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Pricing of products or services historically has been mysterious and subjective by executive decision-makers. After all, the best price tag a seller can put on something is whatever a buyer will spend on it. Can’t get too much more uncertain than that.
Zilliant, which specializes in AI-based end-to-end pricing and sales-guidance software, is taking this nebulous aspect of sales and making it science for those decision-makers. The Austin, Texas-based company today introduced Next-Generation Price IQ, what it calls “the next giant leap” for its business-to-business (B2B) price-optimization product.
Price IQ ostensibly brings advances in performance, claiming a 10-times improvement in AI-based optimization speeds, the company said. Businesses thus can respond faster to rapidly changing business dynamics and market movements while providing price transparency to sales teams, the company said.
“If sales reps don’t understand how prices are generated, they are unlikely to use them,” Zilliant president and CEO Greg Peters said in a media advisory. “Next-Generation Price IQ provides a way to keep prices competitive amid near-constant change while also providing a pragmatic means to leverage AI with a crystal-clear view into how prices were derived.”
Inflation now a major factor in setting pricing levels
After several years of rock-bottom interest rates in the financial markets, inflation now has become a business reality. This has been exacerbated by supply chain turmoil, increased competition and dramatic swings in both demand and inventory availability. As a result, B2B companies need a faster, more powerful approach to pricing that maintains market alignment while generating prices that are easily explainable and defensible, Peters said.
Conventional B2B pricing apps make it hard to understand how pricing was derived by moving proprietary metrics out of sight and out of reach for users, or they generate pricing using strict rules that don’t hold up as complexity increases, Peters said. These methods also fail to address volatile and competitive B2B markets, he said.
What Zilliant does that stands alone
Zilliant Price IQ has the capability to measure price elasticity in B2B, making it easy for customers to set profit- or revenue-maximizing strategy goals, or anywhere in between, according to senior vice president of products and science Pete Eppele. For example, he said, the AI engine inside can blend the two factors to maximize price for profitable growth.
Price IQ also uses a constraint-based optimization solver, which means it can enforce rational price relationships, Eppele told VentureBeat. For example, this would include good, better or best product price relationships or minimum margin requirements across different product and customer segments. Pricing teams also can create side-by-side pricing scenarios and conduct “what-if” simulations to visualize the predicted margin and volume impact of various pricing strategies before publishing, select the best to publish and save and re-run as desired, Eppele said.
Eppele told VentureBeat that the platform enables pricing teams to do the following:
- Smultaneously visualize the predicted margin, revenue and volume impacts for various “what-if” scenarios before publishing optimized prices.
- Vew precisely how the optimization engine produced each price, drill into each optimized price, view the associated transactions with inline analytics, make adjustments and see how price changes will impact revenue and profit; and
- Immediately publish prices into CRM, CPQ, ERP, eCommerce or any other commercial system.
From a technical standpoint, Eppele said, the following product innovations are key features of the new version of Price IQ:
- It provides customers a unified interface, providing a centralized location to access multiple optimization models, as well as Price Manager, Zilliant’s price management solution.
- Within the unified interface, Price IQ users can investigate all price optimization parameters and formulas and even export to CSV if needed, giving a crystal-clear view into how pricing was derived.
- Supports multiple price optimization models and scenario templates, enabling customers to optimize pricing for multiple lines of business in one centralized location.
Who else competes in this market
Zilliant’s top competitors are PROS Inc, Pricefx and Vendavo. However, while other solutions simply recommend price increases, Eppele said, the Zilliant solution identifies a combination of price increases and price decreases based on price elasticity and AI that accurately predicts how customers and markets will respond to price changes.
Users have reported a 10 times ROI in less than a year using Zilliant, Peters said. Next-Generation Price IQ can be up and running in 90 days and lowers overall cost by supporting multiple pricing models and scenario templates, enabling simultaneous optimization of multiple lines of business within the same instance, the company said.
Here is IDC’s 2021 assessment of this market.
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