How Price Management is the Bridge Between Sales and Pricing Teams

March 20, 2019 Team Zilliant

With every advancement in technology comes hesitation from employees who dread change or fear being replaced by machines. The smart ones, however, propel themselves by successfully using that tech to their advantage. 

Price management tools and B2B e-commerce solutions aren’t taking jobs and commissions away from sales reps. Conversely, reps who harness these tools put themselves in a position to capture higher margins, keep their customers more satisfied and reduce their own administrative burden. 

These reps are also incredibly good at making friends with their pricing teams. The natural tension between pricing and sales dates back to the Silk Road, probably. Sales teams are incentivized to bring in more revenue and volume, while pricing groups are compensated on increasing margin. Outside of changing sales reps’ compensation model to a profit-driven one, which few companies are willing to do, there is seemingly nothing that will heal this divide.

Enter Zilliant Price Manager, our data-driven and highly customizable price management tool built to resolve this fundamental issue by helping both teams hit their targets. We created this solution after years in the trenches with customers, learning from their struggles to grow overall sales volume without sacrificing margin.

Let’s look at 4 common pain points – 2 from the point of view of each group - that drive a wedge between sales and pricing teams, and how effective price management can act as an anti-inflammatory.

1. Sales POV - Lack of Trust

Sales reps often believe that each customer is unique and thus deserving of special pricing. Rather than using list or matrix pricing provided to them, reps tend to want to negotiate customer specific agreements. This creates a headache for pricing teams, who’d rather have a streamlined pricing matrix than a smorgasbord of agreements to track and manage. 

What it comes down to is sales teams not trusting the numbers they are getting from pricing. This gives them less confidence when presenting numbers to their customer, which inevitably drives the final price (and margin) down.

Price management technology is critical to rebuilding this trust. It unlocks your customer data as well as many other market and internal factors to identify accurate pricing on a per-item, per-customer basis. A new transparency then develops between pricing and sales that allows each side to visualize what a change in a line item does to the overall profitability of a deal.

With Zilliant Price Manager, reps can now see the logic behind pricing constraints, and become armed with all the justification they need when explaining price points to customers during negotiations.

2. Sales POV - Turnaround Time

When a deal is getting down to the wire, timing can be everything. Many distribution sales reps currently deal with a lead time of weeks (in some cases a month!) to receive updated pricing. This creates more friction and leads to reps creating their own price, which could spell disaster in the long run.

Reps simply don’t have time for the back-and-forth with pricing on numbers they figure they’re just going to discount anyway. They crave accuracy and speed. Price Manager scratches that itch.

The tool allows pricing teams to accurately and quickly render unique pricing, in a transparent fashion that sales reps can easily access and build a quote from. There’s no need for sales to do the dirty work of poring through disparate spreadsheets or emails to find pricing that may or may not be outdated. Instead, they can focus most of their time on customer needs and prospecting activities.

3. Pricing POV - Imbalance of Control

With a lack of data organization, sales reps out of necessity take their destiny into their own hands when it comes to pricing. Some reps may prefer total control, but this type of rogue strategy often leads to pricing inconsistency and thus a lot of back-and-forth (and eventually, customer churn). It’s also time-consuming work that is just begging to be automated with more data-driven tools. 

Pricing teams are mandated to protect and grow the company’s margins. So it’s extremely frustrating when they see sales reps discounting prices with no regard to what it’s doing to the bottom line. 

With a data-driven tool like Price Manager, pricing can bring that seesaw of control back to equilibrium without having to constantly harp on the sales team about customer agreements. Instead, data makes the decision clear, justifiable and profitable.

4. Pricing POV - Dwindling Margins

The push-and-pull between sales and pricing exacerbates the margin problem that distributors already face in a competitive market. With potentially hundreds of deals being made per day, each containing hundreds of line items, the potential for margin leakage is omnipresent. 

Price management isn’t just about delivering the best price for end customers - it’s equally (if not more so) about creating sustainable margins across all aspects of your business. The KPIs available in Price Manager clearly display on a per-line item basis the amount of wiggle room available for sales to discount without sacrificing margin targets. 

Suddenly there’s an opportunity for dialogue and mutual empathy. Data-backed pricing decisions grow margins over time while Price Manager’s efficiency and transparency builds that bridge of trust. It’s a win-win for both sides.

The Bottom Line

The key to bringing together sales and pricing in a harmonious union is to give them the tools to hit their respective goals in unison. We’ve discussed here how Zilliant Price Manager can be that bridge to trust, efficiency, partnership and, not least, top- and bottom-line growth.

With proper training around how prices are calculated, as well as centralized access of customer data, sales reps can take advantage of reliable pricing and justifiable contract terms. Rather than spending time on backend, manual pricing strategies for each individual client, reps can concentrate on managing existing and potential relationships. Pricing teams gain back essential control over the sale price with data-backed decisions. 

The result is a true partnership, meaning each side is benefitting equally from the relationship. Pricing teams realize sustained margin growth and have fewer customer-specific agreements to manage. Reps are able to quickly and confidently deliver deals to their customers without any extra administrative work.

Pricing and sales – together at last!

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