A leading logistics and transportation services provider based out of Germany approached Quantzig to leverage its expertise in price optimization to address the mounting inaccuracies in their spot market pricing methods and estimations. The implications of their inaccurate pricing strategies resulted in a sharp dip in the revenue generated from the truckload shipment segment in the corresponding spot markets and also led to a rise in the cost of securing capacity.
The Business Challenge
Like any other industrial segment, the logistics and transportation industry is currently witnessing a plethora of changes that have bought in new opportunities. However, the introduction of new technology, business models, and pricing strategies have further complicated the market landscape, making it difficult to sustain a competitive advantage. The client a leading logistics and transportation services provider was looking at leveraging price optimization models to generate price benchmarks to achieve certain business objectives. They were looking at deploying price optimization models that would help them enhance their ability to forecast price fluctuations and devise robust pricing strategies.
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The increasing complexity of global supply chains signifies that you should be well aware of your expenses and use price optimization models to better track and control spend. This is where you should be cautious, as adopting a wrong approach to price optimization can leave your organization far short of its savings goals. Contact our price optimization experts to know more.
Solutions Offered and Value Delivered
To help the client tackle their core challenges, the price optimization experts at Quantzig adopted a comprehensive approach that helped them implement better pricing strategies to improve their profits. A detailed analysis helped our experts to delve into the intricacies of the clients’ challenges and understand the perspective of the investors. The solutions offered by our experts enabled them to leverage pricing optimizations models to redesign their pricing strategy. The implementation of new pricing strategies further empowered them to enhance the accuracy of their prediction by 35% and generate predictions for a much broader range of shipments and equipment types.
In addition, the new price optimization strategy enabled the client to view data updates in real-time, reducing the error rates and prediction variances. With price predictions consistently closer to the actual negotiated shipment price, the client was able to negotiate prices better aligned to the real market-clearing equilibrium price. As a result, the company is now better positioned and well-equipped with robust optimization models to set proper margins, reduce error rates, and improve overall revenue. Moreover, the price optimization solutions and recommendations proved to be effective in bringing down price variances of their shipments by a whopping 46%, leading to the generation of additional revenue.
We help our clients analyze customer behavior and set the right prices by analyzing price sensitivity, purchase patterns, loyalty programs, and more. Request a FREE brochure of our pricing analytics solutions to know more about our core capabilities.
What is Price Optimization?
Price optimization revolves around analyzing the spot market prices to identify pricing sweet spots and employ better pricing strategies. Today, organizations up and down the supply chain spend a considerable amount of time to ensure that their products are priced appropriately to drive profits.
Quantzig is a pioneer in the field of data and analytics, specializing in offering customized pricing analytics solutions to meet the requirements of different industrial segments.