Learn all about B2B pricing software in our comprehensive explainer, including a breakdown of pricing analytics, price management, price optimization, deal management, and price execution functionality.

What is Pricing Software? 

Pricing Software in B2BOriginating in the travel and hospitality industries as revenue management software, pricing software has been developed to serve industries ranging from retail to B2B to financial services and telecommunications. B2B pricing software got its start in the late 1990s, helping B2B manufacturing, distribution and industrial services companies analyze, manage, optimize and execute prices. The sophistication of the algorithms, ability to process large amounts of data quickly, and the delivery of pricing software has changed drastically, but many of the core B2B pricing challenges still exist, and have only been exacerbated by the pace of business and technological challenge. In this post, we’ll explain pricing software in the context of B2B, including the types of pricing software, who can benefit from it, the typical realized benefits, and tips for selecting the right pricing software vendor for your business.

What Are the Four Types of Pricing Software?

The four types of pricing software include pricing analytics, price management, price optimization, and price execution software. Here's a breakdown of each type:

Pricing Analytics: This is most often used in conjunction with price management or price optimization software to help businesses understand their current pricing performance and where they may have opportunities to improve. A primary example is margin driver analysis, which isolates the factors that drive margins, lights up the trends and makes actionable recommendations. Often presented as a waterfall chart, the output gives companies a holistic view of changes over any user-defined time period and explains exactly how much of the margin change is due to price, volume, cost and mix. Take a look at a more detailed example in our Margin Driver Analysis blog post.

Price Management: Pricing teams most frequently use this type of software to set prices for new products, update existing price lists or matrix prices and mass update customer-specific prices. A common example is the need to update global price lists and cascade those prices changes to multiple country price lists. View an example demonstration in this Global and Country Price List webinar.

Price Optimization: Price optimization software utilizes artificial intelligence to measure price elasticity and predict the outcomes of various pricing strategies to generate revenue- or profit-maximizing prices. Read our in-depth explanation of price optimization.

Price Execution: How prices are ultimately calculated and delivered directly to the end customer or a sales rep for the purpose of creating or updating a quote or agreement, or entering an order. A powerful pricing engine that uses a high-availability API can perform complex price calculations and deliver prices in real-time in any sales rep- or customer-facing application, such as an ERP system, CPQ tool, CRM or eCommerce site. View an example demonstration in this price guidance webinar. Another common price execution use case is deal or agreement management software, whereby sales reps actively manage customer-specific prices, contracts and agreements.

Read More: What is Deal Management? and What is Dynamic Pricing?

How is Pricing Software Used for the Most Common B2B Price Modes?

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