AI-powered quote pricing

Background and challenge: process without intelligence

Heidelberg Materials is one of the world’s largest integrated manufacturers of building materials and solutions, with leading market positions in cement, aggregates and ready-mixed concrete.

Employing a global workforce of more than 51,000 people at almost 3,000 sites in over 50 countries, Heidelberg Materials prides itself on high quality products that stand out from the competition. But in such a competitive space, it needed to be able to differentiate further — primarily by providing customers with faster, more consistent quotations.

The team had a robust process for issuing customers with a quotation already in place, using SAP throughout the global business. But when it came to knowing exactly what information was required to determine the quote price across all customers and jobs, it was more of an art, rather than an art balanced with science. From various spreadsheets, to the sales manager’s years of knowledge, the company lacked consistency and visibility of how it quotes prices to customers.

Heidelberg Materials also had no insight into whether sales teams were excessively discounting or pricing themselves towards a missed sale. And even if the team did have the necessary information, it wasn’t being used to enhance future decision making. Unlike smaller, independent competitors, it made them slower at providing customers with quotes — resulting in missed sales and negatively impacting margin.

The results

Optimized margin

By automating AI-powered quote pricing through Peak and UiPath, Heidelberg Materials has enhanced processes to increase efficiency, optimize margin and improve conversion rates, in addition to saving time through a reduction of manual tasks.

Increased confidence

Initially, the roll out consisted of 50% of inquiries being handled by Peak, and the remaining 50% via the existing process. After positive results from this testing period, Heidelberg Materials is now working towards all inquiries going through this new AI-powered approach.

Improvement in conversion rates

The team has subsequently seen an improvement in conversion rates of 2%, attributed to both the accuracy of pricing — getting the price closer to where it needs to be the first time — as well as having a quicker process, which creates a frictionless experience for customers.

10,000+ hours saved annually

With less time spent on manual tasks and rifling through spreadsheets, Heidelberg Materials will save over 10,000 hours annually, allowing its sales team to instead spend on providing specialist support to customers. Where it used to take up to eight hours to return a quote, it now takes under an hour.

How it works

Previously, a customer inquiry would come in via phone call or email and be loaded into SAP by the sales office. The sales manager would be notified of the inquiry and price up the contract, getting the quote approved before sending it over to the customer.

Customer inquiries still arrive and are entered into SAP in the same way. But now, UiPath robots rapidly compile data sets from various sources and pass that data to Peak in real-time. Peak’s Pricing AI then simulates conversion likelihood for thousands of prices and creates an optimal pricing band for the contract, typically optimizing for margin.

Where time-sensitive materials are involved, as is often the case with aggregates, the sales manager can choose to optimize volume over margin, minimizing waste and protecting revenue.

Peak also provides the sales manager with comparable won and lost opportunities and their quoted prices, which has been crucial for the sales managers to gain confidence and trust in Peak’s recommendations.

This combination has enabled Heidelberg Materials to achieve margin gains by enabling its workforce to sell more, at a higher price point, whilst giving the sellers more time to sell.