Times are tough for businesses everywhere. Rapidly rising prices coupled with the global economic downturn means consumers and businesses alike are re-examining every area of their income and spending.
In such testing times, businesses need to find ways to maintain market share and stay competitive while still generating a sufficient margin.
The classic business model to protect profit is to sell more or save more but what if you could do both at once?
Reverting to cost-saving measures like reducing headcount or shelving investment projects might bring down outgoings in the short term and make the bottom line look a little better but it’s likely to stunt growth in the future.
Investing for the future – whether in staff, facilities or technology – is ultimately crucial to the long-term success of any business. And that needs to be a consistent process, with buy-in across the business, rather than a luxury when times are good. But when the cash isn’t there, businesses need to find a third way.
Pricing is a business essential but rarely used to its full potential. It’s the sharpest, most versatile tool in the box, if you know how to use it. When levelled-up, pricing can deliver savings as well as growth.
Even in the digital age, where real-time data plays a key role in informing smart and rapid operational decisions, pricing has been neglected.
When seeking to set prices and review profitability, finance, and pricing teams are still laboring over spreadsheets. In fact, the average business spends 71 hours a day*, manually managing pricing. By transforming this process with intelligent, automated pricing, businesses could save $1m a year* straight from the bottom line or redirect that resource to focus on pricing strategy for growth.
Manual price management isn’t only a waste of resource, it’s a waste of opportunity. Through spreadsheet analysis, margin’s falling between the cracks. The volatility businesses are experiencing with both input costs, operating costs and demand means that by the time pricing teams come to execute a change, months of potential margin upside has been lost, costs have continued to climb and it’s time to start the process again.
Multiple channels, complex global supply chains and the sheer volume of data businesses are working with means that pricing needs a multiple-dimensional approach that is only possible with good margin visibility.
With intelligent automated pricing businesses are able to see actual margins at any given time across every category, SKU, and channel and make targeted, strategic adjustments to improve profitability without compromising revenue.
The third way
Flintfox’s Intelligent Pricing Platform takes the time and complexity out of pricing. It provides immediate, up-to-date visibility of factors such as input costs, and so allows businesses to model the impact of price changes and then set and roll out the right price point to deliver the desired margin.
This approach doesn’t just save time and staff costs, it allows businesses to take immediate action on margin erosion, across thousands of product lines in seconds. Instead of resorting to simple but stark price rises, businesses have the ability to make nuanced and strategic changes, that will improve profitability fast.
In tough economic times, businesses shouldn’t have to make binary decisions over savings or sales, by transforming your pricing operation you can have both.
*Forrester, Intelligent Pricing Research, Dec 2021