You probably don't want to hear this but using spreadsheets to manage your pricing is not sustainable. It might be that you already suspect that Excel is limiting the return you and your pricing team deliver to your company, but you have decided to "hang on in there" with the spreadsheets because you've always done it this way and are wary of the consequences of change. Let's look first at the pitfalls associated with using spreadsheets – and then at some further good reasons to ditch Excel. Maybe you'll finally be convinced to try price management software instead.
It's nigh on impossible to quickly and easily set prices for a complex business with multiple levels of customer and product hierarchies. With spreadsheets, it's necessary to go line by line to make a price change. Do you have the time to do this? You'll just end up focussing on getting the high-volume line items right and defer analysis of the rest.
The alternative is "rippling" a price change across your hierarchies from the highest level down in a matter of seconds. How beneficial is that?!! This is the upside of moving away from Excel to price management software.
By quickly reacting to a change in raw material costs or a competitor's price change, for example, you have the time to look at all the line items.
Your Excel price list cannot easily be integrated into your ERP system. Manually keying in price changes is fraught with the risk of making errors.
What if you could automatically update your ERP system moments after you execute a price change through your complex hierarchies, instantly ensuring the correct price is available for newly placed orders?
An online pricing tool has in-built error checking to ensure you don't unknowingly sell a product or service at the wrong price.
Are you still managing these using Excel and email? How long does it take you with the "back and forth" emails to gain approval for quotes - the long arguments about deal profitability, who needs to approve each stage etc?
What if you were all looking at the same data, with agreed metrics, and clear ownership by decision-makers - all executed in a centralised repository? Even better, what if that data armed your salespeople to negotiate confidently and win each deal at higher margins to boost your profits?
BlackCurve has an easy to use tool that enables you to make pricing changes, model the impact, and seek approval for prices with just a few clicks.
With Excel, it's not easy to manage the policies and programs required for profitable price setting or deal negotiation. When a policy changes, how do you manage that change so that everyone who uses that spreadsheet on a daily basis has access to the changed information?
When price management software is used as an alternative to spreadsheets, all applicable users and systems are instantly given visibility of the latest correct, active prices.
Some more good reasons to ditch Excel to boost your profits
- Moving away from spreadsheets will enable you to separate the link between cost and price, and to optimise your prices by pricing differently across markets, product and customer segments. This allows you to price according to the value you provide.
- Pricing software finds your price elasticity, assesses areas where you may be able to increase prices without impacting the volume of sales, as well as carry out price tests before executing changes.
- Do you want to set discount limits? Alternatively, if further discounting is required to win an order price management software has an in-built approval workflow for just such an occasion. Doesn't this all sound much more reassuring than working with Excel spreadsheets?
- Without relying on spreadsheets you'll appreciate the reassurance that your products are priced evenly and there is no cannibalisation in sales of premium goods by cheaper alternatives due to incorrect pricing. All the calculations are handled automatically and you can see the impact of any pricing changes. Your pricing will be straightforward and easy to understand.
Easier Than Your Might Think
So, why are you still using Excel? Breaking away from Excel is easier than you might think and could boost your profits significantly.
There have been many innovative developments with pricing software in recent years, and it has become a must-have technology at leading Fortune 500 companies – but even smaller companies are reaping the benefits.
Here at BlackCurve, our aim is to fine-tune your pricing and by so doing, boost your profits.
The Strategy and Tactics of Pricing by Tom Nagle and John Hogan, 2016
Pricing Strategy: Tactics and Strategies for Pricing with Confidence by Warren D. Hamilton, 2014
Pricing with Confidence: 10 Ways to Stop Leaving Money on the Table by Reed K. Holden and Mark Burton, 2014
Oxford Handbook of Pricing Management by Ozalp Ozer and Robert L Phillips, 2014
Pricing: The Third Business Skill: Principles of Price Management by Ernst-Jan Bouter, 2013
Pricing for Profit: How to Develop a Powerful Pricing Strategy for Your business by Peter Hill, 2013