The Main Drawbacks of Using Excel

90% of pricing and demand forecasting still depends on spreadsheets, excel and gut-feeling decisions. This comes with challenges as these methods are not flawless. These flaws could potentially hurt your pricing strategy and result in you leaving money on the table. But what are these most important challenges that come from working with pricing models in Excel?

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1. Excel is not useful for advanced pricing methods

Typically, businesses use Excel for managing basic pricing strategies, such as cost-plus pricing, competition-based pricing or other simple pricing analyses. These strategies make you sell your products for a profit, but it still leaves a lot on the table. Many other factors, which make up the consumers’ willingness to pay for a product, are left out.

More advanced pricing strategies are harder to conduct in Excel, such as pricing based on season, markets or on product specifications. Therefore, more advanced strategies are often ignored in businesses where they make use of outdated spreadsheets.

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2. Human mistakes are made in Excel

At least, more easily. Excel is very susceptible to simple human errors that everyone can make on a day to day basis. Replacing a comma for a dot sounds harmless, but in spreadsheets this can have a huge impact on your data.

This harms the effectiveness of your pricing model and could result in a serious amount of money being lost. Something, which I guess, you do not want.

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3. Excel is not useful for collaborative work

Most of the time, Excel is used in an offline environment and data is stored on a single device. Only one person is then able to access this file, while others are not able to work on the data or perform a price analysis. Either one person is responsible for it all, or the entire team needs to put a lot of effort into making sure that changes to the document do not go unnoticed.

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4. Excel is not agile (enough)

Excel is a powerful tool for many businesses, from start-ups to multinationals. However, it is not an agile way of working. People often create Excel sheets that work for themselves, and which are personalized towards a specific problem or geared towards the preferences of the creator.

This is a source of problems when someone else takes over the job. They then need to adjust to an unstructured document instead of a standardized dashboard.

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5. Excel is not useful for large databases

If you have a large data file with a lot of information, chances are pretty high that Excel will be very slow. You can prevent this by having the data separated in different files. However, human mistakes will then be easier to make and harder to spot. Large databases can thus be a problem for how well Excel performs and the accuracy of the outcome.

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6. Effectiveness of decision-making is hard to test in Excel

Whether you are a pricing manager or someone that works with pricing, sometimes you want (or need) to know what the effectiveness of your decisions is. Testing your decisions in Excel is not simple because you can’t keep track of all the changes everyone makes. This prevents you from learning from your “wins” and “losses”.

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7. Excel needs to be kept simple

Let’s face it, not everyone is an Excel superstar. Some can do the most complicated formulas without any effort, while others struggle to understand what is going on entirely. When you use Excel for pricing, you need to make sure that everyone who works on the team knows what is going on. Therefore, you are always limited to the person with the least amount of Excel experience.

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8. Excel is not ‘smart’

While Excel can perform basic price analyses, it is not a smart program. You cannot perform very advanced analysis and external factors and data are very hard to incorporate. Sometimes your pricing strategy should not only be based on internal data but also on external data. Excel cannot handle all of this and is thus considered to be ‘not smart’.

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Pricing is a crucial part of every business, and it should be treated as such. You probably have IT systems for your legal and sales departments, why not have one to structure your pricing as well? SYMSON allows you to make your pricing more intelligent by combining human expertise with AI insights. SYMSON helps you to automate your tasks, it makes advices how to increase your margin and revenue and let you combine multiple pricing strategies together.

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Beyond Excel Sheets: The Power of Integrated Pricing Management Software

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Excel sheets have long been the go-to tool for many businesses when it comes to managing prices. However, as businesses grow and new pricing management tools arise, the limitations of spreadsheets become clear.

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One such tool is an integrated pricing management software. It’s a dynamic solution that can transform your pricing strategy, boost profitability, and leave Excel in the dust. Let’s have a closer look at its multifaceted functionality.

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The Unique Features of an Integrated Pricing Management Software

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An integrated pricing platform like SYMSON is designed to address the limitations mentioned above of Excel sheets. With advanced automation and an AI-powered algorithm, it ushers your pricing strategy into the modern age. Here's why it's the way forward:

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• Adjusting Prices in Real Time: Say goodbye to manual updates. Integrated pricing software handles price adjustments in real-time, ensuring that your prices reflect market conditions accurately.

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• Conduct Competitor and Market Analysis: Such smart pricing platforms conduct deep analysis in real time to identify accurate price recommendations. SYMSON's competitor pricing is capable of market analysis, scraping competitor prices and find optimal product prices according to the market factors.

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• Take Price Elasticity into Account: Integrated pricing software takes price elasticity into account while conducting price suggestions. Thereby, it helps you understand how price changes affect demand.

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• Allows you to Customise Strategies: Smart pricing platforms allow you to combine different pricing strategies and use business rules to ensure you don't exceed your expected profit margin. This makes your pricing more precise as it considers more strategies that are relevant to the products and the market.

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• Boost in Profitability: With real-time adjustments, precise analyses, and customisable strategies, profitability sees a significant boost. These platforms ensure you're charging the right price at the right time.

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• Time and Resource Savings: You'll save time and resources previously spent on manual updates, data analysis, and decision-making. In this way, the entire pricing process becomes dramatically sustainable.

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With timely and high accuracy in price recommendations, and seamless automation to take care of repetitive pricing actions like analysis, you tend to transform your pricing into a sustainable process. This ensures an increased profit margin in the long run.

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How Companies Are Approaching Modern Pricing Challenges

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In the middle of September '23, SYMSON presented a keynote speech on Disrupting Pricing with Artificial Intelligence at the Global Retail and E-Commerce Forum organised by EPP, the European Pricing Platform. There, we interviewed the pricing leaders from multiple brands about their pricing challenges, their key learning from the event and how they are now looking to overcome those challenges.

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• Most of the participants mentioned that they found their pricing roadblocks were extremely similar to other companies.
• Pricing leaders are looking for sustainable pricing solutions like using smart and advanced pricing tools for efficiency as their businesses are maturing.
• We had participants collectively agree that Artificial Intelligence and Machine Learning are the future of pricing solutions.

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Integrated pricing management software is a modern alternative to Excel sheets. It transforms pricing from a manual task into a dynamic, data-driven strategy. By embracing real-time price adjustments, competitor and market analysis, and price elasticity considerations, businesses can unlock their full pricing potential and, in turn, enhance profitability. The shift from Excel to integrated pricing software is a leap into the future, where pricing decisions are smarter, more accurate, and capable of delivering substantial business growth. You can unlock the full potential of SYMSON from our Genius Dynamic Pricing, keep more margin and scale your business.

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