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SAP Hybris Revenue and Price f(x)

Gabriel Smith PRICE F(x)


Charles Vogt
August, 2017

INTERNAL
Why Revenue Optimization
The dilemma from the customers perspective
Am I paying too much?

What’s in Am I
it for me? maximizing
my plan?

What are
Am I
the short
controllin
and long
g my
term
costs?
benefits?
What do I save Are there any
by switching providers? interesting add-
ons?

Is the competition better?


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Confidential
Why Revenue Optimization
The dilemma from the service providers perspective

Competitive Profitable Appealing

• Is the offer attractive to • How are existing offers • How unique am I compared
customers? performing? to the competition?
• Is the offer competitive for • What is the impact of a price • What channels are
the target market change? customers using for
• Are we targeting the right • Will the new tariff generate customer service?
market segment? more revenue • How easy are my customers
• What is the impact on • How will promotions and interacting with their
existing competitive offers? discounts affect business services?
• How will customers react to growth? • How are customers reacting
new offers? • How do I control my costs? to new offers?
• Are we launching within the • Are my customers finding
right time window? the best plans for their
needs?
• What is the reaction in
social media?

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Confidential
Revenue Optimization Process

Design Business Revenue Optimization Subscription Order


Charging Marketing Insight
Studio Intelligence Price F(x) Management

Marketing
Predict Visualize
Root Cause Optimize Execute
Churn Revenue
Analysis Pricing Campaigns
Behavior Results

Sales &
Customer New
Service Orders

Finance Monitor Monitor


Executive Executive
KPIs KPIs

Product
Management Deploy
Offers

Billing
Configure
Pricing

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Confidential
Predictive Revenue Simulation & Price Optimization
Business Challenges Value Proposition of potential Target Platforms Other Target CEC Platforms Current Status
SAP & Price f(x) solution
• Businesses struggle to • Gain immediate insight into Ÿ Price f(x) Ÿ Hybris Commerce Cloud Ÿ June/July 2017
understand how pricing potential pricing impacts on n Price Analyzer Ÿ Hybris Marketing n Vendor Evaluation
changes and bundled subscription terms and Ÿ Hybris Sales & Services
n Price Optimizer Ÿ Aug 17
services impact customer service usage impact
buying patterns and n Price Builder Ÿ Hybris CPQ n GTM Planning
potential customer attrition. • Optimize product terms for n Integration Mngr.
maximum uptake n Scope definition
• Analyzing historical Ÿ Revenue Cloud
reactions to marketing • Increase customer
satisfaction n New SaaS solution for Complexity / development
campaigns is tedious and revenue management
mostly unscientific as it • Compare easily versus Effort
competitive pricing options n Available in US now but
does not allow accurate • ??
simulation of effect of available in EMEA & APJ
minute price changes in early 2018
• Pricing for subscription Target Industries n Primarily for subscription
services is relatively services
complex and includes • Services Industries Ÿ SAP Hybris Billing
multiple attributes tied to • Telcos, High-Tech, n Proven enterprise billing
service consumption and Professional Services, and revenue management Target Markets (by priority)
recurring price points for Utilities, Transportation, platform
subscriptions. Logistics, Media n For B2B and B2C
• EMEA
Key Contacts
n Supports complex
• NORAM
• APJ Ÿ Price f(x)
Use-Cases / Scenarios Targeted Revenues
• LATAM n Gabriel Smith
• Pricing Sim for Subscription Services Year Target Revenue n Billy Graham (partner)
• Deal Negotiation & Guidance
2018 ?? n Alex Wagner (APAC)
• Determine optimal pricing strategy Key Competitors
• Predict impact of pricing changes 2019 ?? Ÿ SAP
• Cross-sell/Upsell 2020 ?? n Charles Vogt (sol man)
• Optimize renewal terms
• ??
2021 ?? n Chris Saam (partneredge)
• ML Use-cases
2022 ??

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Confidential
“The single most important decision in evaluating a
business is pricing power. If you’ve got the power to raise
prices without losing business to a competitor, you’ve
got a very good business. And if you have to have a
prayer session before raising the price by 10 percent,
then you’ve got a terrible business.”
Warren Buffet, Business Insider 2011

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Confidential
Interview Questions
1. How do you currently determine and roll out your pricing strategies?

2. What organizations are involved in determining pricing

3. What tools and processes do you currently have in place to determine the optimal price?

4. What analytics tools do you use to understand the impact of your pricing strategies?

5. Can you correlate the consumption and subscription data you collect today with your pricing
strategies?

6. Do you have a cloud strategy for your business user tools?

7. Do you understand how much pricing power you have, and the opportunity to use pricing as a
profit lever.

8. How confident is your sales organization in asking and defending pricing changes?

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Confidential
Business Challenge

In the search for profitability, many companies focus cost cutting, and supply chain/procurement
effectiveness. While these are important, the most effective path to increase profitability is through
optimized pricing strategies and the execution of these strategies. In todays digital economy, with
the proliferation of data, it is increasingly important that you leverage flexible and adaptable tools
that provide quick insight into your business data. Price optimization solutions can help your
organization determine and execute the right price for a given customer, offer, channel and market.

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Confidential
Appropriate Features & Modules

Price f(x)
§ Price Analyzer
§ Price Optimizer
§ Price Builder
§ Integration Manager

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Confidential
Value Proposition

• Leverage advanced analytics to locate opportunities to price better and increase overall
profitability

• Automate the data collection, pricing optimization and approval processes across different LoBs

• Leverage flexible tools and purpose built processes to optimize and manage pricing more
effectively

• Easily communicate and defend pricing changes to customers and partners

• Leverage machine learning tools for a low touch scientific approach to determining optimal
pricing

• Integrated into the SAP landscape for more efficient data exchange for price quotes and master
data

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Confidential
About Price f(x)
… disrupting the pricing and CPQ software industry

… who we are
Young and unconventional software company created by experienced
pricing and software professionals

Our vision is to become the leading SaaS pricing and CPQ provider by end of 2020

Agile team and company that brings good ideas to life quickly

Commercial model built entirely on customers satisfaction and loyalty.

Financially sound with no debt and backed by the recent Series A financing round
(closed in December 2016)

… highlights of the past 6 years


Average YoY growth since market entry: 100% p.a.

EBIT positive 3 years out of 6 since incorporation

ISO 9001 and 27001 certification and Gartner listing in 2016


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Confidential
About Price f(x)
… we serve customers of any size and industry in B2B and B2C

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Confidential