Skip to content
Excel is an easy go-to tool for many business operations and is used often in pricing to support ERP download, price setting changes and ERP upload. As a versatile and familiar tool, its widespread use has reduced the necessity for specialized training or software. One would think that this is especially true for smaller firms, but in fact also many large companies are still highly reliant on Excel, even for core business processes.
Especially as a company grows, Excel can become an obstacle rather than a resource. It was not designed to handle the expanding range of products and services that businesses add to their portfolios regularly. The limitations of Excel, such as file duplication, formula errors, reliance on individual knowledge, maintenance challenges, governance and scalability issues, can create serious problems. Businesses are realizing that the data in Excel is more valuable and vulnerable than they thought. These errors and the manual efforts and time spent cost businesses huge sums of money, every day.
Excel has a long history as an instrument for businesses to carry out price analysis. However, with the advent of professional pricing solutions, new advanced features and capacities have emerged that better allow users to craft, review and maintain winning pricing strategies. This article explores the contrasts between pricing solutions and Excel, highlighting the benefits each choice provides, and what businesses can anticipate from them.
Why is Price Analysis Important?
Before we dive into the comparison, let’s first understand why pricing analytics are essential for businesses.
Optimize Profit Margins
Pricing analytics allow businesses to determine the optimal price for their products or services. By analyzing market trends, competitor prices, and customer behavior, companies can set prices that maximize their profit margins.
Stay Competitive
In today’s fast-paced market, it’s crucial to stay competitive. Pricing analytics help businesses keep up with their competitors’ pricing strategies and adjust their prices dynamically.
Understand Customer Behavior
Pricing analytics also provide insights into customer behavior. By understanding how customers respond to different prices, businesses can tailor their pricing strategies to attract and retain customers. Think of pricing elasticity analysis using big transactional data models.
Excel for Pricing Analysis
Excel is a popular tool for businesses to analyze their pricing. It offers a range of features that allow companies to input and manipulate data, create charts and graphs, and perform calculations. However, when it comes to pricing analysis, Excel has its limitations.
Time-Consuming & Error-Prone
Excel requires manual data entry, which can be time-consuming, especially for large datasets. This process is prone to human error, which can lead to inaccurate pricing decisions.
Information insecurity
Excel cannot ensure information security, as it lacks the capability to maintain a reliable single version of pricing data and information truth. This can result in discrepancies and inconsistencies in pricing data, compromising the integrity of pricing analysis and decision-making.
Limited Functionality
Excel is a general-purpose tool and not specifically designed for pricing analysis. It lacks the advanced features and capabilities that a pricing solution offers, such as competitor price tracking, dynamic pricing, approval workflows and governance, price elasticity calculation, price simulation, scenario planning, and price optimization across the product / service assortment – just to name a few.
Pricing Solution for Pricing Analysis
A pricing solution is software designed explicitly for pricing analysis and optimization (also referred to as Price Optimization & Management – PO&M). It offers advanced features and capabilities that Excel lacks, making it, not only, a more efficient and accurate tool for pricing and analysis, but also allowing business to benefit from better prices resulting in higher margins.
Automated Data Collection
A pricing solution automates data collection from various sources, such as costing data, price value drivers, competitor websites, market trends, and customer data. This eliminates the need for manual data entry, saving time and reducing the risk of human error.
Advanced Analytics
Pricing solutions use advanced analytics and algorithms to analyze pricing data and provide insights. This allows businesses to make data-driven pricing decisions, avoid and repair price leakage, and optimize their prices for maximum profit.
Dynamic Pricing
Dynamic pricing is the practice of adjusting prices in real-time based on market conditions, customer behavior, and other factors. A pricing solution can automate this process, allowing businesses to stay competitive and maximize their profit margins.
Scalability
Pricing solutions are designed to handle large datasets and can scale as your business grows. This ensures that your pricing data is always accurate and up-to-date, even as your business expands.
Governance and Audit-Proof Logs
Pricing solutions include audit trails that allow companies to follow what has changed and by whom, even years after the price change has been made. This introduces transparency and allows businesses to stay in control.
Real-World Examples
Below are two examples where businesses shifted from Excel to a specialized pricing tool and the outcomes they managed to realize.
Company A
Company A is a Chemicals company that used to rely on Excel for their pricing operations. They assigned a team to manually gather and input data into Excel, consuming a substantial amount of their time and resources. As their operations expanded, the management of pricing data in Excel became progressively difficult.
After implementing BrightPrice, which is natively integrated with their SAP ERP and integrated with their CRM solution, Company A observed a significant improvement in their pricing efficiency and quality. With automation and advanced analytics, their decision-making process for pricing was increased 5X, and analytics opportunities worth a 15% growth in profit margins were identified and acted upon.
Company B
Company B is an industrial manufacturing company that used Excel for their pricing analysis. They encountered difficulties in keeping track of market price movements and adjusting their prices accordingly. This led to missed opportunities in sales and decreased profit margins.
After adopting BrightPrice, Company B experienced a significant increase in sales and profit margins. The adaptive pricing functionality enabled them to stay competitive and promptly adjust their prices.
6 Reasons to Upgrade from Excel to Pricing Software… ASAP!
Are you still relying on Excel for your pricing analysis? It’s time to make the switch to modern pricing software for these five crucial reasons:
- Flexibility and Integration: Excel served its purpose, but modern pricing demands more. Pricing software offers the flexibility, integration, and scalability needed in today’s dynamic market.
- Data Security: Excel’s lack of information security compromises the integrity of pricing data, exposing businesses to risks of discrepancies and inconsistencies. Pricing software ensures data security, maintaining a reliable single version of pricing data and information truth.
- Empower Your Pricing Team: Don’t limit your pricing team with outdated tools. Pricing software empowers them to analyze, simulate, and strategize effectively, driving higher profits for your business.
- Transparency is Key: Excel’s black box pricing can lead to confusion and distrust. Pricing software provides clear box transparency, boosting confidence for your sales team, customers, and company.
- Efficiency and Clarity: Say goodbye to manual data entry and errors. Pricing software streamlines processes, ensuring clarity, efficiency, and accuracy in your pricing analysis.
- Stay Ahead of the Curve: In today’s competitive landscape, you need to be proactive. Pricing software offers advanced features to keep you ahead of the curve and maximize your profit potential.
Make the switch from Excel to pricing software today and unlock a new level of pricing sophistication for your business!
Conclusion
Pricing analysis is crucial for businesses to optimize their profit margins, stay competitive, and understand customer behavior. While Excel may be a popular tool for pricing analysis, it has its limitations. A pricing solution offers advanced features and capabilities that can significantly improve your pricing analysis and decision-making.
By switching to a pricing solution like BrightPrice, businesses can automate data collection, use advanced analytics, implement dynamic pricing, and scale as their business grows. This results in more accurate and timely pricing decisions, increased sales, and higher profit margins.
If you want to take your pricing analysis to the next level, it’s time to consider a pricing solution. With the right tool, you can expect to see significant improvements in your pricing strategies and overall business success.
Are you ready for the next step? Contact us at info@sposea.com or book a free demo.