Pricing Complexities & Custom Quoting Processes

Disruption in Manufacturing

31 May 2018

Custom quoting processes have created extraordinary amounts of overhead within the B2B world. As more manufacturers move toward a digitally-supported, self-directed buying cycle these manual, complex pricing models simply won’t work. Special quotes and contract pricing aren’t as manageable in an online scenario. For many products, particularly those that are less complex, the market is demanding transparent pricing.  Trends toward direct-to-customer sales models are accelerating the need to change traditional pricing and quotation models altogether.

Improving the “process” of pricing can drive down costs and increase efficiency, creating more profit for the organisation. Some companies even have entire teams devoted to pricing and quoting contracts, and for the most part, this practice has got to go.

Technology is driving change

The pricing disruptor has so many forces driving it that it’s hard to decide where to start. Reduction of overhead, the self-directed buying cycle, and the expectations of customers for a certain “experience” are all making overly burdensome B2B pricing and quoting mechanisms obsolete. Technology, however, is one of the main factors behind this rapid change. There is an enormous need to tear down the complex, custom quoting processes that have been the hallmark of manufacturing and distribution for decades, and replace them with more efficient, faster pricing models.

Analyst firm Gartner has predicted that by 2018 “40% of B2B digital commerce sites will use price optimization algorithms and configure, price and quote tools to dynamically calculate and deliver product pricing.” Special quotes and one-off contract pricing agreements often simply cannot be mapped to an efficient technology process, let alone one that can run at high performance on a native mobile app. As has been the case with many backend systems, the actual technology is partly driving the change in process.

The demand for a better experience

Manufacturers have known for a long time that complex pricing models can transform into customer service headaches during the buying cycle, and later on. The overhead from custom pricing and quoting models can take too much time for today’s busy customer. In fact, Pew Research found that 70% of customers will stop doing business with a brand due to a poor customer experience. Other studies show that a customer may speak to an average of 5 different company representatives during the course of a sale, with the need to repeat themselves a frequent annoyance. When compared to their expectation of a “self-service” model, customers will simply not tolerate the time and frustration often incurred. Manufacturers need strong, real-time data to support the many roles involved in a complex customer experience that combines building digital trust online, with complex support offline.

Once again, data is often the answer. Direct-to-customer sales models provide manufacturers with the capability of doing specific pricing strategies to meet market demands, and to have those functions automated. A strong B2B eCommerce solution can handle complex, rule-based pricing calculations like cost-plus pricing or group pricing as well as price lists and contract pricing. Data from direct-to-customer sales gives the manufacturer the ability to meet the needs of specific buying scenarios without the overhead of manual pricing and quoting activities.


Insite Software

date published:

31 May 2018