On May 20, Salesforce Senior Director of Product Management Erwan Kerebel, presented at MindShare 2021. In his session, Kerebel discussed the trends and changes that have significantly impacted the way companies need to approach pricing and quoting.
One major change is the seismic shift from product-centricity to customer-centricity. Business differentiation is now defined by customer interaction rather than their product offerings, and the focus is now on improving the customer experience, maximizing lifetime customer value, and ensuring customer engagement is ongoing.
“As a result of this shift, we see channel partners, customers, employees, and customer-facing functions expecting much more from the companies that they interact with,” said Kerebel. “They expect personalization, responsiveness, 24-7 engagement, and current up-to-date content.”
However, at this level of engagement, many companies are hindered by complex, disjointed, and siloed legacy solutions. Examples include custom spreadsheets for product line quoting purposes, and companies buying point solutions for addressing specific needs like commerce or billing. These approaches increase difficulty for customer facing functions to provide the expected interaction experience.
To solve this problem, use a system of engagement to provide customer-facing functions the necessary data for enhanced interactions and increased collaboration.
“A system of engagement is going to transform the customer experience, allow companies to adapt new revenue models such as a recurring or subscription model, and leverage data, AI, and machine-learning in order to optimize revenue operations,” said Kerebel.
Transform the Buying Experience
Diversity in product portfolios, customer profiles, and buying use cases will lead to various buying experiences. In some cases, the buying journey might be very low touch and highly automated, which frees up expensive sales resources to refocus efforts on higher value deals. Sometimes a very high touch buying journey is required due to customer preference, complexity of the product, or the negotiation or renegotiation process for a contract. However, regardless if the buying journey is low or high touch, a consistent layer of engagement is necessary.
“Even when there are manual steps or processes in the buying journey, people in charge of those steps need to have the right information, there needs to be consistent pricing, and errors, friction, and frustration need to be minimized,” said Kerebel.
Launch New Revenue Streams
Increasingly, customers are demanding the ability to consume offerings in a flexible, scalable, and secure manner. When it comes to accelerating to a subscription model, B2B companies need to be leveraging SaaS capabilities to increase predictability in their revenue and recreate a connection with their customers.
“Now with a software as a service, companies can get very valuable insights about how their customers are using their products,” said Kerebel. “This helps companies better understand and better serve their customers.”
The move to a subscription or recurring revenue model requires the rethinking of many approaches. From a buying perspective, there will be increased touchpoints during the customer lifecycle. Customers might want to speak to a rep before committing to a fee or contract, or customers might want to use a trial for a few weeks before converting to a paid subscription.
“It’s important to allow touchless experiences as much as possible,” said Kerebel. “But for those cases where we need manual touches in some steps of the journey, allow easy switching between one channel and the other.”
Optimize Revenue Efficiency
For a subscription model, companies need to reexamine their customer experience from acquisition to renewal. Every step and every action in the subscription model customer lifecycle must be connected to offer the best customer experience.
When moving to a pure subscription model, companies should rethink packaging and bundling products. This helps define product offerings for targeting specific customer segments. For example, a less flexible but simple “all-you-can-eat” model offers your entire product catalogue, while a more flexible but complex “price bundling” model allows customers to narrow in on products they really need.
Additionally, there are two different entry points into subscriptions. A pure subscription model, utilized by Netflix and Microsoft 365, is all-inclusive, has a fixed price, and has no limits on consumption. On the other side of the spectrum, a pure usage model offers a variable price based on usage. For example, Google ads only invoice for the ads shown during the previous month.
“The other thing companies that are transitioning to a recurring revenue model need to look at is how they structure pricing,” said Kerebel. “We might think about a subscription model as a very basic monthly price, but there are several nuances to subscription models.”
Deliver Flawless Pricing at Every Step
Salesforce’s Revenue Cloud solution allows B2B businesses to take control of revenue growth across every channel. It transforms the buying experience by allowing customers to switch seamlessly between all channels, accelerates new revenue streams by increasing business agility when it comes to subscription pricing, improves revenue efficiency by creating scalable processes and leveraging automation, and offers a complete view of customer transaction data from all channels.
Zilliant’s partnership with Salesforce Revenue Cloud allows B2B companies to define their product catalogue in Revenue Cloud and prices in Salesforce using advanced capabilities from Zilliant’s price optimization and management solutions. As quoting or ordering happens in Revenue Cloud, Zilliant can augment quoting by providing pricing guidance. Therefore, customer segmentation and buying behavior analysis can be used to optimize pricing recommendations during quoting in Revenue Cloud. Additionally, when it comes to accumulating transaction data, Zilliant solutions help analyze the data and the outcome of the pricing strategy that was put in place, and this intelligence can be fed back into the algorithm to improve pricing guidance.
“We believe that the combined Revenue Cloud and Zilliant solution allows customers in all industries to deliver the right pricing and quoting for every transaction, for every customer, and for every sales channel,” said Kerebel.