your pricing goals and objectives. While often utilized in conjunction with other pricing software, pricing analytics allow you to understand performance and leverage data to inform and enhance decision-making.

What are the Benefits of Pricing Software?

As technology evolves and markets demand an agile approach to pricing, companies are forgoing clunky, manual price management systems for more efficient pricing software solutions. New technology has made it possible for businesses to achieve the flexibility and speed necessary to stay competitive in a rapidly changing market.

Whether a company wants to increase the speed of their quote generation or reduce approval times, there is a solution that can help. Benefits of pricing software include:

Price Management Software

  • Increase speed of price execution
  • All data is stored and easily accessed in one central location
  • Connect pricing and sales teams to manage and maintain sales conditions and discounts
  • Reduce time used on pricing administration tasks
  • Easier for sales
  • Identify underperforming products, customers, quotes, etc.
  • Manage and control your pricing across all sales channels and relevant markets
  • Collect real-time data to inform future decisions

Client Example:
A furniture retailer was competing with dynamic, fast-moving competitor price points on ecommerce platforms while experiencing margin erosion. INSIGHT’s price management application helped them quickly and seamlessly deliver updated price recommendations across channels and regions through biweekly price list updates based on factors such as financial results, competitiveness, and elasticity.

Price Optimization Software

  • Provide dynamic pricing recommendations
  • Leverage real-time market information
  • Custom pricing strategies for specific customer groups
  • Simulate the impact of pricing decisions such as price changes
  • Link customer value drivers to pricing decision-making based on willingness-to-pay
  • Set the price for new products that are being introduced or changes to current SKUs

Client Example:
A metals manufacturer and distributor was experiencing volatile raw material costs, requiring them to generate price changes and quotes very quickly to maintain margin goals. INSIGHT’s price optimization technology leveraged a dynamic pricing model that developed and delivered price targets based on real-time cost data, customer data, and other market factors at play. As a result, the business increased their margin and revenue due to real-time optimized pricing.

CPQ Software

  • Faster quote generation
  • Shorter approval time
  • Increased quoting capacity
  • Customizable
  • Industry agnostic
  • Integration capabilities with other internal systems

Client Example:
A food distributor had a long, manual quoting process that left customers waiting up to weeks for a quote response. Additionally, quotes were not optimized based on margin targets. INSIGHT’s quoting application enabled them to provide an accurate quote in under 1 minute through systems integration, automated workflows, and a pricing model that generated optimized price recommendations.

Price Execution Software

  • Increased speed of price change execution
  • Centralized pricing and sales team communications and expectations
  • Shorter approval time
  • Drill-down abilities
  • Sales buy-in for customer price changes
  • Centralized data to better understand impact

Client Example:
A legal services firm was conducting regular standard rate increases, however many customers were still receiving unearned discounts leading to rates that were misaligned to market pricing. INSIGHT’s price execution software was utilized during quarterly price change reviews, allowing both the pricing and sales teams to centrally align and approve adjustments prior to customer communications, decreasing price exceptions and deviations.

Pricing Analytics Software

  • A single source of truth
  • Drill-down abilities
  • Lessens manual work
  • Shortens data collection process
  • Informs smarter and quicker pricing decisions
  • More frequent views of goal results and impact

Client Example:
An equipment distributor with 40+ individual divisions and processes had experienced rapid growth through acquisitions. Multiple systems and measurement tools led to lack of goal clarity and centralized visibility. INSIGHT’s pricing analytics enabled them to visualize consolidated data via robust reporting dashboards that could be sliced and diced based on desired views and analysis.

Why Pricing Software is Just Part of the Equation

Although pricing software can significantly improve a company’s pricing strategy and price management process, one all too common mistake is thinking software alone can grow profits. 

In actuality, it’s just one piece of the puzzle.

In order to optimize for profitability, a business needs the right combination of software and pricing expertise to thrive in a competitive marketplace. There are several considerations to keep in mind when evaluating pricing software and the type of technology services partner that is best for your business:

  • How soon do you expect to start realizing financial benefit from your pricing software investment?
  • How will your provider support data clean-up, centralization, and validation?
  • How much control will you have over your pricing solution set-up to ensure it fits your business, not vice-versa?
  • How will your software provider capture and incorporate new data ongoing?
  • What will your pricing software provider do to ensure profit realization of ongoing price changes?
  • How will your provider enhance the current price model and processes?
  • What support will be given to adapt to changing markets, including awareness of and suggestions for changes to your pricing strategy and tactics?
  • How will your solutions provider approach training stakeholders? How will they engage stakeholders beyond initial training?
  • How will the measurement of software usage and price adoption be leveraged to improve the financial impact?
  • What root-cause analysis will your provider give to support internal reviews, board meetings, or other key stakeholder meetings?

Beyond solution approaches, consider first where your company sits on the pricing maturity spectrum: do you have the expertise and experience to develop and execute an end-to-end pricing strategy?

A pricing software solution suite implemented for a non-dedicated or inexperienced pricing team is unlikely to create success stand-alone. It needs to enable an effective strategy aligned with your profitability goals.

The INSIGHT Advantage

Technology isn’t just a hobby for INSIGHT—it’s core to how we’ve developed and delivered impact for clients over 15 years. Some of our technology platform capabilities and benefits include:

  • Data Engineering: Dedicated data engineering team to ensure your data is continuously consolidated, cleansed, and enhanced so you can focus on growth and impact
  • Analytics: Turn your core data assets into robust analytics views—templated or ad-hoc—that quickly and clearly identify opportunities for sustainable profitability, no matter where you are in your pricing journey
  • Dynamic Models: Dedicated data science team turns your pricing strategy to life through dynamic pricing models that evolve with you and your market
  • Integrations: Tailored API integrations to any backend system or CRM to make sure the right price is delivered to your systems while reducing your IT workload and minimizing implementation timelines
  • Applications: Accelerate impact through pricing software applications that are developed and designed to tailor-fit the needs of your unique business through a services-based approach in a matter of weeks, not quarters
  • Tailor-Fit Solutions: Technology solutions tailored to your specific needs that are measured and iterated upon over time to ensure impact
  • Change Management: Create and deploy tailored change management strategies to promote the adoption of your pricing strategy, software, and supporting processes

At INSIGHT, we pride ourselves on being pricing experts. Our pricing specialists are uniquely positioned to offer comprehensive solutions for sustainable profit improvement. Our clients benefit from not just tailored pricing software, but from our unrivaled knowledge of profit strategies, our change management programs, and our continuous improvement solutions. At INSIGHT, we don’t leave once the technology is in place. We continue to work with your team on process improvements, technology enhancements, and training to achieve ongoing profit impact for the long-term.

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