Xylem prices spare parts and +1 million configurations profitably with Vendavo

The challenge in pricing spare parts is identifying the customer’s perceived value across a vast number of products and configurations. The challenge was to identify key price drivers, build a system using AI/ML pricing techniques, and implement a framework that could support new parts pricing, with easy price maintenance and revisions. They began with prioritizing their spare parts based on profitability and then sought customer feedback. Market surveys were conducted with customers and internal employees to develop perceived value for key parts for 8 countries. 

With Vendavo, Xylem identified three levels of key price drivers that were used to develop Al/ ML pricing techniques. Customer perceived value was considered along with product attributes. They now have the insights and framework that supports new parts pricing, with easy price maintenance and revisions – all tied to Xylem’s value based and market driven pricing strategies. 

They can also quickly calculate configurations and prices that enable the sales team to quickly build bespoke quotes for each of their customers‘ requests.