Earlier this year I was a guest at the PROS 2025 Outperform conference in Las Vegas, Nevada. PROS is a well-established price optimization and revenue management software provider that, although well-known within the airline and hospitality industries, has a lower profile outside of these specific verticals. An original premise of PROS was to offer advanced analytics and pricing as well as discount optimization and recommendations for industries such as airlines that are characterized by supply constraints (and in the case of airlines specifically, that were also responding to new discounting and pricing policies initiated after airline deregulation), e.g., you cannot add seats to planes nor beds to a hotel in the short term if demand rises. Over the years this has evolved into advanced, dynamic pricing, with offers based on the traveler or forecasts of likely seat demand by region and route. These evolving capabilities can also benefit industries and enterprises outside of these industries, and it was these broader industry offerings that I covered as part of the conference. PROS also used the Outperform conference proceedings to introduce the new CEO, Jeff Cotten, who is replacing longtime incumbent Andres Reiner who has guided the company since November 2010.
One of these additional offerings from PROS is their configure, price and quote (CPQ) application, which is optionally integrated with their Smart Price Optimization capabilities to offer a more guided selling approach as compared to the classic CPQ process. One of the many challenges facing selling organizations is ensuring deal achievement while also complying with corporate guidelines. Further, that the interaction involved in the back-and-forth results in understanding a customer’s needs and matching an offering to these requirements. PROS CPQ is one of the few applications in the marketplace that offers the ability for prospective customers to engage digitally in the process via a shared microsite, though not to set their own prices! In addition, PROS has integrated their advanced pricing capabilities into the CPQ process, enabling a configurable approach to help guide sellers about discounts, set dynamic approval logic segmented by customer type, account for the propensity to consume at different price points and support concepts of lower limits, or floor prices. And although historically these price analysis and recommendation deployments have been a resource-intensive process, modern technological developments have made this process less of a heavy lift. In essence, PROS is moving towards enabling the typical deal desk or finance review process to only be needed on a limited, exception basis.
The conference was also an opportunity for PROS to both announce the successor to long-term CEO Andres Reiner—Jeff Cotten—and to publicly announce new artificial intelligence (AI) initiatives running on the PROS platform. Like many other applications, PROS is focusing on delivering use cases for AI that fit in with the workflow of the existing application rather than inventing a new class. One of the on-stage, demonstrated use cases was for a salesperson at a winter sports distributor fulfilling a request for skis from a local store. The use case showed how AI can assist sales: in this case, by researching best-selling cross-country skis across several categories and using AI and analytics to understand a good mix of skis across all age groups and skill levels, based on sales history to similar ski retail stores. Another example shown was in the airline industry, where agents constantly monitor demand and adjust demand forecasts based on continuous evaluation of buying signals coming from the market.
Through our research, we assert that by 2027, 2 in 5 enterprises will deploy AI-assisted price optimization applications that integrate with digital commerce and CPQ solutions aiming to
increase per sale revenue or margin.
Another noteworthy aspect of the PROS Outperform conference was the opportunity to engage with customers and to learn more about how they are benefiting from deploying a PROS solution. One that stood out was from Luxembourg-based Cargolux, Europe’s largest all-cargo airline. A PROS user since 2018, Cargolux has deployed PROS CPQ to better manage quotes and reduce exceptions and significant revenue leakage. Through use of concepts such as setting floor pricing limits below which approvals are needed, salespeople are still able to adjust prices to secure deals, but within guardrails established by the enterprise. With over 15 million potential product and service pricing combinations, attempting to manage it in a spreadsheet was not workable and would not have met the targets the company had set for itself in terms of improved quoting productivity and a reduction of revenue leakage through lack of pricing guardrails. In fact, the Cargolux representative informed the audience that the project had resulted in savings of over 12 hours per each salespersons time per week, multimillions saved by automatically including ancillary charges, and an improvement in overall revenue of tens of millions of dollars.
There were additional new features announced in rebate management, with rebate creation and management integrated with CPQ functionality as well tracking of rebate attainment and accruals of projected redemption rates. PROS also announced future functional enhancements to cover the full rebate lifecycle that will extend support to manufacturers, distributors, and customers. PROS also announced a future rebate agent that can help guide rebate offerings through natural language interaction that would result in the optimum choice of rebates depending on the objective to be achieved.
So, with the caveat that PROS might not offer functionality needed by every vertical, many enterprises should be looking at PROS on their short list of providers that offer a comprehensive digital platform designed to optimize pricing and streamline price determination in conjunction with configuring and quoting to customers. Any enterprise that embraces concepts such as digital transformation will recognize that buying and selling have changed a lot over the last 10 to 20 years. One obvious change has been that it is no longer necessary to have in-person conversations for all aspects of a sale. Often this is done remotely and digitally. And although digitalization of early and mid-stage engagement can speed up the overall process, requiring a back-and-forth on configuration and pricing to create a quote and having manual deal desk reviews can add delays to the overall sales process. PROS is moving towards digital quoting and review as well as providing guidance in the configuration and pricing process, which goes a substantial way to help digitize this part of the overall sales and revenue process as well, regardless of whether it is an initial sale, a renewal, or an upsell or expansion.
Regards,
Stephen Hurrell