We have developed a unique methodology designed to help any supplier quote the optimum price to each customer for each product. We call this methodology Sardinia.
All organisations want to sell more products at the highest price possible.
However if a business has a complex product list, with many product permutations, it can be impossible to keep track of competitors’ prices.
Take for example car leasing. Suppliers in this market can be asked to quote for any car make, model, engine size, body shape, fuel type or transmission. Incredibly, that amounts to around 6,500 vehicles, once you’ve multiplied up all the options. Let’s say there are 10 popular lease periods (18, 24, 30, 36 months, etc), 10 popular mileages (5,000 p.a, 6,000 p.a., etc) and that cars can be ordered with or without maintenance. Multiply that together and you find there are 1.3m possible prices to be quoted. No leasing company can track that number of competitors’ prices: the data isn’t available.
In most markets the customers usually have the option to shop around for the cheapest price. Suppliers then feel intimidated and believe they have to cut their prices in order to compete. Sometimes they are correct – they do need to cut their prices – but generally they don’t have to do this across the board for all products. There will be some products where it is essential to cut prices to compete, and generally there is another group of products where the right approach would be to increase prices.
The aim has to be to calculate the optimum price; the price that maximises the probability of winning the deal at the highest possible price.
This isn’t impossible to achieve. The trick is to identify the elasticity of demand for each product for each client – which is something that most companies don’t do.
And Sardinia does this.
It asks the question “If the supplier was given a week to deliver a quote, what information would they assemble and how would they use that information to arrive at the optimum price?”
Sardinia then answers that question, using its own rules engine to identify the key variables at play and then digging through its database to look for information that will help it arrive at the optimum price. If at all possible it will come up with the right answer and recommend this as the price to quote.
Rather than taking days to do this, Sardinia pulls off this trick instantaneously, delivering the results a few milliseconds after the end-user customer has pressed Enter on the supplier’s web-based quoting system.
We developed Sardinia to work for asset finance and leasing companies (any type of asset) but it can be deployed in any business that has a large number of products or clients, or issues a lot of quotes.
To continue the car leasing example above, if the supplier has 1,000 clients to whom it routinely issues quotes, it has to be able to produce any one of 1.3 billion quotes, with great accuracy, immediately. Sardinia does this.
Please contact us for more information about Sardinia.
Incidentally, if you’re asking the question, “Why is this called Sardinia?”, the answer is that Colin Tourick developed the core functionality over five days, whilst sitting under a palm tree in Sardinia.