PROS has been in business since 1985, but over the past 10 years, the company has transformed itself from being primarily a vendor of on-premises price optimization software supporting the airline industry to providing a cloud-based set of applications that use data and artificial intelligence (AI) to aid in price determination. PROS also offers a scalable configure, price, quote (CPQ) application.
At their recent Outperform event in Denver, Colorado, PROS announced a series of far-reaching initiatives that aim to reposition the vendor as providing a critical application for selling organizations that leverages data and AI to move pricing and personalized dynamic pricing to the next level. Related, PROS announced CPQ features including an interesting new collaborative mode that enables prospective buyers to review quotes and adjust certain terms synchronously, rather than the more typical offline email, review and return model.
Overall, the conference embodied two major themes. Using the story of the polar explorer Ernest Shackleton, President and CEO Andres Reiner highlighted the continued changes in the economy over the recent past, and how uncertainty and volatility are here to stay. Like the ill-fated Shackleton trip to the South Pole, the best laid plans need to be continually adjusted in reaction to unpredictable events. As part of this theme, PROS highlighted three trends that apply to organizations: the continuing digitization of business resulting in increased digital interactions between buyers and sellers, an expectation of more direct and immediate customers which can lead to less brand loyalty, and the need for technology to support innovation in customer experiences that customers don’t necessarily realize they needed.
The second major theme was the shift in PROS’s positioning as a provider of discrete applications to one with a real-time, AI-driven platform for sustained profitability. This involves refactoring the discrete applications on a more modern data architecture, recognizing the value of data engineering and architecture as foundational for responsive and deployable AI to aid in optimizing and personalizing customer engagement as part of the buying process.
PROS has a long history of innovation in travel industry pricing, especially air travel. As part of Outperform, PROS demonstrated their latest developments in the application of dynamic pricing that use characteristics of the buyer to help determine price at the point of purchase. The example given was for travel ancillaries such as a better seat where the offer price is linked to the inferred motivation and propensity to pay of the buyer. For example, customers traveling solo are more likely to be on a business trip, as opposed to traveling with two children under 18 and hence more likely to be on a personal trip or vacation.
PROS also put focus on non-travel organizations and included some announcements regarding their CPQ application called Gen IV that incorporates their latest in AI-driven advanced price management. The collaboration capabilities in this fourth-generation iteration complement the existing internal quote review capabilities that have been continually enhanced by AI. One of the key characteristics of Gen IV is the enhanced account and buyer segmentation capabilities that works even when source data is limited and sparse. This enables data-driven personalization for price recommendations. These advanced capabilities form the core of PROS support for the “P” in the CPQ review and approval process.
Many organizations have a deal desk concept, by which a manual internal review of quotes is needed before sharing with a prospective customer. Even when facilitated by an electronic approval process, it is still effectively a manual review. PROS’s Smart CPQ provides a better approach to both the internal and the prospective customer review process. The inclusion of enhanced pricing information, through AI-assisted price analysis and recommendations and a more intelligent application of approval triggers linked to customer type, allows for an active internal deal review process. The new customer collaborative quote capabilities announced at the conference are currently in an early adopter stage but have the promise of simplifying the buying process by providing a shared space where quotes can be reviewed interactively and securely, allowing buyers to refine quantities, product and service selections. This is a logical extension to other vendors’ forays into collaborative deal rooms, utilizing a shareable quote document with a live connection to product catalogs to enable a more streamlined approach towards developing an acceptable quote.
Supporting a more collaborative and interactive approach to B2B buying engagement with improved guardrails at the point of sale holds the promise of improving the buyer
Although historically better known for price optimization, especially in the travel and hospitality industries, PROS has ambitions to widen their product market fit, retooling their applications as an integrated platform play with data and AI at the core. We believe that the techniques and lessons learned from their history of dynamic pricing at the point of sale can be incorporated into their offerings in the wider B2B market, improving the all-important buyer and customer experience. We recommend B2B vendors who have multiple SKUs and combined product and service bundles take a look at PROS and to see whether their business could benefit from a more streamlined approach to the CPQ process while retaining important guardrails that will not slow down the pace of business.
Regards,
Stephen Hurrell