Pricing shapes demand and demand shapes pricing.
Traditionally, the two were much more separate discussions. Today, the power of AI creates an opportunity to blend price optimization strategy with demand forecasting to create a value multiplier for distributors.
Episode 11 Introduction
Cliff Isaacson, EVP Product Strategy joins our show today to discuss the role of AI in pricing strategy. He shares how distributors are using Price Optimization solutions that combine pricing with supply chain planning to navigate the uber-complex B2B sales channel.
In fact, according to Gartner, nearly 1,000 companies had deployed Price Optimization and Management (PO&M) solutions at the end of 2018 — a 30% increase from 2017. Furthermore, Gartner estimates that as many as 10,000 B2B companies globally might benefit from a PO&M deployment.
when you combine Price optimization solutions with demand forecasting and ai, you get a continuum of intelligence that just keeps improving over time.
How AI-Enabled Price Optimization Works
AI-enabled Price Optimization solutions bring smart analysis to both price segmentation and customer segmentation across a broad assortment of items. So distribution businesses can get closer to actual demand BEFORE they make a risky price adjustment.
These systems apply AI and Machine Learning to merge big data with computational power to deliver deep confidence in your demand forecasts. You know the financial outcome will be a good one. And that’s a massive competitive differentiator.
Unlike B2C retail businesses where demand is much more obvious, the science is different in B2B. You have volume plays, payment terms, supplier negotiations. Even the item mix is much broader and should be analyzed with a different kind of intelligence.

A fully integrated Price Optimization solution quickly identifies under-priced and over-priced items, calculates max price, and identifies your top price-sensitive customers. So you can respond with agility and impact gross profits. Contact us after you listen to the show to get ROI examples or just share your pricing challenges.
Episode 11 Show Notes
Todd: Earlier we talked with Rod Daugherty about AI and machine learning in supply chain planning. Now we’re going to explore the role AI plays in your pricing strategy. We are joined by Cliff Isaacson, Director of Pricing Solutions. Cliff, Welcome!
Cliff: Thanks for having me, Todd. Yes, I want to start by saying that the Art of Pricing in an AI-driven world involves a great deal of science.
There are several points I want to make today:

* You have to look at price sensitivity, which is very difficult to determine and ultimately the customer’s willingness to pay.
* It’s even more difficult for certain items and industries such as distributors and manufacturers selling on B2B channels.
* If you want to get better at determining price elasticity, you HAVE to have Machine Learning.
* Pricing segmentation best practices vary by industry, but all can benefit from Machine Learning.
* And finally, pricing strategy approaches depend on customers and industry, but are gaining early benefits from AI.

Todd: I’ve heard you talk a lot about retail vs. industrial price optimization. How does the science differ in each of those applications?
Cliff: Science in B2C pricing: elasticity measurements, pricing segmentation,