Customer Success Study Business Products Giant Implements PROS Big Data Solutions to Outperform Unlock Your Data Unleash Your Sales
Executive SUMMARY COMPANY Multi-billion dollar business products wholesaler Distributes 40,000+ products to thousands of companies in the U.S. and Canada. CHALLENGE Managing pricing changes and reflecting those changes in each of its customer contracts. PROS PRODUCTS PROS Pricing Dashboards and Charts. USERS 100 users and more than 200 dealers. HIGHLIGHTS identified millions in revenue in first 25 days. Dealers have been able to grow sales by five percent and profits by more than 100 basis point.
Company Background A leading business products wholesaler in North America was on a mission. The multi-billion dollar company distributes more than 40,000 business products to thousands of independent companies around the US and Canada. These resellers range from small mom and pop stores to large sophisticated dealers that sell everything from consumable office supplies, furniture and electronics, to cleaning and breakroom supplies. The company has a long history of ensuring the highest quality products and services to its resellers. So it s no wonder that to grow in one of the toughest economic climates in years, and turn around seven years of declining margins, company executives wanted to implement a pricing strategy that would deliver the best prices for its customers as well its own bottom line. We wanted a pricing solution to provide us with insight into our data about our customers, our products and our markets, says one company executive. We needed greater visibility into margins and the ability to react quickly to pricing changes. We also wanted to provide those same capabilities to our top dealers, something that they wouldn t have been able to afford on their own. We knew PROS had the technology and best practices to support a pricing strategy that could improve profits and margins, says a company executive. In fact, we identified millions in revenue improvements within the first 25 days.
The Business Challenge Given the sheer multitude of product offerings from a wide variety of vendors, one of the biggest challenges the company faced was keeping up with pricing changes and reflecting those changes in each of its customer contracts. Processes were fairly manual, relying on custom-coded spreadsheets, which made it difficult to analyze prices and set them in a timely fashion. Ultimately, execs wanted to answer this question: Are we setting the best prices, and how do we know? These were the company s key pricing objectives: Establish a single system for managing pricing. Formulate strategies that drive pricing decision-making. Become more nimble in executing price changes in the field. Analyze historical data to determine how to price more competitively. uncover pricing improvement opportunities. Adhere to pricing constraints across all products and contracts. Minimize pricing errors due to faulty data.
We were able to quickly do analysis on a vast amount of data to identify and explain historical trends. THE PROS SOLUTION The wholesaler looked to PROS revenue and cost best practices based on nearly three decades of pricing leadership to help turn the company s pricing situation around. A phased implementation approach provided the greatest ROI in the shortest amount of time, and enabled the company to grow at its own pace. PHASE 1: Provide Transparency into Current Systems and Visibility into Performance First, the company implemented PROS pricing dashboards and charts to more than 100 users, including sales reps, divisional VPs, merchandising employees, pricing teams and executives. This enabled them to analyze key operational data to identify margin improvement opportunities. Before the install was completed, we had tremendous insight into our data that we never had before, says the company executive. We were able to quickly do analysis on a vast amount of data to identify and explain historical trends, the impact of market dynamics and pricing anomalies, he adds. In fact, the company identified millions in revenue improvements within the first 25 days. This included unearthing a very large rebate of $360,000 that was mistakenly sent to a customer, as well as identifying products priced below cost and fixing process breakdowns. Similarly, they rolled out the solution to their top dealers, enabling them to gain insight into how they could improve pricing. We created a new online tool for them powered by PROS, says the executive. When dealers send sales data into the online tool, they now get reports that tell them which products customers are buying and how much margin they are actually making on each transaction. And because the tool also collects information on hundreds of other dealers, it provides extensive market intelligence that allows an individual dealer to compare pricing and performance against other peers in the industry. So far, 200 dealers are using this and the most successful have been able to grow sales by five percent and profits by more than 100 basis points, says the executive. With the PROS pricing tool, dealers are able to sell against competitive pressures from the big box stores and maintain a profitable business by setting more profitable prices without excessive discounting. AT A GLANCE Phase 1 included the installation of pricing dashboards and analytics that enabled the company to: Measure the impact and effectiveness of their pricing policies. Eliminate multiple, disconnected spreadsheets that make it nearly impossible to effectively analyze whether prices are profitable. Develop better corporate reporting on price KPIs. incorporate guidance on floor, target and expert prices to analyze the impact of price changes on revenue and profitability. know precisely how their customers and products are performing against profitability, growth and market share goals. See how customers compare with one another and which products are making or losing money. Model the financial impact of price changes before they make them.
PHASE 2: Manage the Pricing Process & Price More Strategically Next, the company expanded its pricing capabilities to ensure the division s eight-member pricing team could define company-wide pricing strategies that aligned with corporate objectives of profitability, market share and asset utilization. PROS enabled the company to create a pricing strategy around each of its customer contracts and manage this automatically. With all of our prices in one place, our team was able to set and change prices quickly to keep up with cost volatilities and changes in policies, says the company executive. We were able to enact strategies to achieve our goals for each product on each contract, he adds. What s more, by looking inside its operational data, the company has changed the way it prices. PROS helped the company realize it needed to grow the number and variety of contracts to achieve greater pricing differentiation, which has increased profit margins. AT A GLANCE Phase 2 included additional pricing capabilities, which enabled the company to: Gain greater control and accuracy over the pricing process by centralizing all information about their products, customers, segments, costs, prices, margin goals and competitive information. Set rules-based guidelines and thresholds for every product segment. Quickly and accurately update prices for millions of SKUs at one time. Have clear visibility into how changes in cost should affect prices. Deploy greater levels of auditing controls. Leveraging Big Data for Bigger Performance (OR The Results) PROS software leverages the operational and transactional data, and transforms it into invaluable knowledge. Prior to implementing PROS, this company was using spreadsheets to price. With more than 40,000 products on more than 1000 contracts, ensuring that correct margins were being achieved for each product on each contract was a difficult, manual process. With PROS, the company has consistent data to back up those prices and the rationale aligns with their strategy to achieve specific margins. If a price comes out that looks suspect, they immediately know that the source data is wrong, so they have a quick way to find errors. In addition, the company has the right rules and regulations in place so that all red and black pens are priced the same and go through the same approval process, he adds. They can focus on doing more analysis, rather than manually loading in prices. While fulfilling the company s immediate needs to quickly identify margin improvement opportunities and centralized prices, these solutions also provide the flexibility this company needs for future growth and expansion. PROS provided us with technology that was configurable to our needs, says the company spokesperson. This will enable us to continue to grow our pricing processes. What s more, by choosing PROS, the
company has invested in a partnership toward pricing excellence. PROS has the best pricing capabilities that I ve seen and upgrades have been accomplished literally within a day. PROS has made us successful to this point and will continue to make us successful for a long time. PROS provided us with technology that was configurable to our needs, says the company spokesperson. This will enable us to continue to grow our pricing processes.
BECOME AN OUTPERFORMER
In today s highly volatile and competitive business world, companies must be smarter, faster and more agile than ever before. The companies that understand how to leverage their big data with advanced pricing science are able to turn this tremendous, yet often hidden asset into real pricing power. Call PROS today to find out how we can help you outperform. 855-846-0641 info@pros.com pros.com
About PROS PROS Holdings, Inc. (NYSE: PRO) is a big data software company that helps customers outperform in their markets by using big data to sell more effectively. We apply 27 years of data science experience to unlock buying patterns and preferences within transaction data to reveal which opportunities are most likely to close, which offers are most likely to sell and which prices are most likely to win. PROS offers big data solutions to optimize sales, pricing, quoting, rebates and revenue management across more than 30 industries. PROS has implemented more than 600 solutions in more than 55 countries. The PROS team comprises more than 700 people around the world. To learn more, visit www.pros.com. PROS.com Copyright 2013, PROS Inc. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission.