Born out of the '80s era of airline deregulation, dynamic pricing finds new life and popularity when mixed with AI. In this Pipeline podcast, we talk with Ulrich von Beck of Pros.
Dynamic pricing, a strategy in which prices for things like hotel rooms, airline tickets, computer hardware and basically anything on Amazon change minute by minute, has been around for years.
What's new is AI-assisted dynamic pricing algorithms hard-wired into CRM platforms, giving Salesforce and Microsoft Dynamics users the ability to automate real-time pricing according to market demand.
The pricing scheme as we know it today was born out of 1980s U.S. airline industry deregulation. Anyone old enough to remember American Airlines' Super Saver fares of the Reagan era gets the idea. The travel and hospitality industry pioneered dynamic pricing, which rewards adventurers willing to wait until the last minute to grab a cut-rate deal at luxury vacation brokers, such as Secret Escapes.
Today, CRM software running on cloud platforms, coupled with AI tools, takes dynamic pricing algorithms and couples it with state-of-the-art sales automation. Dynamic pricing algorithms set real-time pricing for many different markets, from travel to sports to B2B companies -- even down to the price a conference center pays its distributor for paper coffee cups.
Dynamic pricing is for those who don't necessarily want to hang around to bargain hunt. But one dynamic pricing algorithms vendor, Pros, claims to add an average of 2% to 3% to its customers' bottom lines -- without extra administrative cost -- up to a 10% boost for some. The algorithms can augment configure price quote systems, which help salespeople more quickly quote prices based on rules automation and close deals more quickly.
It takes a lot of data to feed dynamic pricing algorithms and optimize output.
Ulrich von BeckVP of strategic consulting, Pros
It takes a lot of data to feed dynamic pricing algorithms and optimize output, said Ulrich von Beck, Pros VP of strategic consulting, in this episode of the Pipeline podcast.
That's why companies using the technology typically are generating at least $100 million in annual revenue, but von Beck said: "The real sweet spot is over half a billion." When they integrate Pros' algorithms with CRM, they're typically on Salesforce or Microsoft Dynamics. With enterprise IT at this scale, AI is often an option for augmenting the dynamic pricing strategy.
Listen to the Pipeline podcast with von Beck to learn how Pros won its first customer, Southwest Airlines, 33 years ago and how next-generation CRM and sales automation tools are making Pros and other companies in the dynamic pricing algorithms space more relevant than ever.
