Industries

“Pricing is the moment of truth.”

– E. Raymond Corey
Corey was a distinguished Professor of Marketing at Harvard Business School

Many companies don’t adequately invest in developing expertise in pricing as a strategic core competency, and neglect to implement pricing strategies and systems that are designed specifically to optimize profit.

This weakness persists despite ample data, academic research, and the intuition of most managers that optimizing pricing is more impactful than tightening the supply chain, reducing inventory, or trimming production costs.

According to research by Wharton Research Data Services (WRDS), price is by far the most effective financial lever to increase profitability. Price changes also has the fastest impact, compared with increasing marketing or hiring more salespeople. Most companies base pricing on some measure of cost and apply a mark-up rate or amount, while leveraging discounts to drive volume and capture market share. When competitive pressure is felt, they will match competitive pricing if necessary. These simplistic or passive approaches to pricing leave billions of dollars of profit on the table.

While holding cost structures constant, according to WRDS, a 1% reduction in fixed costs will provide a typical firm a 2.45% increase in profit, a 1% increase in sales volume will increase profit by 3.28%, and cutting variable costs by 1% will result in a 6.52% increase in profit. This is where most companies spend their time, resources and investment; to control and reduce costs and in marketing to increase sales volume. Yet, a 1% increase in price results in 10.29% of increased profit.

Higher profits result from pricing strategies and business practices that leverage the power of big data, data science, artificial intelligence (AI), machine learning and cloud computing. Furious’s PROPHETTM platform combines data science with enterprise software to transform pricing from an operational process to a strategic business function that powers increased revenue and earnings.

PROPHET uses historical sales and inventory information and various arrays of marketplace data to provide data-driven pricing, manage dynamic pricing and various discount programs, and ensure the efficient utilization of inventory. PROPHET ingests data from existing transactional systems, data warehouses and ERP (Enterprise Resource Planning) systems, to deliver uniform, optimized pricing across an enterprise. Some of the sectors we serve include:

Mid-Sized Manufacturing

Pricing for manufactured products has been traditionally based on cost-plus models or simple mark-ups over standard cost. The systems and expertise to optimize pricing for profit across a large portfolio of products and sales channels has been beyond the reach of many mid-sized manufacturing companies. PROPHET brings data science to improve forecasts and the utilization of marketplace and transaction data to develop book pricing, volume discount schemas and monolithic pricing can increase revenue generated while protecting market share and sales volume. Frequent and granular evaluation of current supply and demand pressures coupled with in-depth analysis of sales trends allows middle market manufacturers to exert control over pricing, packaging, promotions and discounts to optimize the value of their product portfolio.

We Call it PROPHET for a Reason

Learn how and why we use data science and machine learning to automate processes to improve TV and video advertising yield optimization.

Media Advertising Sales

The marketplace for TV and video advertising is a most dynamic sector, with major technology changes and shifts in the competitive landscape happening ever faster. Sellers need to be strategic and nimble in pricing and packaging of inventory. Optimizing the yield of perishable TV advertising can only be accomplished by intelligently adjusting pricing and inventory to maximize revenue available from the entire portfolio of product offerings. Data science-driven forecasting and automated rate cards driven by your processes and your historical data, coupled with solid rate adherence controls, consistently increase revenue and profit from advertising sales.

TV Advertising Resource Library

Stay current with TV and video advertising trends. Access free downloadable playbooks, white papers, ebooks, and videos in our content library.