How an International Food Corporation Drove a 2% Margin Improvement with the Conga Platform

Challenge

The corporation had 3 key challenges that were preventing them from keeping up with fluctuating commodity prices and customer demands.

Challenge #1: handling complex industry and real-time market factors in pricing

In edible oils, product cost alone can account for over 700 discrete data points. Additionally, a bottle of edible oil can consist of a blend of up to 10 different types of oil, sourced from different parts of the world before it makes it to the customer. Then there’s the cost of production materials, delivery time, volume, currency exchange rates, and market speculation, which also contribute to pricing.

“Our pricing was ad hoc, with lots of individual spreadsheets and emails,” says the company’s Marketing and Pricing Director. They needed a streamlined process to create real-time quotes that included all commodity price inputs, including forward speculated prices, to quickly deliver accurate pricing recommendations to their customers.

Challenge #2: managing substitute pricing and product choice

For companies like these, maximizing already razor-thin margins means combining the right components from the best and least expensive sources to create a cost-effective, but high-quality, end product. Because the edible oils market is based on consumer demand for high-quality products, they cannot afford to substitute with substandard products simply based on price, so they need a tool that can quickly compare pricing and choose the most optimal substitute from the most high-quality oils from multiple sources.

Challenge #3: legacy system limitations and segmentation

Thousands of account managers used the company’s legacy systems and processes of rummaging through spreadsheets, commodity market data, and past transaction data to estimate the best price for customers in over 125 countries. These methods were slowing them down and causing margin leakage.

Additionally, the legacy systems were not geared for the precise segmentation of products, customer groups, and different industrial factors, providing poor and incomplete data for global analysis and detailed insights. “We could only do about four or five segments, and the application itself was very difficult to use. Measurement and execution on those segments were really tough,” says the company’s Strategic Pricing Manager.

So, having seen Conga work in other parts of the organization, they turned to Conga to drive their pricing and sales transformation with a science-backed approach.

Solution

When the first division of the company first approached Conga in 2014 while looking for a pricing solution, they were facing similar challenges to the edible oils division. Pricing was ad hoc, with lots of individual spreadsheets causing error and efficiencies. People had to search through multiple documents and make guesses at relevant prices for each division of the business.

After the deployment of the Conga Platform in the first division, the international food corporation’s President and Group Leader said “Conga was the right vendor and right partner.” With Conga, the first division alone realized a 5% top-line revenue improvement.

The partnership that started with “a grain of salt” has become one of continuous innovation, enabling the company to use their data in new and smarter ways to outperform and cut through the complexities of doing business in the modern world. As a data-driven company that trades commodities, they know the importance of accuracy and sophisticated modeling, which is why they recognized the value of Conga AI leadership and pricing science innovation.

The power of Conga integration

After the implementation in the first division, the international food corporation decided to expand Conga reach. The company deployed Conga Smart Configure Price Quote (CPQ) and Conga Smart Price Optimization and Management (POM) to the edible oils division to deliver:

• AI-powered pricing optimization for personalized pricing on highly complex products that include real-time commodity futures variables through Conga Smart POM
• Streamlined and automated quoting and pricing processes for their account managers through Conga Smart CPQ
• Embedded analytics on their contracts and comparison analysis against physical delivery that empowers the sales team to quickly make more data-driven decisions
• Product mix analysis to determine the right product at the right time, for the right price
• An integrated CPQ solution within their existing Salesforce CRM

Results

With Conga Platform solutions, the company has realized a 2% margin improvement in its edible oils division—an impressive gain by food industry standards. Partnering with Conga has enabled them to stay on track to meet their goal of gaining additional market share, adapting to changing customer needs, and offering the right products at the right price, to the right customer segments.

Delivering on the call for real-time prices

Today, the company’s account managers create quotes using Conga Smart CPQ from their Salesforce CRM. The Conga Platform calculates over 1,000 pricing benchmarks and more than 150 lookups every time a salesperson produces a quote.

When creating quotes, the solution makes a real-time call for futures pricing from the Thomson Reuters data feed, which is then passed to Conga Smart POM. The Conga Real-Time Pricing Engine (RTPE) also integrates relevant SAP data, including contacts, customers, products, and plants. Lastly, the solution crunches the data and sends pricing recommendations and margin guidance for the quote to Conga Smart CPQ for sales to use.

The entire process happens in an instant, putting incredible power at the fingertips of account managers. No other quoting or pricing provider can consistently deliver this level of support for their global business.