DM 13: Identify and eliminate underperformance

Pricing manager

Business Objective:

Detect automatically underperforming products and / or products and take price corrective actions.

Limited visibility into underperformance and outliers making it difficult to achieve margin or other goals.

Detailed view into underperforming parts of your business enable you to prioritize and act on pricing improvements.

• Real-time visibility into business results and outliers

• Customer/category level insights into underperformance

• Increase margin due to improved programs over time

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In this case, we're acting as a pricing analyst who's regularly reviewing the performance of customers and products. Often we see certain complexity, such as multiple data sources to be combined manually or limitations which ultimately make it inconvenient or difficult to identify how the products in My Portfolio or customers are performing. This would make it difficult to achieve margin or other goals. Pricefx helps to gather all that information automatically and provides a detailed view into your underperforming products or parts of the business, but also helps prioritize actions on improving them accordingly. So with Pricefx you got all the data available in the system you need to be able to analyze and because of this, Pricefx also provides real time visibility into the results and outliers of your business. It helps you gain valuable customer or category level insights into underperforming products. Finally, it allows you to increase your margin thanks to pricing programs and prices improvement over time.

But let's take a look how this goes in Pricefx.

When opening dashboards in Pricefx you will notice a filter criteria on the left-hand side. Here, you can define time periods and aggregations on both product and customer levels. You can also add colored highlighting or grouping for different attributes.

However, we will not focus on these details right now but instead, we will take a closer look at the charts.

At the top of the screen, we can see the revenue and margin development over time - both of which are trending upwards. But for more detailed information, you can be looking at the charts further down. On the left-hand side, there's a chart showing revenue and margin per customer, with each dot representing a different customer type. On the right-hand side, we see the same chart but for products, with each dot representing a different product group and quadrant. You can easily spot a product group highlighted in black - electrical protection and controls - and one product in particular stands out with higher revenue but lower margin.

To investigate further, we'll move to a different dashboard and check for any geographical differences.

This chart is already filtered down to the specific product we identified before. Here, we see different lines representing different price types - local list price, invoice floor price, stretch price, global upper corridor, and global lower corridor - along with actual and forecast quantity. All of this is broken down by country. You can easily spot that in the Czech Republic and China, the list stretch and floor prices are all low, even lower than the global corridor - which explains the low invoice price.

So now as we have identified which product and country is or are causing the situation, we could either go and revise individual items on the specific price list or consider another pricing strategy during our next price revision.

An example of how this is done is shown in a different use case (DM05, DM06) where we guide you through price revision flow in the use case about efficient and effective repositioning of products.

Of course, what has been shown here is only one example. Different charts and dashboards can be built to serve your individual business and analytics needs.