subscribe to zilliant

Dynamic pricing is a well-known term. Yet, if you were to ask 10 pricing experts to define it, you could very well get 10 different answers! A dynamic pricing engine is important for executive and pricing leaders seeking to break free from the limitations of pricing in manual tools.

In this post, we'll cover B2B dynamic pricing and dynamic pricing engines from all angles.

What is a Dynamic Pricing Engine in B2B?

dynamic price optimization

To understand dynamic pricing engines and their business impact, consider these questions:

  • How quickly can you respond to new pricing triggers such as cost changes or competitive price changes in the market?
  • Can you update prices in real-time across channels without arduous manual effort?
  • Can your current pricing tools support a responsive pricing strategy?
  • Do your eCommerce prices honor existing customer relationships?
  • Can you serve up the right price that wins new business without sacrificing margin?
  • Are your prices good enough to sell new items to customers, without talking to a sales rep or needing to negotiate?

Depending on unique business criteria, these capabilities should be present in any solution coined as “dynamic.” Market-leading dynamic pricing engines can address all of the above questions and are critical to keep up with customer expectations.

A dynamic pricing engine is responsible for ensuring your prices are relevant to market and channel conditions at any given point in time. When prices can be updated in real-time to match market conditions, you've changed the game.

While the definition is simple, achieving it isn't as straightforward. Traditional spreadsheets and disparate data sources make it nearly impossible. The reason? The information grows stale before the data can be analyzed, let alone acted upon.

Speed and flexibility have never been more important in the world of B2B and those values extend to the pricing function. Relevant, real-time pricing guidance delivered to every sales channel gives companies a leg up on competitors. Meanwhile, internal complexities demand an accurate, fast and automated response in order to achieve your pricing strategy.

Dynamic pricing software combines key elements of price optimization and price management to deliver relevant prices to all sales channels.

Read More - Dynamic Formula Pricing in Specialty Chemicals Manufacturingand What are the Best B2B eCommerce Pricing Strategies

How Does Real-Time Pricing Improve Customer Experience?

real-time pricing engine

B2B enterprises are working hard to improve their digital experiences, and some areas are more valuable investments than others. One of the highest drivers of customer satisfaction and superior consumer experience is personalized, transparent and highly relevant pricing, delivered instantly.

B2B customers simply expect a B2C-like experience from business suppliers, especially after 2020's drastic shift to virtual everything. Modern B2B buyers want to shop for industrial hoses, construction materials and configured products like they shop for groceries on Amazon.

The pricing implications of this shift are immense. B2B pricing is complex, but customers expect prices to be fair, accurate, and personalized. Even for large quotes, they expect prices to reflect market conditions in a way that is tailored to them.

Traditional approaches to setting prices can make it worse when something happens that requires a price change. Dynamic pricing marries business strategy with technology to better serve customers. Dynamic pricing is a vision for pricing that exists on a spectrum. That spectrum contains several stages that will apply to different businesses at different times. We'll explore these different stages through real use cases. First, let's take a deeper dive into the components of a dynamic pricing strategy.

Zilliant Price Manager Overview

Learn More - Real-Time Market Pricing for eCommerce Distribution | Real-Time Market Pricing for Salesforce B2B Commerce

What is a Dynamic Pricing Strategy?

Learn how to implement dynamic pricing as part of a stronger commercial strategy.


Digital commerce creates more data in a business and a faster rate of change. As the world becomes more digitized there are more data points to incorporate into pricing, sales and commercial decisions. Examples are quotes you did not win, IoT data, and eCommerce data like pageviews and cart abandonment metrics.

At the exact same time, market conditions and business dynamics are changing at an increasingly fast pace. This leaves companies scrambling to respond to pricing triggers, like cost changes, tariffs, competitive pricing, inventory status, and inflation. Once predictable and manageable, pricing triggers are happening much more frequently and haphazardly.

Read more: How to Counteract Inflationary Pressure

For instance, competitor prices are much easier to access today due to increased price transparency. Maybe you never want to be five percent higher or lower in price than your competitor. That strategy is hard to execute without the ability to use data in real time to dynamically change pricing.

While those outside of the pricing function may assume changing prices is a simple endeavor, the reality is much more complex. The process involves a number of stakeholders in an organization. Below is a rendering of the pricing process we commonly observe within B2B companies:

dynamic pricing strategy

This chaotic spiderweb makes it hard to respond to a market trigger when time is of the essence. Dynamic pricing moves you from trigger to transaction faster and smarter.

Price Determination

Pricing triggers impact how companies price their products and services, so price updates need to happen across all pricing modes. The price modes can include list, matrix, eCommerce, spot/negotiation and customer specific pricing. Price moves need to be relevant to customer relationships as well as the company's bottom line and pricing strategy. Traditional manual pricing methods often fail to support this.

For instance, a Zilliant metals distribution customer has all its material costs driven by the London Metal Exchange. The company replaced spreadsheets with a much faster, more agile way of understanding how those costs changes flow into product cost for its dynamic pricing strategy.

Continue reading "What is a Dynamic Pricing Engine?"