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Quick Start for Agreement Management, which allows companies to deploy Zilliant Deal Manager™ in as few as four weeks, helps sales reps actively set and manage customer price agreements. But sales reps aren’t the only internal group to benefit from proactive agreement management. Quick Start for Agreement Management also enables better agreement tracking and management for pricing teams, which helps stop margin leakage and, ultimately, leads to improved profitability.
Why Do Mismanaged Price Agreements Lead to Significant Margin Loss?
Our previous blog went in-depth on how the Zilliant Quick Start package for Agreement Management empowers sales reps by streamlining the creation, management, and renewal of customer price agreements. But when viewing agreement management from a pricing team perspective, halting significant margin loss over time due to the mismanagement of agreements is a significant challenge.
Why do mismanaged price agreements lead to margin leakage? First, sales reps set up agreements without guidance and rely on intuition or gut feeling, often using a net price with no end date creating a “set it and forget it” conundrum. Second, pricing teams also often lack visibility into the margin health of all pricing agreements, which is necessary for understanding where margin loss is occurring and knowing which agreement lines need to be updated when corporate pricing strategy changes. Finally, given that customer price agreements are typically locked away in ERP systems, spreadsheets, or even email, a company’s ability to react to volatility and update pricing is far too slow.
The fact is that pricing teams need to ensure relevant prices are tightly aligned with how sales reps manage customer price agreements. Pricing teams need a proactive and scalable way to understand the profitability of agreements and quickly and accurately communicate and execute price changes with sales teams – especially in times of inflation and volatility.