PROS cloud platform drives $74M revenue uplift for office supply distributor

Operating more than 1,000 stores in over 60 countries across North America, Europe, Asia, and Latin America, this distributor is a global supplier of B2C and B2B office products and services. In the digital marketplace, it also runs more than 40 websites and 15 corporate contract internet sites.

Despite strong reporting in recent years, the office supply distributor was still experiencing a slide in revenue since 2014, when revenue had peaked at $12.7B. They needed a digital transformation that included the ability to optimize their prices according to real-time market conditions. At the same time, they also saw an opportunity to enhance their sales processes to make their teams faster and more efficient.

Facing the causes of declining revenue

Before partnering with PROS, the company didn’t have the tools to drive profitable pricing and streamlined selling. To start, they didn’t have an optimized quoting solution. Instead, they relied on spreadsheets and emails to create quotes and get them approved. However, they did have a price optimization solution in place—but they had reached the limits of its capabilities and found they needed something more. The key failings of their previous solution were:

1. Poor pricing visibility

   The organization lacked the ability to stay up to date with all the markets they were operating in and to take all market factors into account when pricing their products. This made it difficult to optimize prices for profitability or manage their pricing at the customer level.

2. Inefficient quoting processes

   During negotiation, sales teams sometimes took weeks to manually generate quotes. It involved aligning all the SKUs from their Request for Pricing (RFP), which sometimes numbered in the tens of thousands. Then, approvals had to cycle through multiple teams, including purchasing and finance, and sometimes as far up as the CFO, before finally being approved.

3. Inflexible solutions

   The company was using an on-premises pricing solution that couldn’t handle the huge volume of SKUs involved in the quoting process. The system’s lack of flexibility meant they couldn’t price at the customer level or ensure consistency between contracts. Furthermore, their pricing solution couldn’t conform with the Most Favored Nation law, which states that if the company informs the government that they’re getting the lowest price on a product, the distributor couldn’t sell that same product at a lower price to someone else.

Going with PROS: one platform, multiple solutions

The company wanted an end-to-end, cloud-based solution that could unify all their pricing and selling processes onto a single platform. Their new solution also needed to help them adhere to government laws and regulations across all markets, handle customer-specific price agreements, and help teams generate RFPs quickly and accurately. The company also needed their new solution implemented quickly.

The company decided to implement the full suite of PROS B2B products: AI-powered Quoting by PROS and AI-powered Pricing by PROS.

AI-powered Pricing by PROS

To start, PROS implemented AI-powered Pricing to bring together the distributor’s complex pricing structure for every individual customer, allowing sales reps to access all the data they needed to sort prices rapidly. Another key highlight in the implementation process included introducing AI-powered price optimization for negotiated prices. With this new capability, sales reps could access pricing “envelopes” for each line item so they could see the floor, target, and maximum prices at once.

To help the company manage customer-specific pricing, PROS also set up a customer profitability model. Using this, sales reps could perform accurate price calculations based on historical agreements and data, essentially establishing a unique profitability model for each individual customer. They also added complex pricing tools that could adjust to different strategies depending on multiple factors, including product type or time of year.

AI-powered Quoting by PROS

Implementing AI-powered Quoting provided the company with several much-needed capabilities. First, the new solution was able to manage up to 22,000 line items, which helped them handle the large volume of incoming quotes. They also gained the ability to capture original or alternate prices, enabling in-the-moment upselling and cross-selling opportunities. Lastly, the document generator helped them attach agreements to quotes and proposals, capturing all changes from one contract to the next to ensure greater consistency.

Moving revenue in the right direction

After going live with the PROS Platform in 2020, the company experienced significant improvements to their business operations and profitability.

To start, the company experienced revenue uplift of $74M, reversing the 6-year downward trend.. They improved profitability and time-to-quote on over $1B in contract sales from over 8,000 fixed price customer agreements.

The intuitive and logical interface of the PROS Platform made it easier to manage pricing activities, transfer data from pricing to quoting, and quickly generate RFPs. Because their administration time has been greatly reduced, sales reps became more empowered to add value to their customer journey. For example, they can suggest alternate products based on margin information. Plus, they had the information at their fingertips to see past price recommendations and customer sales histories to make sure they weren’t setting prices too low and leaving money on the table.

Ultimately, AI-powered Pricing and Quoting by PROS offered the office supply distributor a single, easy-to-use platform that would help them work efficiently, set competitive prices, and grow profit and margins even during inflationary cycles. Lastly, the dynamic, harmonized pricing across the organization allowed them to perform faster and more efficiently than their competitors.

Download the eBook, download the one pager, or connect with a PROS industry expert to find out how AI-powered Pricing and Quoting by PROS can help your business improve sales efficiencies and drive profitable growth.