Today, pricing is one of the most important factors that relates to the success of a business. In fact, 62%  of millennials say that price is the top influential factor when making a purchase.

However, despite how vital pricing is to improving revenue and profit margins, many manufacturers still stick to the status quo when it comes to service parts pricing. Gone are the days of Excel spreadsheets and legacy enterprise resource planning (ERP) systems – these outdated pricing processes create more work and headaches, and cause manufacturers to leave money on the table.

Modern service parts pricing technologies can help manufacturers increase service revenues by up to five percent, and gross profit margins by more than seven percent. If you still need convincing an investment in service parts pricing technology would be worthwhile, here are three ways that sophisticated service parts pricing technology can help manufacturing companies streamline pricing processes and drive additional revenue.

Identify value drivers

More and more manufacturers are turning to after-sales service – the service delivered after the initial sale of a product – to optimize their revenue streams and improve the customer experience. As manufacturers around the world are faced with a volatile durable goods market, as well as disruption from companies like Amazon, competitive pricing that positively impacts the bottom line is more important than ever.

As after-sales service becomes a source of new revenue for manufacturers, it can be challenging to identify value drivers that differentiate a company’s products from competitors. However, using modern pricing technology – instead of outdated cost-plus logic and Excel spreadsheets – allows manufacturers to price items automatically based on market conditions like demand, competitive prices, geographic region and even weather. This will help them identify and capitalize on ways to bolster each individual part’s value to match changes in customer behavior and product demands.

Customer-Centric Pricing

As consumers, we all spend time mulling over pricing. As professionals, it’s easy to forget the simple recipe for pricing success: Whether the coustomer accepts the price itself, and how the price relates to margins. If a price is too high, customers will likely hold off on a purchase, or perhaps find a vendor with a better price. Ninety percent of shoppers say that price is the leading reason why they leave one brand for another, for example. And if the price is too low, companies will be practically giving away service parts inventory, and missing out on crucial revenue.

But what if you could gather pricing feedback from your salesforce and have the ability to adjust prices accordingly? Modern service parts pricing technology paves the way for manufacturers to receive an ongoing stream of feedback from around the world in one central system. This allows companies to easily tweak prices by region to make sure each one produces the best possible profits.

Data Management

Big data has permeated virtually every business sector today. In 2017 alone, spend on big data and business intelligence is on pace to reach $150.8 billion. And given how dependent data is to properly pricing products, if manufacturing businesses are unable to store, access and analyze data effectively, they’re undercutting their chances of competing with other organizations within their space.

Manufacturers should learn to adapt and forecast service parts pricing as quickly and accurately as possible to drive continuous, strong revenue. Further, they should figure out how to tie this pricing reporting data back into their existing business intelligence (BI) pool. Modern service parts pricing technology will provide this, as well as a complete view of business operations to allow for the most appropriate and timely decisions possible. Without technology, pricing data is often too fragmented and disparate to make quick decisions, which can have significant negative consequences on business performance.

Service parts pricing can feel complex, but it doesn’t have to be. Sophisticated service parts pricing technology allows manufacturers to unlock previously untapped revenue streams. By adopting to new technology and business practices, manufacturers can stay on top of their service parts pricing operations, while also gaining a deeper understanding of both their customers and the market conditions.