Pricing Leadership

Initial results are back from our implementation of PROS Scientific Segmentation and Pricing Guidance at a major health products distributor. PROS prices were rolled out in the field in mid-April and the entire sales force adopted PROS prices since the last rep went online about two weeks ago.

• Results so far: 130+ basis point improvement
• Translation: $8 million+ annual revenue improvement – this is just the start

Previously, these guys manually researched and targeted specific prices, but PROS offered optimized prices for all customer and product combinations at the same time. PROS advanced science also augments the initiatives they already had in place. If they had previously set a floor price for a product in a certain region, they are now able to recommend a scientifically optimized target price for the sales rep as well.  Their early experience with pricing actually lead them to work with PROS given our unique expertise in B2B pricing science.

One lesson you can learn from this implementation is that the sales reps help determine whether the pricing initiative succeeds or fails.  This is always true. One of the sales managers here actually instructed their sales reps to ignore the prices and caused some real margin damage. We caught this early, and offered PROS generated prices as “recommendations” while also aligning sales force incentives with the new better pricing and closely monitored results.  We were able to work as a close partner here and collaborate directly with the sales reps to make sure user adoption is high and the results are on target.    

This customer couldn’t be happier with the uplift and we’re looking forward to even better results as we continue the partnership.

Guest Blogger – Sanjay Seth – gives an update on a “Big 3” Parts Aftersales Pricing Implementation with PROS.  Sanjay is a Partner at Carlisle & Company, a firm specializing in revenue and margin strategies, market sizing, share assessment, services marketing and retention, and supply chain management.  Carlisle is focused exclusively on process initiatives related to motor vehicle parts, heavy equipment, construction, and other parts related industries.  Below are some highlights from the interview – click below to view the 5 minute interview with Sanjay.

Why Carlisle & Company selected PROS for their OEM Parts Manufacturer client:

• “flexibility of the solution, the configuration versus customization”
• “speed of the solution – you know in today’s environment everyone wants to see the value immediately, and the PROS team committed to a faster implementation than the other vendors”
• “total cost of ownership was another key driving factor”

Results to date:

“$5-6M in incremental revenue and margin in months… within 30 days we generated one-third of the cost of the software itself… and there is a lot more value to be generated down the road”

Recommending PROS to other parts manufacturing industry leaders and leaders in other manufacturing and distribution sectors:

“When I view the auto manufacturer and the service parts issues and I talk to other practitioners from other industries, I don’t see this being a unique situation for the services parts industry, you have the same issues across other industries”

Manufacturing, distribution, and services leaders learn to improve margins & emerge stronger  

Houston, Texas – May 19, 2009 — PROS (NYSE: PRO), the world leader in pricing and revenue optimization science and software, today announced the success of the New York stop on the PROS Global Price Optimization Leadership Seminar Series, held onsite at the New York Stock Exchange.  Seminar keynote speakers Accenture (NYSE: ACN) and Microsoft (NasdaqGS: MSFT) reinforced their commitment to supporting PROS to deliver advanced pricing science and scalable software with the fastest time to value and lowest total cost of ownership.  Clearly illustrating the message of rapid and high return on investment, delegates heard how a B2B company recently replaced their pricing system, turning to PROS to identify millions of dollars in actionable revenue improvement in fewer than 30 days.

“PROS customers have compelling stories to tell about how their businesses have changed the game with PROS pricing solutions,” said Jeff Robinson, SVP, PROS.  “Over 100 companies have chosen PROS as their partner to achieve the powerful benefits of pricing and margin improvement, and an event like this allows our customers to share those stories with companies just starting the journey – today we heard some very powerful stories.”

Executives have asked for timely and targeted updates on price optimization innovation and industry leading pricing science.  In today’s challenging environment, only PROS is positioned to provide B2B leaders a price-based competitive advantage to manage current challenges and emerge stronger.

“The fact that we are the only publically traded price optimization software vendor with no debt and 10 consecutive years of profitability clearly demonstrates the unique credibility PROS brings to the table when speaking to B2B companies about best practices in price and margin optimization,” said Jeff Robinson, SVP, PROS.  “In addition to being one of the most important criteria for vendor selection, our strong financial viability allows PROS to invest in pricing science and technology to innovate and provide long-term value to our customers at a rate that is unmatched in the pricing software space.”

Upcoming PROS Pricing Leadership Seminars are scheduled for June 9, 2009 in Huntington Beach, CA and June 11, 2009 in Santa Clara, CA.  In addition, registration is now open for the PROS European Price Optimization Forum in Frankfurt, Germany on September 28-29, 2009.