DHL Worldwide Express Has Selected Metreo

Metreo offers pricing execution software designed to streamline, optimise and quicken the sales process for quotes in the field. The system accesses customer, service and pricing information at the time of negotiation, recommends an optimal, rules-based price, and speeds the approval process to the sales rep.

Expediting quotes is as important to DHL as getting the best possible price, according to Isabelle Bax, director of pricing, yield management and sales support at DHL. "The project started about a year ago. We noticed that in complex pricing deals, where a salesperson needs approval for a discounted price, perhaps more acceptable to the customer, the process becomes bureaucratic, sometimes three or four steps. The whole process was taking far longer than it should, up to two weeks."

In DHL's case, price approval moves through sales support, and through the billing group, where customer details are entered into a master file. Bax says the billing system rejected about 20 percent of contracts for various reasons such as incomplete data or insufficient authority. Additionally, when a contract was rejected, it was returned to the originator of the request, who might then working on another account, out sick, or on vacation. "This really would exacerbate this two to three work turnaround for a customer who needs to receive a quote, wants to start shipping and cannot," says Bax.

Setting the right price up front is also important. On a daily basis, DHL secures hundreds or thousands of deals ranging from small customers to millions of dollars per month. Capturing these data is critical, especially since 75 percent of DHL's business is not based on long-term contracts. "We weren't establishing a good learning database to determine the most successful price points," says Bax. "We want to learn from past experiences and project forward to price proposals. There are other benefits, the analytics, the management reporting, but the focus was to respond more quickly with approvals in place and give the right price right at the beginning."

DHL posted record revenues in North America last year, but also posted negative margins for the first time. "They were giving all the incentive to the reps on revenue, but it was bad revenue," says Daphne Carmeli, co-founder, president and CEO of Metreo. "It has to be instant, you don't want to wait 20 days, a FedEx will come in and scoop that up."

Pricing execution, or dynamic pricing, is a subset of EPO, or enterprise profit optimisation, according to John Hagerty, an AMR research director who works in this field. "Pricing is one of the few competitive levers companies have left," he says. "I see pricing sitting between a customer relationship management (CRM) or sales force automation (SFA) view of the world, and a supply chain view. 'How do I price what I'm building?'" Hagerty says these kinds of solutions are popular where there is a high degree of supply and demand, which leads sales teams to operate "pretty much catch-as-catch-can."

DHL will roll out the Metreo solution to the first of seven U.S. regions in June, and expects the other six regions to be online within two months. Bax says she expects a 100 percent return on investment by year's end. "That's exactly the expectation we have as well," says Metreo's Carmeli.

Reproduced with permission from http://www.eyefortransport.com news desk