Pricing is at the heart of any sales quote. Playing a critical role, pricing influences whether a deal goes through or falls apart. It also has a multifaceted impact on various aspects, such as financial health, profit, and overall business growth.
That said, pricing needs to be fair, current, and accurate; otherwise, it can ruin your chances of successfully closing the deal. That is where real-time pricing steps in, enabling sales teams to keep pricing up to date in the sales quote, taking all the factors into consideration.
In this article, we will explore how real-time pricing enhances the quoting process and why it’s becoming a must-have for modern sales teams.
What Is Real-Time Pricing?
Customers demand speed and precision when it comes to pricing. Real-time pricing (RTP) is a method that updates prices using live data. It involves fetching information from various sources, such as product configuration, inventory levels, and market trends. Instead of updating prices manually, real-time pricing is updated automatically. As a result, sales teams quote with the latest prices.
Many industries already use real-time pricing, such as manufacturers, travel companies, and service providers, to adjust prices based on the real-time data collected on several factors mentioned above.
Benefits of Real-Time Pricing
Real-time pricing offers several advantages to organizations:
- Better control over profits and margins.
- Improved cost efficiency as prices are adjusted to changing market conditions.
- Increased customer satisfaction (personalized pricing).
Real-Time vs. Static Pricing
Real-time pricing is dynamic. It updates instantly based on real-time data. This includes factors like product configurations, current inventory, raw material costs, competitor prices, or market demand. Prices change as soon as conditions change. For example, if the cost of a product component increases, the real time pricing engine reflects that change immediately.
Static pricing is fixed. Prices are set ahead of time and stay the same until sales reps update them manually. These updates may happen weekly, monthly, or even less often. Static pricing doesn’t respond to real-world changes in real time, which can lead to outdated quotes.
| Real-Time Pricing | Static Pricing |
| Real-time pricing is dynamic | Static pricing is fixed |
| It updates automatically based on real-time data | It is updated manually |
| Pricing changes as soon as the condition changes | Pricing does not change with the change in condition. It has to be adjusted manually. |
| Results in fast and precise sales quotes | May lead to outdated sales quotes |
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The Impact of Real-Time Pricing on Quote Accuracy
1- Pulls Real-time Data
The real-time pricing engine fetches data from multiple sources to set prices instantly. This includes current inventory levels, raw material costs, competitor prices, and market trends. That means every quote reflects current and accurate pricing and not obsolete prices.
2- Eliminates Manual Errors
Manual pricing updates can be slow and prone to mistakes. A sales rep might use the wrong spreadsheet or forget to apply the latest cost increase. With real-time pricing, the system updates prices and discounts automatically. This eliminates the chance of human error.
3- Responds to Market Changes Instantly
Markets shift quickly and prices go up or down. Real-time pricing reacts to these shifts immediately and is reflected instantly, which ensures accurate quotes. Management doesn’t have to wait for someone to notice and update the numbers.
4- Builds Trust with Customers
When customers see that the pricing in the sales quote is aligned with the customizations they choose, they feel more confident. This builds trust between both the organization and the customer, leaving no room for last-minute surprises. It helps buyers make faster, more confident decisions.
Real-Time Pricing Engine in CPQ
When real-time pricing is integrated into CPQ software, quoting becomes faster and more precise. CPQ software helps sales teams configure products, apply pricing, and generate quotes automatically. It ensures consistency, reduces manual work, and speeds up the overall sales process. With CPQ software in place, organizations can fetch relevant data instantly and apply it in the sales quote to ensure up-to-date prices and discounts. This also reduces the risk of errors and rework.
Real-time pricing also helps management shorten the quote-to-sale cycle. Sales reps no longer need to add prices and discounts manually and wait for their approval. Pricing is added automatically based on the customizations of the final product.
Benefits of adding real-time pricing to CPQ:
- Quotes reflect live market and business data
- Fewer pricing errors or revisions
- No delays caused by manual price validation
- Improved rep confidence and professionalism
- Faster approvals for sales reps
- Enhanced customer experience
Common Challenges and How to Handle Them
When it comes to implementing a CPQ solution with real-time pricing, one of the biggest challenges organizations face is poor data quality. Implementing real-time pricing takes time as the setup requires precise and up-to-date information that can ensure accurate quotes every time.
Another challenge organizations may face is change management. Sales teams may be used to their old way of working and hesitant to learn about a new system. To overcome this struggle, management must provide proper knowledge and training related to the implementation of CPQ. They must motivate the sales team to use the solution to its full potential.
Conclusion
Customers want to believe in your pricing. They want to know if it’s fair. That belief starts with accuracy, and real-time pricing delivers that. It gives the sales team the ability to deliver quotes accurately and instantly.
If your organization aims to deliver accurate quotes with real-time pricing, get in touch with our team. We can help you integrate real-time pricing into your quoting process and build a faster, more reliable path to closing deals.
FAQs
1- What is real-time pricing in CPQ?
Real-time pricing in CPQ is the software’s ability to integrate with other systems and fetch pricing data during the quoting process. It ensures that every quote is up to date.
2- What is real-time pricing used for?
Real-time pricing is used to adjust prices and discounts based on product configurations, inventory levels, material costs, and market conditions. It helps sales teams generate accurate quotes and maintain pricing consistency.
3- What industries benefit most from real-time pricing?
Industries with dynamic pricing, customized products, or frequent cost changes benefit the most. These include manufacturing, retail, logistic, telecommunication, and insurance industries.
4- Is it necessary to use real-time pricing software?
Real-time pricing software can make a significant difference if your organization handles complex products. However, you can choose a CPQ solution that not only offers real-time pricing capabilities but also streamlines product configuration and sales quotes/proposals.
5- What challenges are involved in implementing real-time pricing?
Some common hurdles include inconsistent or outdated data, system integration issues, and team adoption.
6- Can Cincom CPQ provide real-time pricing functionality?
Yes, Cincom CPQ offers real-time pricing capability by implementing pricing rules and logic that changes the price instantly based on the customizations of the final product. It also integrates with ERP systems to fetch accurate and up-to-date data.
