A new white paper predicts that B2B companies within the Fortune Global 500 will potentially fail to capture a staggering one trillion dollars in profits over the next five years.
The white paper, “$1 Trillion on the Table: What B2B Companies Stand to Lose Without Price Optimization and Management Software,” was researched and written by Robert Irwin and Mitchell D Lee, consultants at global price optimization and management solutions provider Vendavo.
Read More:Â Â Qumulo Announces Native Support for Amazon Nimble Studio
The shortfall, they say, is because only 14% of companies apply PO&M tools or methodology. This leads to them missing out on profits and margins during what many predict to be a strong rebound from the disruptions of 2020.
“Companies are adopting Price Optimization and Management (P&OM) solutions because they can’t keep up with pricing complexity and want a consistent and effective way to manage pricing,” said Mark Thomason, IDC Research Director for Digital Business Models and Monetization. “After implementation, they typically find money on the table with stale price exceptions and underpriced customers, but the surprise benefit is a higher NPS score because salespeople can support price changes with data and react quickly to negotiations.”
Read More:Â Â SalesTechStar Interview With Michael Schwalb, GM Of Partnerships And Data At JW Player
Companies using PO&M solutions typically realize bottom-line benefits in the range of 1% to 3% of top-line revenue, in the authors’ experience. By using a conservative estimate of a 1.5% return on sales that’s not being captured by the portion of 10,000 B2B companies not using PO&M, they arrived at the $1 trillion figure.
“Regardless of how you play with the model,” says Bruno Slosse, CEO of Vendavo, “It’s based on deliberately conservative projections, and still comes back to the fact there’s an enormous amount of potential profit that could be easily captured by implementing price optimization.”
Read More:Â Â In the Future AI And Web Scraping Will Go Hand-in-Hand
