This week we’re talking with Greg Peters, Chairman, President & CEO of Zilliant about the complex world of pricing optimization in the B2B space. Greg was formerly the CEO of Vignette, which saw explosive growth and is one of Austin’s most successful software companies.

Q: Give us the elevator pitch for Zilliant, for those that might not be familiar with the company?
A: Zilliant is transforming how B2B companies negotiate prices for their goods and services, increasing their profitability by tens of millions of dollars.  The underlying innovation is price optimization software that supports negotiated sales environments.  Zilliant’s proprietary optimization approach replaces guesswork and “gut instinct” with data-driven guidance and insight.  For sales professionals, Zilliant’s price optimization means a more analytical approach to the “art of selling.”  For businesses, it represents an opportunity to increase profitability by ten to fifteen percent and more.

Q: Describe some of the complex factors that go into defining an optimum price?
A: One of the biggest factors to influence price optimization is the complexity of deal structures and circumstances in the B2B environment.  B2B salespeople consider a lot of factors when sizing up a deal –am I selling to a new or existing customer? what industry are they in? what products are they buying and how will they use them? how often do they purchase?  what competition am I up against?  All of these market issues should be quantified and considered in order to make sure the rep captures the full market price every time.  While many companies try to help sales people make better pricing decisions by providing them with some data and homegrown tools, there’s no way to accurately or consistently benchmark pricing without the use of advanced pricing science and automated technology.  As a result, pricing decisions are mostly based on subjective assessments by salespeople, who have a natural tendency to over-discount to win deals.  This phenomenon “leaves money on the table” to the tune of 10 – 20% of operating profit.  Zilliant provides the software and science to re-capture these lost profits.

Q: What events have really turned the corner at the company, and cranked up the growth rate?
A: The biggest obstacles that we’ve overcome in the last 18 months are public referenceable customers and an overall increase in awareness.  Now that our technology has been deployed and proven successful in a wide range of B2B businesses, it’s easy for us to provide prospects with customer references that look much like them.  Another major driver is the corporate meta-trend towards being more analytical, leveraging data and business intelligence tools to help everyone in the company make smarter business decisions.  Pricing is an ideal application of this analytical mindset given the vast amount of transactional data that most companies are sitting on.  And unlike cost reduction initiatives that always reach the point of diminishing returns, price optimization drives up revenues and profits, both of which are benefits without boundaries.

Q: Is the company’s technology more effective for customers using it in a B2B context, or B2C?
A: We designed Zilliant’s technology specifically for the B2B negotiated sales environment.  Other software companies offer price optimization for airline, hospitality and retail businesses based on textbook optimization models that fit these industries’ “take it or leave it” pricing models (i.e. buying an airline ticket or computer online).  Until now, B2B industries like manufacturing and distribution were unable to optimize price because those models do not support negotiated pricing. Zilliant is the first to develop price optimization algorithms and automated technology to support these industries that provides negotiation guidance and not just a single price for each deal. 

Q: What can we expect to see in the future from Zilliant?
A: I think you’ll continue to see growth and innovation fueled by a rapidly growing market for B2B price optimization.  The benefits are clear and proven, and Zilliant has established itself as the unequivocal market leader.