Price Erosion Challenges for Technology Companies
Pricing professionals at technology companies constantly struggle to create and maintain a consistent pricing strategy over the product lifecycle. But, the lack of control over a coherent pricing strategy often results in an inability to deliver proper pricing guidance to field sales. This leaves sales to request pricing based on customer demands, perceived competitive responses, intuition and emotion.
This lack of a disciplined price-setting approach generates too many price approvals via exception. The exception process typically becomes an emotional internal struggle that ultimately results in the approval of some very low pricing in the name of competitive matching. This greatly increases the risk for an acceleration of price erosion due to inconsistent price approvals and confusion between the pricing team and field sales.
To help take back control of pricing, technology companies need better insight into list price setting and automated methods to determine price guidance targets for negotiated deals. Fortunately for technology companies, pricing software can help create a consistent pricing framework based on objective measures. This, in turn, leads to logical price band ladders for a product group, a slower rate of erosion and ultimately higher revenues while protecting market share.
PROS Holdings, Inc. (NYSE: PRO) is a revenue and profit realization company that helps B2B and B2C customers consistently realize their potential through the perfect blend of simplicity and data science. PROS offers solutions to accelerate sales, formulate winning pricing strategies and align product, demand and availability. PROS customers experience meaningful revenue growth, sustained profitability and modernized business processes because of PROS revenue and profit realization solutions. To learn more, visit pros.com.