Skip to content
Get in Touch

Pricing AI isn't a magic wand.

Picture of Wesley Bezanson

INTRODUCTION

To many business professionals,  artificial Intelligence (AI) seems to magically solve any problem. This is possibly doubly true for pricing, which can be tricky and complex for B2B businesses. Who hasn't been contacted by someone selling an AI Pricing solution that promises to increase profits, win-rates, and cut quoting time? At PackRaft, we like AI—it can be a helpful tool. But we need to be realistic. If you depend only on AI for your pricing strategy, you might run into some issues.

THE TEMPTATION (AND LIE) OF AI-BASED PRICING

Many companies and software promise that AI will completely change your pricing and give you the best results without much work. This sounds great, especially if you want to make more money. But here's the problem: AI is only as good as the information you give it. It's good at spotting patterns, but it's not so good at coming up with smart strategies.

If you give AI bad information, or if you don't really understand your business, who your competitors are, and what makes your business special, AI will just make those mistakes faster. You might see a small increase in profit, but you'll miss out on the important stuff. You won't get those key insights that come from careful thought and planning.

 

Why Humans Are Still Super Important 

Pricing isn't just about numbers. It's also about understanding people. Customers aren't robots. There are small details, feelings, and ways people think that AI can't really understand. AI can’t ask the important questions that lead to new and better pricing strategies. AI is designed to look for patterns in old data. They're not designed to plan for the nuances of human behaviour.

AI can’t ask the "why," "what if," and "who" questions that lead to those "aha!" moments. Those moments help you see your client's business problem and their pricing in a new way. AI won’t give you those unique ideas. Human pricing experts (probably your experts) can provide that nuanced advice.

 Great Pricing Teams Help Address Other "Human Factors"

We feel bad saying this, we're sure your team is great, but if they're a team of humans, then they probably suffer from a lot of the same human-grade issues that are common in other B2B companies. Here's some examples of human factors that AI just can't help with:

  • Difficult customers: AI can't change how a customer's company buys things. Professional buyers have a lot of tools in their arsenal for getting the best price, including cherry-picking your lowest-cost products or honed negotiation techniques, that frankly, your sales guys probably aren't equipped to handle.

  • Bad Sales Reps (They're not bad, they're just acting bad): AI won't teach them how to sell better, prevent them from issuing big discounts, or negotiate deals with value-backed insights.
  • Problems with your company's culture: If your company doesn't value good, profitable, pricing that helps achieve your objectives,  or if different departments don't work well together, AI can't fix that. You need everyone to agree and work together for real results. 

These are human problems, and they need human solutions.

The "Black Box" Issue

Sometimes, AI pricing tools work like a "black box." This means it's hard to understand how the AI came up with a certain price. This can be a problem. We don't have enough fingers, toes, or other appendages to count the number of times sales reps have asked us how we came up with a price. Businesses need to be able to explain their pricing, especially when it affects how much money they make. Human experts are needed to check AI's work (or at least understand how it arrived at what it did) and make sure it makes sense for the business.

Pricing: It Changes and It's Strategic

Pricing isn't something you set once and forget about. It changes all the time. What's happening in the market, what customers do, and what competitors charge all change. Even with AI, you need to constantly watch and change your pricing strategies. Also, good pricing is more than just trying to make the most money. It's also about:

  • How people see your brand: Pricing can change whether people think your brand is high-end or affordable.

  • Getting and keeping customers: Good pricing brings in new customers and keeps the old ones happy.

  • Managing products: You need to change your pricing as your products (or services) get older or newer. 

     

AI as a Tool, Not a Replacement

To be clear, we think AI can be useful, matter of fact, we're super nerdy about it and love exploring and seeing what it can do. When used correctly, AI can improve your pricing strategy and give you helpful information. Applied to a killer strategy, AI can really help boost your effectiveness and efficiency. 

However, you shouldn't think of AI as a replacement for human knowledge. A strong pricing strategy needs you to understand your business, your customers, and the market. You need to ask tough questions, challenge old ideas, and be creative. That's where PackRaft comes in.

PackRaft: Your Partner for Smart Pricing

At PackRaft, we use both data and human thinking to create pricing strategies that work well and last a long time. We take the time to learn about your specific issues and goals, and we work with you to help your business succeed. Your strategies should be robust, and you should have the context you need to make game-day decisions and adjustments to the strategy to cope with the ever-changing plans that customers (and those pesky competitors) keep tossing your way.

We give business leaders clear information and examples that show how good pricing can lead to more money and growth. We also provide detailed plans and advice on how to put new pricing strategies into action, so the change is smooth.  

Don't believe the idea that AI alone will solve all your pricing problems. Work with PackRaft, and we'll help you find the best path to making more money.

Start Your Journey to Better Revenue: Let PackRaft Help You.