Sales & Marketing managers of a European unit of a large chemical player traditionally relied on their intuition for commodity pricing due to unavailability of data-driven price forecasts. Salespersons with high gut feeling quoted higher prices than the market deterring customers leading to loss of volumes, revenue and margins. Salespersons with low gut feeling quoted lower prices than the market, leading to lower revenue and margins. Changing marketing conditions made it necessary for the unit to realize revenue increases by timely & accurate price adjustments, reflecting the market.
We enabled Sales and Marketing managers to make smarter pricing decisions based on data and AI/ML forecasting rather than just basing their decision on intuition. We worked with these experts and applied our tailored AI/ML algorithms on our extensive data repository to identify relevant business indicators. Further, we predicted the price trends with an accuracy of about 99% and the absolute prices with an accuracy of 98.5%. This solution further helped Sales to convince customers about the rationality of price increase by providing a business rationale.
The solution allowed better indication of future market prices enabling Sales to take more accurate pricing decisions and better customer relationship. This implementation has led to a margin impact of over 500,000 Euros in 9 months.