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Pricing Science for Distribution – How it Improves Your Bottom Line

A great advantage to our clients utilizing Infor’s CloudSuite Distribution (CSD) software is Pricing Science – Realize what it is, the benefits, and how it improves distributors’ bottom lines. Continue reading for all the details you need to determine if Pricing Science is right for your distribution company.

What is Pricing Science?

Pricing Science helps to establish competitive pricing for distributors through a methodical scoring system. Using the data accumulated from your day-to-day operations to guide you towards better decision-making, Pricing Science can help you leverage historical data to achieve optimized profitability.

A Constant challenge for distributors is effectively setting the price the customer is willing to pay while covering costs, and providing a reasonable profit margin.

How Does Pricing Science Work?

Pricing Science uses a two-stage process for separating customers:

  • First, it’s recommended to separate customers by industry or region.
  • Second, separate customers by their historical performance.

After you perform the first two steps, all your customers can then be comparatively scored. Think about the “apples to apples” analogy. Pricing Science uses Key Performance Indicators (KPI’s) to score your customers – with this pricing tool, you can weigh each KPI to emphasize the importance of some measures over others.

Pricing Science also creates product groupings that are recommended based on product visibility scores which measure your customers’ price sensitivity for each product.

How to Adjust Pricing to Work in Your Favor:

After you successfully group your customers to determine which ones deliver the most revenue, are easiest to work with, etc. you can then implement a gradual price shift over time. Price increases generally follow this pattern:

  • Faster for less valuable
  • Slower for more important customers

Benefits of Infor’s Pricing Science:

  • Profitable Growth
    • Expand Products and Services
    • Increase Revenues and Margins
  • Execution Excellence
    • Operations and Fulfillment
    • Cost Management
  • Technology Advantage
    • Employee Empowerment
    • Digital Platform

The Overall Goal of Pricing Science: Not under-charging and losing margins and to provide a true customer profitability analysis.

Thank you for taking the time to read the latest NSA blog article, an overview of what our ERP Solutions Channel Partner and friends at Infor have to offer our mutual clients.

Should you have questions on any of the above Infor Pricing Science content, feel free to reach out to our team of experts here or at 516-240-6020.