What really matters in B2B dynamic pricing

Companies that succeed at analytics-based pricing build a strong foundation—and include their salesforce in developing it right from the start.

Like many of its peers, a medical-technology company was struggling to adapt to changing market dynamics. Its traditional relationship-based sales model was coming under threat from increased competition and scrutiny from hospitals, while end users, especially doctors, were still expecting highly customized solutions. Company leaders quickly saw that deploying a system that enabled them to reset price targets in real time at a customer/product level, based on actual facts, could help improve pricing. In other words, they realized that they needed dynamic pricing.

Leadership ran into a few issues with these tools, however: historic data were not clean, no competitive data were available, and sales teams didn’t trust the pricing recommendations and so wouldn’t use them, since previous pricing tools had earned a reputation for making “theoretical” recommendations that bore little resemblance to realities in the field.

This situation is all too familiar to many companies. Developing a dynamic-pricing capability needs as much emphasis on people and processes as it does on analytics and technology.