Sales & Marketing Management - September/October 2008 - (Page 31)

For another Global 1000 manufacturer, price optimization technology produced gains that exceeded its initial expectations and goals by an astounding 400%—generating $40 million of incremental margin and being recognized as the company’s “most impactful growth initiative of the year.” The point is that while everyone else is struggling just to protect their current levels of profitability, the ability to actually grow operating margins is clearly a significant competitive weapon. And there’s a significant opportunity cost associated with lack of action. When it’s possible for a B2B company to grow their operating margins 10% to 15% by deploying price optimization technologies, every day of indecision or inaction effectively costs them that same amount. Recent reports by industry analysts are also now reinforcing the value of price optimization in tough economic conditions. As a recent AMR Research study declares, “Establishing fact-based pricing, improving margin realization and rectifying unprofitable pricing practices can help companies continue to be profitable during a downturn.” Another analyst firm, Gartner, Inc., credits price optimization as “having a more direct impact on revenues or margins than any other CRM technology through 2010 … The price optimization and management market differs from most other applications because it offers strategic benefits (helping organizations grow revenue and margins) and operational efficiencies (helping companies save time and cut costs).” But even though the opportunity to change the game through price optimization is available to every B2B company, very few will take any action. Even knowing that there’s a better way, most manufacturers will instead choose to hunker down, get defensive and allow salespeople to discount their way into a corner. Others, however, will recognize that this is exactly how sustainable competitive advantage is created. The “hidden opportunity” of price optimization is indeed available to everyone. But in this economy, what will separate the winners from the losers—the emerging leaders from the lagging survivors—is the willingness to take action and turn this opportunity into a reality. —Greg Peters http://harrahstahoemeetings.com http://harrahstahoemeetings.com

Table of Contents Feed for the Digital Edition of Sales & Marketing Management - September/October 2008

Sales &�Marketing Management - September/October 2008 Contents Editor's Letter Brian Tracy University Smart Sales Sales Strategy Smart Marketing Marketing Strategy Smart Management Management Strategy The Low-Cost Sales Leader Why Sales Process Gets the Shaft Training Q&A Technology Making the Case for Travel (Part II) Travel/Meetings On the Road The Way I See It

Sales & Marketing Management - September/October 2008

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