Precision Price Segmentation harnesses the power of variable price response by identifying, classifying, and organizing all customer, product, and order attributes that correlate with price sensitivity in a given market. To date, Zilliant's Precision Price Segmentation has catalogued over fifty customer, product, and order attributes that commonly drive price response for B2B companies. It is typical, though, that only about half a dozen of these attributes prove meaningful for any given deployment. For example, a company may learn that the combination of circumstances related to the end-customer's industry; the product's end-use; the product's category, group, and stock-keeping unit (SKU); order size; competitive intensity; and product mix are what drive price in their industry. Even with just five or six attributes, the combinations of their values can yield a massive (and therefore precise) number of unique price segments.
Two factors promote precision within Precision Price Segmentation. For one, while many companies already consider deal attributes when making pricing decisions, they typically do so in an arbitrary, qualitative fashion. For example, different orders may be eligible for different discounts depending upon whether the order is "small," "medium," or "large" according to subjective order size buckets. In contrast, Precision Price Segmentation quantifies and categorizes order breakpoints based on statistics that reflect the actual differences in market price response. Furthermore, Precision Price Segmentation augments these attributes with previously unconsidered attributes also proven to influence price outcomes, thereby increasing the overall precision and impact.
Two factors promote precision within Precision Price Segmentation. For one, while many companies already consider deal attributes when making pricing decisions, they typically do so in an arbitrary, qualitative fashion. For example, different orders may be eligible for different discounts depending upon whether the order is "small," "medium," or "large" according to subjective order size buckets. In contrast, Precision Price Segmentation quantifies and categorizes order breakpoints based on statistics that reflect the actual differences in market price response. Furthermore, Precision Price Segmentation augments these attributes with previously unconsidered attributes also proven to influence price outcomes, thereby increasing the overall precision and impact.
Given that each attribute may have up to several hundred discrete values (or even more, as in cases where the product attributes are characterized at the SKU level), the number of resultant precision price segments is usually in the thousands, or even tens of thousands, as shown in table 1. While the number of resultant actionable price segments may seem daunting, it certainly points out how "off the market" (imprecise) companies can be in their existing "broad brush" price policies and negotiation guidelines.
| User Company Type | Qualitative Segment Considerations (pre-Zilliant) | Zilliant Precision Segmentation� Attributes | Approximate Number of Actionable Pricing Segments |
| High-tech distributor | estimate of annual spend | annual spend, manufacturer's rebate, margin category, product segment | 6,000 |
| Industrial manufacturer | pricing group, job size, project type | pricing group, job size, project type, dominant product class, channel, market size, inventory | 30,000 |
| Food distributor | customer spend zone | customer spend zone, cuisine type, region type | 300,000 |
| Construction equipment provider | product-dealer | country, product-dealer, competitive region | 9,000 |
| Medical devices manufacturer | contract volume, product type | contract volume, product type, wallet share, customer type, product bundle | 120,000 |
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