Even in Salesforce's humble beginnings, what set it apart as a company was its commitment to put advanced software into the hands of everyday business users who could use the software as easily as ordering a gift on Amazon.
Salesforce was founded on the premise that customers wouldn’t have to install complex programs and then pay to maintain and upgrade them. In keeping with that philosophy, when Salesforce dove into artificial intelligence it set out to create “AI for everyone” with Salesforce Einstein.
Salesforce pricing strategists Shrestha Basu Mallick and Dan Boren, with the support of the Einstein Discovery team, have now taken the concept of democratizing AI and applied it to price optimization and pricing performance management. This price optimization solution is built on Einstein Discovery – one of the first Salesforce Einstein offerings – which specializes in automatically analyzing millions of data combinations, finding meaningful patterns in the data, and providing actionable recommendations.
The solution provides significant value to sales teams. Sales reps are always juggling three priorities on any given deal: the customer’s satisfaction in the value they’re getting, the speed in which they close the deal, and the best price for the company. No human can effectively balance these priorities on their own keeping in mind the different variables – and it's especially difficult for newer sales reps who are just starting their sales careers. Very few tools drive these pricing conversations effectively. It’s equally difficult for sales managers who have very little data-driven insight into the pricing stages of deals. They often end up focusing their efforts on the largest deals or the reps that ask for help, not the reps that need coaching.
Additionally, currently available pricing optimization solutions in the market are expensive – to the tune of millions of dollars – and require complex integrations with systems of record. Extensibility is another challenge with these solutions, and often the same model setup procedure cannot be used across different business units. The end result is that implementing these pricing optimization solutions can require multi-year long engagements with professional service companies in addition to the cost of the software. And at the end of it, the implemented models cannot be updated easily as the business evolves across the years.
The Salesforce team has developed a solution built on Einstein Discovery which has the potential to address all of these challenges. Using historical data from various Salesforce objects, the team identified all significant attributes that influence pricing on deals. In addition to quantity, these include attributes such as customer footprint, market segment, competitive status, etc. An Einstein Discovery model was then trained to predict recommended discount based on these attributes.
This represents a significant step in moving toward data-driven pricing at Salesforce. Whereas earlier sales reps were given only broad discounting guidance based simply on quantity, now sales reps can get meaningful, AI-driven pricing guidance that takes into account each deal's unique signature.
This solution effectively addresses all of the key pricing optimization challenges. Because the models are built on Salesforce data, no complex integrations are required to connect to Einstein Discovery – it takes only a few days to set up an Einstein Discovery model, as opposed to months for custom models. The models are also easy to scale and update and require minimal professional services involvement. Finally, the cost of such an implementation runs no longer needs to run in the millions as it does with other implementations. Einstein Discovery makes the process cheaper, more extensible, and easier to update compared to other pricing optimization solutions in the market.
This work was showcased at Dreamforce 2017 and generated a great deal of customer excitement, and Salesforce's Pricing Strategy team is currently in the process of rolling it out internally.
If you're interested in what Einstein Discovery can do for your company, click here.
Shrestha Basu Mallick is in Pricing and Packaging Strategy for Salesforce