Chris Reddick (President and CEO at Clarity Ventures) and Ron Halversen (Vice-President of Sales and Marketing at Clarity) explain how logic works for multi-tier pricing in a buying group.

Part 2 of a 6-part series (Return to Part 1)

RON: So let's go in and talk about—we just call this Clarity's logic, but it's just the logic that Chris and I are putting forth that, whether you choose the Clarity solution, or whether you go with another solution for your buying group platform, these are just some of the things that you want to think about and some of the strategies. 
 
So I'm going to touch on these at a high level, and then I'm going to want Chris to dive into them from a technical perspective. So first off, and I think it doesn't really need to be said, but you want to make sure the B2B platform is flexible, right? I mean, we have four different pricing models out of the box in our platform, some a hybrid, and we can even customize and do other things. 
 
So whether it's multi-tiered pricing, it's pricing rules, it's flat pricing, which has four built-in tiers—I call that one the Costco model—or whether you have pricing hooks or whether there are certain things where we'll have clients that come in. And if they buy certain things, it could actually run a script that goes into their ERP configuration, checks to see what the quantity is on hand or checks to see what the latest cost was of the latest ones that were shipped in, and might adjust the price in real time accordingly on the website. 
 
That would be using a price hook to auto calculate based on maybe who the client is, the quantity that they're buying, and the particular cost today. And all those things can be taken into account and adjust the price every single time the client logs in. That happens a lot with oil and gas, right? They'll have us go all the way down to four and five decimals in the dollar count, and they'll adjust every single time. And then we'll look at the ability to set pricing levels for different accounts or tiers. And then we'll talk about pricing rules.  

So go ahead and start talking about technically, what does flexibility in a custom eCommerce solution mean? I mean, everybody uses that term: scalable, customizable, flexible, right? We all do. I mean, everybody in marketing does. But what the heck does that really mean when it comes to pricing? What is flexibility and what are the different things we see with our clients? 

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CHRIS: Yeah, that's a great question. So you have the pragmatic reality of operating your business, or scaling the already successful business. And as anyone knows who’s going to be engaged in this activity, you have to prioritize. And there's a tradeoff between functioning the business and getting immediate results versus executing in a more optimized way with your B2B eCommerce platform
 
There has to be flexibility to be able to focus, execute, get great results, and then progress to the next level of optimization. This is really just a constant that there is change, there is a need, a necessity for flexibility and the ability to preemptively know where you're going. Where you are going to go with your business, and what are the different steps in your scaling that you're going to need to be there before maybe even you know about them. 
 
This is what we mean by flexibility. With the pricing. for example, one of the key factors here is that a lot of our clients will come up with a simple pricing model to begin with. But that needs to integrate with their ERP system. So whenever they make changes, possibly they make more levels of pricing or more quantity price breaks, the eCommerce system, the buying group software, needs to be able to dynamically incorporate those additional levels of fidelity, if you will. 
 
In addition to that, it may make sense to adjust the actual pricing model for different types of users. You may want to present a certain type of model that's just pure quantity break to some users, but then roll out a robust loyalty program that is cumulative or additive with the multi-tier pricing, so that someone who's part of the CRM loyalty program gets an additional benefit and you can encourage them as more premiere or select users so that those members get bigger discounts, but they also have to maybe commit to more ongoing revenue that's going to funnel through the system.  

We see these things a lot in that flexibility, it's not just a theoretical flexibility. We can do this, we can make it happen. Frankly, a lot of platforms don't have that ability to be flexible, so you should probably ask. And by probably I mean definitely. Ultimately, this is really what inspired us to build our eCommerce platform. We worked with a lot of clients who suffered from being painted into a corner and therefore not having a flexible solution. So you're going to invest a lot of resources into whatever software you're working with and you want to ask the basic question, “Is it flexible?”  

Now, once you get past the theoretical, though, then it's on to the reality of scaling and growing your business. That's really what your custom integration partner should be focusing on. How can we help you to grow your business and make it more self-service for your customers and any vendors you work with—really everyone internally within your company—and how can we establish a path, a roadmap, to progress you through these different optimizations that are natural as you scale? 
 
The point is that you want to be thinking about this with your pricing. It's actually really challenging to reset pricing expectations once you get them going. This is something we want you to be thinking about up front. 

RON: Yeah, totally agree with that. 

Continue to Part 3 to learn about multi-tiered pricing tools.