Industry executives and experts share their predictions for 2022. Read them in this 14th annual VMblog.com series exclusive.
2022 Trends to Watch in B2B Sales and Pricing
By Greg Peters, Chairman, President and CEO, Zilliant
The
largest, most lingering lesson that companies will take from the pandemic-laden
years of 2020 and 2021 is the notion that significant, unpredictable change is
constant. We've helped customers navigate unprecedented waters amid the
pandemic: A seismic shift to eCommerce, inflation and extreme cost volatility,
and supply chain disruption that created previously unseen inventory
availability challenges. As a company, we helped customers find the smartest
pricing, sales and commercial strategies possible to help them retain and grow
market share and improve margins.
Moving
forward into 2022, I don't foresee the pace of change slowing. Those who are
prepared to act swiftly and smartly will be the ones to thrive. Here's a look
at what to expect.
Trends to Watch
The
three big trends to watch for in B2B are:
- The emergence of new ways to
handle real-time price execution
- The mass exodus from
spreadsheets and email as a means to share intelligence
- Mainstream adoption of price
optimization and management software
Real-time price execution:
A
lot goes on behind the scenes of the final price presented to a customer: cost,
value, competition, relationship, order size, shipping, taxes, freight and so
much more. Historically, this unique blend of factors was calculated within the
existing pricing system of record. However, the emergence of eCommerce has
overwhelmed these systems, and they simply cannot keep up with the digital
demand for pricing. As a result, P&L owners are seeking an alternative to
the traditional pricing engine.
In
2022, we'll see a new breed of pricing engines emerge. Instead of clunky,
monolithic software that makes it difficult to update pricing logic and
architecturally difficult to provide real-time pricing, companies will
increasingly adopt a third-party pricing engine that is cloud-native with a
highly available API. By doing so, they can execute real-time pricing calculations against
necessary pricing logic in response to calls from any commercial system, incorporate
an unlimited number of disparate data sets into the pricing engine, perform
complex calculations on demand, and enable real-time price delivery back into
commercial systems.
Mass exodus from spreadsheets and email to share intelligence:
Perhaps
surprisingly, many B2B companies rely on spreadsheets and email to share
intelligence within the organization. This can be anything from cost data to
pricing to business intelligence reports about customer spend to monthly
inventory promotions - you name it.
It's
a curious phenomenon when you stop to consider how complexity and dynamic
market conditions companies face. Whether it's inflation and critical supply
chain disruption today, the sharp acceleration of digital commerce in 2020, or
even looking a few years back, the impact of tariffs. Disruption has been a
constant drumbeat - one that's not likely to quiet anytime soon.
In
2022 we'll see companies stop relying on disjointed business intelligence tools
and email to pass around information. The process is too slow to respond as
quickly as the market demands, and sales reps tend to ignore these reports.
Instead, they'll lean on data science-driven software to help their teams make
decisions faster, at scale across the business and quickly push out that
information in an omnichannel environment. By doing so, they can equip teams
and digital channels to pivot on a dime to always have the latest, most
relevant information at hand.
Widespread adoption of price management and optimization software:
One
of the most oft-quoted facts about pricing - that a 1 percent improvement in
price, assuming no loss of volume, increases operating profit by 11.1 percent -
is nearly 30 years old (Harvard Business Review, October 1992). Yet, despite
its measurable financial benefits, the B2B price optimization and management
software category that emerged about one decade later is just beginning to
enter the mainstream.
The demands
of digital transformation coupled with significant advancements in the
deployability and scalability of price optimization and management solutions have propelled pricing
software into the mainstream. Now, companies can empower pricing teams to
simplify onerous price management and administration tasks while delivering
market-aligned dynamic pricing to maximize margin or revenue.
Innovation Poised for a Breakthrough
A
decade ago, the concept of "big data" was a significant trend. Excitement and
speculation abounded in terms of the exciting use cases. Data is often a
company's most valuable yet untapped asset. Five years later, "AI" was the next
trend tsunami. Yet, today, I would venture that broadly the promises of both
solutions have been vastly unfulfilled, but why?
Companies
are sitting on a treasure trove of data, starting with their order and
transaction data, including volumes of hard-to-use third-party data like cost
indices and competitive data and finally, unique data from new technologies
like eCommerce and IoT. The challenge is finding a means to effectively use
that data and operationalize AI models purpose-built to solve specific business
challenges. In 2022, we'll see innovation in the form of applications that make
it easy to turn the knobs and pulleys on various commercial strategies, game
plan the predicted financial impacts, and immediately impact commercial
decisions across channels.
Investment Opportunities
When
we look at B2B software over the past 20 years, investors have found
opportunities in ERP, CRM, CPQ and eCommerce. These are all applications that
make the execution of critical functions like resource planning, reporting,
quoting, and digital self-service possible. The plumbing, if you will, of B2B
commerce. The plumbing is helpful but requires fuel running through it. That
fuel is mined from data and provides the real-time pricing, sales and other
commercial guidance that allows your company to grow profitably through each
transaction in every channel. Once you have fuel and plumbing, a centralized
command center is critical. This puts your business experts in the driver's
seat, updating prices in real-time as costs change, deploying inventory
availability campaigns, adjusting eCommerce strategies, streamlining rebate
management, pushing highly-targeted customer win-back campaigns, enabling the
most efficient prospecting, and so much more.
In
2022, investors will find opportunities where the fuel and the control center
are enabled within the plumbing of execution software. With all three factors
in play, companies can power intelligent commerce more predictably, reliably,
repeatedly, and profitably than ever before. This is where I predict the next
wave of investment opportunities to come from.
Conclusion
Making
predictions is notoriously tricky, especially after what we've seen in the past
couple of years. But by keeping an eye on these trends, companies can put
themselves in a position to succeed in 2022.
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ABOUT THE AUTHOR
Greg Peters, Chairman, President and CEO, Zilliant
Greg
oversees all of Zilliant's operations, including its strategic direction,
product planning and development, as well as its financial management. Under
Greg's leadership, Zilliant has grown into one of the leading providers in
predictive B2B sales guidance and has pioneered new approaches for companies to
harness the power of Big Data. Prior to Zilliant, Greg served as president and
CEO of Vignette, the leading content management company and one of the most
successful initial public offerings in 1999.
He also served as president and chief executive officer of Logic Works, Inc.
and controller and chief financial officer for Micrografx, Inc. Greg sits on
the board of directors at LiquidFrameworks and Rhodes College, and is an
accomplished industry speaker who has appeared at numerous leading industry
events.