3 common pricing and promotion challenges and how to solve them
Despite advancements in recent years to better manage pricing and promotion activities, many retailers and consumer packaged goods (CPG) companies still face numerous challenges when it comes to pricing and promotions. These include disparate and slow processes, inaccurate pricing, and a lack of organizational insight and visibility.
Disparate systems lead to slow processes
Many companies house their trade revenue, pricing, and promotion information in different locations with disparate, incongruent technologies. Retailers and CPG companies alike often rely on unrelated ERP, CRM systems, and external spreadsheets, forcing them to rely on manual updates. Because of the attention these disparate systems require, any pricing changes require a long, manual effort.
Similarly, it is difficult to develop or execute new promotions swiftly. On top of the already slow pricing process, retailers and CPG companies often manage different channel promotions in dissimilar places, adding another level of complexity to an already slow process.
Current strategies lead to pricing errors
External spreadsheet calculations and manual reconciliation to the enterprise resource planning system (ERP) lead to mistakes and inaccuracy. With incongruent systems, retailers and brands have fewer ways to guard against pricing calculation errors. Often with these non-reconciled systems, there is a high risk of human error due to no single source of pricing truth for different pricing requests. It is essential companies’ p
ricing and promotion information is correct because managing prices more closely makes a significant change. In many cases, even a simple one percent increase in effective net price moves operating profit upwards of 10 percent[i]. Businesses need real-time clarity into those promotions that are profitable and those that are not, to be able to adjust the promotions accordingly and avoid losses.
These pricing errors can lead to a loss in profit, but also entail legal ramifications due to inequitable pricing from customer to customer. In an age where legislation defines financial compliance, it is not feasible for retailers and CPG organizations to lack a complete and real-time audit trail of all assets, liabilities and expenses.
It’s difficult to quickly garner insights
Many retailers and brands have a poor understanding of trade profitability. It is hard to drive incremental sales via cross- and up-sell, and mix and match promotions. In addition, outdated performance information is not tolerated in a now digital age. If retailers and CPG companies do not adjust in real-time, they won’t be able to keep up with disruptive competition. They must empower their sales staff with tools to help them deliver pricing and promotions as fast as possible, without impacting the bottom line, with greater organizational insights.
Flintfox’s Pricing and Promotion Execution solution can help
The Flintfox Pricing and Promotion Execution solution, built on Microsoft Cloud technology, provides the real-time pricing visibility, and control, retailers and CPG companies need. The solution uses a cloud-based pricing engine to calculate thousands of pricing requests per second, streamlining processes, improving pricing speed, and calculation accuracy. The Pricing and Promotion Execution solution provides rapid information on product costs and margins, enabling sales teams to quickly respond to omnichannel pricing pressures and adjust the complex trade promotions they need to stay competitive. This empowers companies to quickly and easily maintain pricing rules and trade agreements, while maximizing earnings and minimizing the amount of money left on the table.
Try the Pricing and Promotion Execution solution on Microsoft AppSource today, and for more information follow @FlintfoxIntl. Flintfox’s solution is part of Microsoft’s cloud solution portfolio for the retail and consumer goods industries, which also includes AFS Retail Execution, AFS POP Retail Execution, Plexure Retail Personalization, Neal Analytics Inventory Optimization and Dynamics 365.
[i] https://www.flintfox.com/trade-revenue-management/advanced-pricing/
