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Editor’s Note: This blog is the third and final in this series.  The first – Competitive Pressures Strain Service Parts Manufacturers – and second – Oops! 75% of Your Service Parts Aren’t Optimized –can be found at the links.

As I’ve outlined in my two previous blog posts, the service parts industry continues to be highly competitive around the globe, borne from a series of trends: a weak economy; automakers’ pressures to cut supplier prices; higher costs for raw materials; and increased competition from global providers, in particular China and India. Coupled with the fact that many manufacturers still use market-based pricing strategies – with 75% of services parts not benefitting from optimized pricing – it’s clear a sea change is in order for manufacturers.

So, with these challenges laid at our feet, what are the possibilities? Purpose-built pricing software and scientific analysis.

PROS Strategic Consultant Tim Mohnke has authored a white paper titled Market-Based Pricing With Competitive Data. In it, he offers insights on sophisticated scientific methods and formulas that can be used to calculate optimal target prices for each service part. The scientific analysis and calculations address the anything but “average issue” – pun intended – when attempting to optimize prices in loose competitive situations.

With the pricing innovations specifically outlined in Tim’s whitepaper, service parts manufacturers and distributors will no longer leave money on the table. By contrast, they’ll improve margins and increase their confidence when implementing pricing strategies.

I encourage you to download the paper. Feel free to send me a note or let me know if you have questions or how we can help you add to your knowledge base.

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Sean Duclaux

Sean Duclaux serves as PROS Service Parts Industry Marketing Manager. He is responsible for the development of the company’s go-to-market strategy, and positioning of its Service Parts pricing and revenue management product portfolio. Prior to joining PROS, Duclaux held leadership positions in enterprise software companies, including AspenTech, BMC Software and Empirix. Throughout his career, he has worked in diverse roles, from product management, marketing, program management, R&D and operations, where he developed a strategic vision to define market-focused solutions and executed go-to-market programs. Duclaux earned an M.B.A. from the University of Houston; an M.S. in computer science from the University of New Orleans and a B.S. from Spring Hill College.

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