C-suites in US and European manufacturers and distributors report growing optimism and anticipate shifting buyer sentiment in 2025

DENVER - Nov. 13, 2024 - PRLog -- Manufacturers and distributors are optimistic about better economic conditions in 2025 and are planning accordingly, says new research released by Vendavo, the global leader in B2B pricing, selling, and rebate management solutions and Experis Pricing Solutions. In the 2025 Pricing for Profitable Growth Outlook, C-suite members identify top pricing considerations in 2024's sluggish economy, what they know about buyers today, and how they will price their products in 2025.

Nearly half of all responding US and European manufacturers and distributors (46%) say they are cautiously optimistic about 2025 and are preparing their pricing models for better economic times. One–fourth (26%) go further and say they feel bold and have already implemented new products/services and pricing models.

"Organizations are focused on boosting profits, and margin improvement strategies are essential today," said Eric Carrasquilla, CEO, Vendavo. "Finding and offering the right product at the right price at the right time to the right customer is table stakes for successful commercial operations. Every other growth initiative will deliver little value without the right price."

Insights into how market pressures influence buyers are foundational to offering the right price. In 2025, leaders anticipate buyers' willingness to pay (WTP) thresholds - or the maximum amount of money they are willing to spend on a product or service – will prioritize customer experience (34%), product support options (32%), and sustainability (30%).

C-Suite pricing considerations, anticipated shifts in 2025, and the resources required for effective price optimization are outlined in the report, including:

• How inflation influences pricing strategies. Before adjusting their prices to inflation, manufacturing leaders first consider revenue goals (45%). Distribution leaders are most concerned with maintaining margin (38%) and meeting customer demand (37%). Both manufacturers and distributors report their top price optimization strategy is the value-based approach (28%), followed by the market-based approach (25%).
• Pricing automation grows while AI use stalls. Automation and AI offer pricing advancements, but AI adoption remains challenging. C-suites understand software is required for successful pricing initiatives. Approximately half (49% - 53%) report fully integrated instances for setting prices, formulating guidance, and providing product suggestions and context to the sales team. To assist with price management, just 29% report using AI to streamline operations, increase efficiency, and boost profitability. Those that use AI say it's for pricing process improvement (50%) more so than pricing intelligence (28%).
• The need for a strong pricing function. Market pressures require agile pricing models. For timely execution, respondents recognize the importance of robust and proactive pricing teams. More than half (52%) of respondents (all with 500+ employees) say 11-20 people are working on pricing, and 95% say they will recruit more in 2025.