Optimizing Customer Profitability

Model your costs precisely. Model and analyze contract deal profitability before making a commitment. Use smart competitor correlation factors and pricing tactics for rack pricing. Switch strategies to react to market conditions.

A robust cost system if and when you need it

Understanding all cost components is the most critical contributor to improving profitability. Some companies have their own cost systems, while others perhaps would like to move away from spreadsheets, or have a much more accurate depiction of true costs. For those with their own cost systems, FuelsPricing has a simple interface that allows you to upload costs automatically or via spreadsheets. For organizations looking for a very sophisticated cost system, FuelsPricing has a robust built-in cost management and calculation system. The cost system allows you to model sophisticated and complex cost formulas to match your valuations. Easily model the most complicated cost structures, whether dealing with owned inventory, rack or formulas, special temporary discounts or TVA’s, product blends, and more.

 

Robust cost system if you need it

 

Full access to your data with precise analytics

Access to data provides the insights you need into your performance, competitive position, and segment profitability. There’s nothing wrong with spreadsheets to do analysis – they are easy to use, distribute, and make it possible study a lot of data. But there are some trade-offs – they can make it harder for a new user to understand someone else’s work, and updating or refreshing an analysis may require an awful lot of rework.

With our proprietary Excel add-in tool native in FuelsPricing, you get the very best of both worlds.

Users feel right at home and avoid having to learn a complicated new piece of analytics software. At the same time users gain access to an extensive analytics library that enables a lot more functionality and extends the Analyst's capabilities.

Users can even link to their own proprietary data sources to create a complete picture of your business, all the time working in one place, one screen, one analytics package.

The FuelsPricing analytics components help users to overcome the restrictions and limitations associated with Excel. Users can also add geomapping, drill downs, custom measures, aggregation and report scheduling. An increasingly valuable attribute of FuelsPricing analytics is the ability to publish and distribute reports instantly, including to mobile devices.

There is plenty of debate as to the value of mathematical price optimization. Let's consider some of the arguments for and against optimization:

Price Optimization Advocates

  • Some science is better than no science at all
  • Having an optimization methodology provides assurance to management that there is rationale to pricing
  • Computational statistics can uncover trends or patterns in the data
  • Other businesses have reported success in optimization (airlines, sports events, etc.)

Price Optimization Skeptics

  • There are far too many variables that effect price, are not public, and cannot be modeled
  • The volatility and variability of data renders data statistically irrelevant
  • Business constraints and philosophy tend to drive pricing decisions more than a truly optimized price
  • In practice, analysts reject optimization output and don’t use it

There isn’t a right or wrong answer. Rather, we recommend a fresh, pragmatic and layered approach to thinking about and implementing optimization. This approach includes building a strong foundation for accessing and mining relevant business intelligence. Most importantly, analysts need access to the best tools to visualize and understand pricing and performance data. Good tools enables analysts to bring knowledge and perspective to the table, and they can blend this knowledge with the underlying data.

FuelsPricing includes sophisticated tools to model deals, analyze true pocket margins, and study customer profitability. With FuelsPricing, organizations can enjoy the best of both worlds - insight and intuition - regardless of which position they hold in the optimization debate.

 

The Optimization Pyramid: Steps to improving profitablity

Quotation

All wish to possess knowledge, but few, comparatively speaking, are willing to pay the price.