PROS Holdings, Inc. (PRO) Earnings Call Transcript & Summary

Excellent, alright. Welcome everybody. Thank you for joining us, I'm very excited to be hosting our investor firechat at Outperform today. And with me today, I have some incredible customers on the panel which I will introduce in just a second. We're going to start with the customer panel and then we will follow on with the PROS executive panel so the execs will join us a bit later. Before we get into it, I just want to read a quick forward-looking statement and get that out of the way and then we'll get into some introductions. So please note for our investors and analysts that some of our commentary today will include forward-looking statements including, without limitation, our guidance, our strategy, future business prospects, revenue margin and market opportunities. Actual results can differ materially from our current forecast. For more information, please refer to the risk factors described in our SEC filings. PROS assumes no obligation to update any forward-looking statements to reflect future events or circumstances. As a reminder, during today's meeting we will discuss non-GAAP metrics. These non-GAAP financial measures should be considered an addition to but not as a substitute for our financial information and results prepared in accordance with U.S. GAAP, included in our periodic filings made with the SEC. Alright and now that, that's out of the way, welcome everybody. I'm Belinda Overdeput, I'm PROS Director of Investor Relations and I'm very, very pleased to have with me today four incredible customers that are in the PROS family. We've got Alex Dadakis, Chief Customer and Strategy Officer USG Corporation. We've got Glenn Hollister, Vice President of Sales Strategy and Effectiveness at United Airline. We also have Laurence Scharff, Director of Digital Experience and Transformation at Goodman. And lastly but not least, we've got We also have Lauren Shar, Director of Digital Experience and transformation at Goodman. And lastly but not least, we've got Murrae-Anne Carlson, Senior Director of Pricing Solutions at WESCO.

Thank you, Alex, Glenn, Laurence, Murrae-Anne, for joining us today. I'm so happy that you're here. So we've got a good chunk of time for questions, and I'm going to go ahead and jump right into it. And I'm actually going to start with Glenn. And as I ask each of you the first question, I'll have you give a little intro on background on yourself. So Glenn, let's start with you. Do you mind for our audience, just giving a quick introduction of yourself and your background, what you do for United?

Yes, sure. So again, as Belinda mentioned, I'm the Vice President of Sales Strategy and Effectiveness. And to kind of translate what that means, I'm responsible for everything B2B, that is not a salesperson. So that includes our product design, our marketing, our pricing, our servicing, our systems, our channel programs and all the little bits and pieces that are needed to connect all those things. So that's really my world. I've been doing that for about 2.5 years now. Prior to that, I was a consultant leading a travel practice focused on airlines, hotels and other suppliers in the travel industry.

Excellent. Awesome. Thank you for that. So first, I want to start by saying your session at Outperform 2021 that you presented was aired earlier today, and it was amazing. If our investors and analysts didn't get a chance to check it out, please log into the PROS virtual hub and watch the session later. Glenn goes into detail about what they're doing with PROS and specific to the solution. But in the event that you weren't able to make that session and just to start us off here, Glenn, I was wondering if you could start by describing for the audience, what solution United is actually currently implementing with PROS and why the solution was important to united at this point in time? So in other words, what were the things that drove you to seek out this new technology?

Sure. So we're implementing the PROS Smart CPQ solution. And we did that because we're in a position where we had been using an airline industry-specific solution for contracting for about 20 years. That solution had really failed to keep pace with just not only what was going on the airline industry, but really just modern B2B practices. And we needed to move this solution that will allow us to work in a modern way and to differentiate ourselves from what our competitors do, and that was the driving force behind moving to a new CPQ solution.

Excellent. And just to clarify, you're using this for which area of your business specifically? Because I elaborate a little for our investors because they're not as familiar.

Yes, I forgot this community is probably not that familiar with.

We specifically have not sold them many things. So in the airline world, B2B really refers to the relationship between airlines and corporations.

So in the airline world, B2B really refers to the relationship between airlines and corporations. So United, like our competitors, business travel is a really big part of our overall business and a very important part. And so we establish relationships directly with thousands of corporations in order to encourage them to travel with us. And those relationships generally start with some form of discount or otherwise specialized pricing, but there's a lot of other elements that involved and those elements might include experiential elements. It might include status in our royalty program. There are sometimes prepaid elements. So it's taking what's already a fairly complex field of airline pricing in travel and adding a whole another layer of kind of B2B complexity on top of it.

That's very helpful. I'm sure investors are finally excited to hear what you're doing because we've been very tight-lipped about it. So we're going to come back to you in a little bit to hear more. But next, I want to go to Alex. So Alex, do you mind just as Glenn did, giving us a quick introduction of yourself? And then for those who don't know, what does USG do?

Sure. Thanks, Belinda. I'm Alex Dadakis. I'm the Chief Customer and Chief Strategy Officer at USG Corporation. USG is a manufacturer. We make building materials. We were formerly listed on the New York Stock Exchange since the 1920s, but went private in early 2019. And our products are probably all around you right now, wallboard, ceiling tile, joint compound and a host of flooring materials. We operate 51 manufacturing facilities across North America. And we operate, again, like Glenn said, in a B2B setting. So our customers are the likes of the Home Depot and specialty distribution centers like L&W Supply, Gypsum Management Supply and Foundation Building materials. My role at USG is really twofold. I have responsibility for our overall corporate strategy. And then more recently, I've taken on our customer experience operations. And so that's things like our customer service center, our sales operations, our pricing function and our CRM and sales force.

Awesome. That's helpful. So similar to United, you're also taking advantage of some of our B2B solutions. They're using smart CPQ. You're actually using or planning to use the entire end-to-end platform. I think you've got all the things that you could get. And so I wanted to start with what was especially coming from your role and your perspective, what was the rationale when you decided to start your journey to assess pricing in digital technologies? And what were your key strategic focus areas that ultimately drove you to pros to look for help?

Sure. Similar to what Glenn said, we were fairly antiquated in our pricing methods. In fact, they probably had not changed for the better part of 30 years, things that we're being done in Excel spreadsheets and with e-mail had basically been done the same way for decades. And as we looked towards a new pricing capability, there were things we knew we wanted to get better and faster at. We want to be able to change price faster. We want to be able to look at the full waterfall from how we set an invoice price all the way down to a gross profit. But there's much like the famous Donald Rumsfeld quote, there were things we knew going into it. There were things we didn't quite know where we'd get value from, but believed it was worth exploring. And then there were unknown things that we looked forward to finding out. And so for us, that took the form of really the full suite of products, what we call insights and analytics, governance and control, guidance and then the quoting modules CPQ. And for us, the rationale was really that we have a portfolio of businesses. Many of them would benefit from the likes of insights and guidance. But there are other ones that needed the capability of quoting and the capability of executing a price change faster. If anybody here has followed the building materials industry and products like lumber, you'll certainly have noticed over the past 24 months that supply and demand and overall price dynamics have been incredibly fluid. And so for us, we needed a technology and a solution that would allow us to move quickly and address customer needs, but also give our decision-makers better information to allow them to, quite frankly, make better business decisions. And so we're early in our journey. We just went live with our Insights module actually this weekend. And our engagement with our key stakeholders is quite high. It's the first time that really in a clean interface and dashboard, they've been able to see the end-to-end walk on profitability and have a solution guide them to areas of opportunity. And so we're excited, but we've got miles to go in our journey.

Well, that's awesome. Congrats on your go live, and you actually hit on a subject that we get asked quite often with our with our investor community, which is around some of the macro factors that businesses are facing right now and the supply chain issues and rising commodity prices and kind of this volatility out there. And so I was actually going to turn that question to you to kind of talk a little bit more about how do you feel real-time pricing helps you solve those things? I think you alluded to it a little bit of just being able to be more reactive. But can you expand a little bit on why these solutions are so critical, especially in a time like what we're all experiencing now?

Yes, absolutely. So I think in the past, when you're in moments like this where supply is in high demand, and there are certainly regions of the country that are on full allocation you were operating based on instinct around your opportunity with regard to price and your opportunity with regard to margin expansion. And really where PROS has come in is to be able to apply concepts like artificial intelligence and big data to almost chart out the demand curve, not at a North American or U.S. level, but at more of a micro level and then give that information to your sales leaders to make decisions around pricing and ultimately, customer allocation. And so I think what it's helped us do is really just professionalize our management of supply and demand. And that can take the form of a lot of different things. But for the most part, it's just using data to make better decisions. And that's certainly true of a lot of building materials, but I think, as you alluded to, that's something that with supply chain shortages all across the globe right now, I think we're seeing very broadly in the overall economy.

Yes, definitely. Thank you. I appreciate your perspective on that. And I just want to remind everyone that we do have a Q&A function. So you can write questions in, which I will be pulling from as we go through. So next, I actually want to go to Murrae-Anne. So Murrae-Anne, I guess, same to you. Do you mind just starting off by giving us a quick introduction of your background? And what does WESCO do for our audience that may not be familiar with the company?

Absolutely. Thank you, Belinda, and hello, everyone. My name is Murrae-Anne Carlson. I am the Senior Director of Pricing Solutions at WESCO. For many of you, you probably don't know what WESCO does, WESCO is a global distributor. So not only do we distribute product, a wide array of products, but we are also a provider of value-added solutions for our customer -- customers. We have a very large customer base, over 150,000 customers worldwide. We have over 800 locations. We're in 53 countries, you name it. We're touching on it and definitely offers a wide variety of challenges when it comes to the pricing world.

Nice. All right. That's helpful. I guess my first question for you is a major focus, I have to steal a little bit from Outperform. So major focus have Outperform this year. has been on omnichannel selling. I mean Andres talked about it, our CEO and his keynote and how businesses really need to start thinking about meeting buyers where they are. Anixter and WESCO have been a customer of PROS for quite some time. And I want to understand what is WESCO's omnichannel strategy? Like how do you think about omnichannel? And how is PROS supporting you in this area?

Sure. I think that's a large question, and I'll attack it from my point of view. Certainly, as I mentioned, we're a global distributor with a lot of customers. And with each of those customers comes a unique set of needs and expectations. And one of those largest expectations is being able to provide an omnichannel experience. Our customers transact with us in a multitude of ways. So regardless of the platform, the device, the channel, really, the key goal of omnichannel is my perspective is to be able to continue to provide our customers with a seamless customer experience. And hopefully, by providing that, we got better customer engagement and loyalty. But what I've learned certainly in my journey with WESCO and Anixter is omnichannel is not a single solution. And we've had to adapt to that to be able to take a combination of existing as well as new technologies and build up an ecosystem that works for our business. And at WESCO, one of those technologies is PROS. So we realized that an important aspect of that customer experience is pricing. And WESCO's integrated PROS into their ecosystem to solve for some of those pricing challenges that we face. For example, being able to provide customer item or geography-specific recommendations on the flag. On other challenges where PROS' solution helps us in that journey is managing our pricing rules, right, accuracy, consistency is critical for our business. And as a result, it allows our salespeople to focus and focus their expertise on more of that value-priced solutions, and takes away the manual effort of being able to provide pricing on millions of SKUs every day, all day long.

Right. Right. That's very helpful to hear your perspective. And I always think we talk about a lot of these things. But hearing from the customers who are actually living and breathing this is incredibly insightful for our audience. So thank you. Laurence, I want to go to you next, and then we'll kind of go around the horn again. So really happy to have you here. I guess, same thing for you. Can you give us just a little bit of background on yourself and what you do for Goodman and what Goodman does?

Sure. Well, last is certainly least with this distinguished group. So I'll try not to embarrass myself. But -- so I'm Laurence Scharff, I'm the Director of Digital Experience for Goodman and for those that are looking up Goodman. So we are Goodman, a manufacturing LP, we're a subset of Daikin Industries and that's DIL on the . And we are -- Daikin is one of the world's leaders of manufacturing of heating ventilation air conditioning equipment, and Goodman is one of our brands in the U.S., including Amana and the Daikin brand. So my job really, and I've been doing heat and air conditioning for a while, but my job is to figure out really 2 things: one, how to make an easy button for heating and air conditioning contractors buying through wholesalers, including ourselves. And my second job is to figure out how to go from this traditional kitchen table selling technique face-to-face between contractors and homeowners to millennials and you can't sit there we go. Millennials who are reaching their age, buying their first heating and conditioning system, and they're going to buy it, try to buy it on their phone. And so an engineered system purchased through a phone at least communicating through a phone as part of our challenge and what we're looking forward to trying to solve. So that's kind of what I do.

Excellent. And perfect segue into my first question for you because I think we talk a lot with our investors and analysts about what the challenges that we help businesses solve from an e-commerce perspective. And I think the #1 thing that may be a little bit hard to understand or kind of visualize is when we hear e-commerce, just given what we all do on a daily basis, we think of like Amazon, and we think of the retail experiences that we have or even airlines that buying your flights online. But when you think about buying an HVAC system, and e-commerce may not be the first thing that comes to mind. And so as a manufacturer, can you lay out kind of what have you done from an e-commerce perspective to date? And why is digital selling? I mean you kind of alluded to it with the buyers that are coming up now are millennials who are kind of expecting this experience. But like why is this so important to Goodman especially at this time?

Well, the consumer is one challenge to look at. And what we're focused in right now with our e-commerce and why we're partnering with PROS on the solution is the dealer, the heat and air contractor that you call when you don't have heat or you don't have cooling. And we have a phenomenon that we have an aging contractor base. So for example, every 3 people that leave only 1 person comes in. So we have a time problem. Contractors are having to be the -- what's the old the butcher, the baker and the candlestick maker. And they don't have time. And the other thing is that they have to deal with multiple brands with multiple combinations, changing regulations, and it's hard to memorize 7,000 SKUs especially when you've got multiple problems to solve. So what we thought with e-commerce was create time. If we have information and pricing and everything they could possibly want as far as inventory and technical specs, that's great. That creates time. The other thing that we wanted to do was increase the amount of hours in the day for our branches. And so by, you can imagine in the summer when we're super busy, so many calls are, what's my price? And do you have it? What's my price? And do you have it? If we could just solve for that, we create a lot of time. So that really was our goal. What we missed was configuration. And that led us to look in the market for solutions. And we can talk about that later, but that's where PROS came in, and we're really excited about what we've done, and that's part of the easy button to configure something where on Amazon, I know that I'm looking for a coffee cup that has a funny picture on it, okay? I'm looking for this particular book. Sometimes, our folks don't know exactly what they're looking for and they have to configure it. And sometimes is a lot.

Right. And so this is just also to kind of further on that point. This is where you're really leveraging the, what we call the guided selling technology from a PRO standpoint where, as a user, I'm getting asked questions, but I know the answer to that are ultimately going to drive the product recommendation because I don't know exactly what I need when I come in. That's what you're using?

Yes. I mean all the acronyms are out there, CPQ and . When I heard assisted buying, I went that is what..

I want that. Excellent. Appreciate that. All right. So I've got a couple of questions in from the audience. And I think maybe Alex and Glenn your perspectives on these as well. But when you're looking -- when you were looking to buy this technology. And so maybe, Alex, let's go to you and then we can go to Glenn. And if so, if you're comfortable, why did you pick PROS or what were the qualities that we had that maybe that they didn't that ultimately led to your decision?

Sure. Yes. We did run a full RFP. We actually spoke with 8 different vendors, had 3 go through a very formal thorough prototype and proof-of-concept testing. and then ultimately down selected to 2 finalists that we negotiate with and selected PROS. And what I would tell you is there's a lot of interfaces and a lot of technology that can help you visualize data. I think Laurence touched on it best, though, understanding your organization and what your organization needs was really why we went with PROS. We just felt like their team had the best sense of where we were as an org and what our challenges were and then met us halfway in that journey. And we have the greatest degree of confidence that not only would we get value out of the technology, the actual implementation and rollout would be with the lowest risk profile. And so with these things, a lot of times, you run the risk of leading a horse to water. But ultimately, your end stakeholder, whether it's a business P&L leader or a sales leader has to want the technology. And we saw just the greatest buy-in from our team when working with the PROS team. And so that was really what pushed it into the PROS column for us.

That's awesome to hear. It makes me very proud of our team. Glenn, I guess same question to you, what drove you to PROS -- to pick PROS?

Yes, sure. So in some ways, a similar process to what Alex described but maybe what a few differences, right? The first is that we're the first airline we're aware of who's actually moving a CPQ solution for our passenger sales. There's 1 or 2 that have used CPQ on the cargo side, but no one to our knowledge has used it for the core of the business, which is passenger. And so we -- because we're a first mover on that, we had to be really deliberate because the way we price, and our products are quite different than many other industries, right? So our product is basically going from one airport to another. And if you think about we can do connections and we can put people on partner airlines, we have several hundred thousand products. And each of those products has several thousand price points. right? So it's a really complex business to begin with. So we needed a solution that could really handle that. And then on top of the overlay of all the typical B2B stuff of discounts and rebates and add-ons and services and all of that, right? So we did -- before we went into RFP, we spend a lot of time looking at all the vendors out there. We invited all the big ones that you would think of plus a number of smaller ones. I think we start off with probably about 10 or 11And just through kind of our due diligence process with a little bit down to 3, and then we did an RFP. And what really became clear out of that with PROS, I think it was 3 things. The first was the solution's ability to handle the scale and complexity of what we wanted to do. Not all the solutions could handle that volume of data and calculation. The second was just PROS' ability to implement, right? And our confidence that when they said, hey, it's going to take this long, it's going to take this many people, it's going to take this many dollars. We just have a much higher degree of confidence in those estimates coming from PROS than we did from the other vendors. And then last, that was a little bit icing on the cake, but very nice to have was the fact that PROS is really familiar with our business from other parts of their product portfolio. So all that together was made PROS kind of the real clear of choice.

That's awesome to hear. And I guess, Laurence, the question is for the entire panel. So Murrae-Anne I'll come to you next, and I also kind of want your perspective on just the partnership that as you've experienced it over the course of the relationship. But Laurence, to you first, can you -- same question, can you talk about what are the factors that -- did you assess other vendors? And what are the factors that ultimately drove you to choose PROS?

Well, we have a little bit different path. We are great at making heating and air conditioning boxes. And we distribute those across the country very well. And our -- sometimes we think IT is e-mail. So we partnered with a multinational company for an integration with our ERP. And over 1.5 years period, it was a very successful launch and partnership. And they actually recommended PROS to us. And we had a lot of calls and valuations of, this is kind of custom, can you guys handle that? And the answer was, yes, we can. And we did do some vetting, but there was reputation. There was a lot of things that we could reference not only with our own due diligence, but with our implementation partner and led us -- we didn't do an RFP that led us to -- because we had the -- clock was ticking, and we needed to do something, and it worked out great.

Right. Right. Yes. So just to kind of further on one of your points that you made. So Goodman actually came to us through one of our partnerships with one of the big SIs. And so that to Laurence's point, that's how we got introduced so definitely love that story and making that connection. And then I guess, Murrae-Anne, so from your perspective, I really want to hear as a long-standing customer of PROS, you've been with Anixter for the last however many years and that we've been partnering together, I think it's like 7 or 8 years that Anixter has been a customer. And then last year, WESCO and Anixter actually merged. And so you've been going through kind of expansion, but I guess, pre-merger, can you talk about -- and I guess now to do 2 as well, can you talk about the benefits that you've received from the PROS solution. What have you seen today? What has been the impact that it's had on your business? And then as a second question, how has expanding the solution to accommodate WESCO, how has that gone?

Sure. Yes, there's quite a bit there. So yes, I'm not going to give up how long I've been with the company. But we have definitely -- Anixter started a partnership with PROS back 6 or 7 years ago. And actually, that is when I moved out of a finance role into pricing. So it was my first exposure to pricing. And following that, there was the merger between Anixter and WESCO and over the last year and PROS has since become a partner with our extended family. But I think one of the first things to say is I kind of started in this world of implementing PROS into our business brand new. I didn't know what to expect. But certainly PROS was a tremendous partner in helping guide our organization as we were going through that. We really leaned heavily on PROS to get us over that initial hurdle. But since then, we continue to partner with PROS, and we've -- we went from an on-premise solution to a cloud solution. We further expanded to incorporate WESCO. But really where the benefit is, and I'll kind of touch on this is both companies, we're talking about 2 very large companies that kind of got married, but they had very similar challenges in that historically, they had seen sequential margin decline. It really was one quarter after the next. We just kept seeing a decline. And as a result, the companies both became hyper focused on margin improvement. And I'm very proud to say that WESCO, Anixter has been successful in reversing that margin trend. And one of the contributing factors is our partnership with PROS. So, I think, Alex touched on it earlier. Our industry certainly has been faced with rising material costs, transportation costs, constrained supply, throwing a global pandemic, why don't you -- the need for technology that's dynamic and flexible is certainly like it's critical for businesses in today's day and age. And having PROS be part of our technology ecosystem. That solution has allowed us to continue to be flexible. We can alter our strategies. As those broader macroeconomic conditions change around us, we can adjust our strategies and how we go to business along with those changes. So that's what I would say in terms of how we've seen the implementation of PROS impacting us. In terms of your second question, though, with the merger. Not only did we double the size of our company, but you can imagine, our transactional volume just exploded, right? We're trying to price millions and millions of items for both of these companies. And with that, there's definitely additional complexity that comes into our solution. But what I will say is that the solution has proven it can scale. So we do have dynamic pricing guidance, we have control. We also have real-time pricing engine. And we've been able to configure a solution for the combined company maintaining performance, seeing very little impact to our performance and being able to continue to price real time. But it is complex. It's not easy. But once the solution is enabled, I will say the ability to plug into that solution is straightforward. And so as our company grows and as our business changes, being able to be flexible with that has been a great investment for us.

Wow, that's awesome. We're so proud of that partnership and I'm glad to hear just all the success that you've had with the solution. So thank you, Murrae-Anne. I want to come back to Alex. Maybe your perspective, because I know when we spoke, we talked a lot about digital selling maturity in the manufacturing space. And I think you have a -- we've got Goodman here as well. They're leaning into e-commerce and digital selling. And I just wanted to kind of understand what's your perspective on digital solid maturity within the manufacturing space and the opportunity that you believe we have to accelerate adoption of digital selling solutions within this industry?

Yes, sure. I think there was an article by McKinsey or said by McKinsey a few years back that said construction was probably the least productive industry in the world since World War II in terms of the gains we've seen. And so what you have seen in terms of on the job site, our concept of how we price and sell hasn't evolved that much either. And one of the things about it is, there are always a few products that get a ton of attention, high-velocity items that everybody will pay attention to from a Board level, from an executive level. But there's a long tail of things that don't get attention put on them. And so when I think about manufacturing and I think about businesses like Goodman or USG. There is so much opportunity on the things that just don't get the same level of insight and focus that a technology like PROS guidance and some of the modules can provide you a very simple and clean way of highlighting opportunity. You didn't even have time to see previously. And when I think about in an industry like ours, the simple effort of getting ready to implement and install PROS also creates value. It's like any time you pick up a rock, you're going to see some stuff underneath there that hasn't had the light shined on it in a while, and you're going to find some value. And so for us, we're very early in our journey, but I think that there's a lot of other manufacturers out there who have the same supply and demand challenges and have the same real core business practices that would benefit from a technology like this. And so I think there's a lot of more runway to come with regard to manufacturing or B2B enterprises finding value in something or someone like PROs.

Awesome. Loved to hear your perspective on that. One of the questions that we have that all of our investors have for Glenn. I think they're curious to know -- we talked about this journey you're on right now with helping to streamline corporate sales for United with our CPQ solution, our B2B platform. But investors want to understand, do you see opportunity to take advantage of additional PROS solutions in the future? Do you see opportunity to expand the relationship with PROS? And I know I'm putting you on the spot here with that question. So again, I've read my forward-looking statement disclaimer, but I really want to hear your perspective on how the partnership is going? And again, do you see that opportunity?

Yes, sure. I think there's probably a number of areas we're thinking about. One that has been talked about a lot here is kind of the e-commerce aspect. So the way it works today with United and really almost every other airline is, if you want any kind of real B2B relationship, there is a salesperson involved in that. And if we want to and we do want to extend our reach beyond the several thousand companies that we deal with face-to-face, we need to enable that online. So much like it would be great to buy a furnace online as we bought one in the last week. Our -- a lot of our customers would like to set up their B2B services with their airline online as well or at least partially online. So that's definitely an area that we're thinking about. And then there are a number of niche areas that we haven't touched on yet. So everything we've done so far is really focused on business travel and our work with corporations. But there are a lot of other businesses we work with. So cruise lines and tour operators and leisure travel agencies and online travel agencies. And those are all future areas that we could certainly improve as well.

Excellent. Thank you, definitely love hearing that. I guess I'll ask -- this is more of a generic question that came in from the audience for the panel. And so I want to kind of talk through when you're assessing -- and I know, for example, United, it's -- you're pretty early in your journey, I think, you're just going live around this time. USG and Goodman are in active implementation. Obviously, Anixter has been live for quite some time. And Murrae-Anne has talked about what they've seen from a margin trend. But what are some of the other ROI metrics that you're tracking and that you expect to improve with usage of the PROS solution? So maybe Laurence, if you wouldn't mind, I'd like to pass that question to you first.

Yes. So it's pretty simple. The business case for e-commerce was the average ticket size. And we found that the average ticket size from a face-to-face order to an e-commerce order is significantly higher. And that's with a lot of voice of the customer commentary that it's still really hard to build a system on your website. And we know exactly what we want. We just don't know what your SKUs are. And so that's a lot, here comes PROS to the rescue. So that's a key metric for us now is what is the average cost per ticket now when PROS is implemented? Is it -- do we expect and hope that it goes up, yes. So that will be the key metric because we based a lot of the ROI on the investment for e-commerce on average cost per order. And then that just kind of cascades into a lot of other sticky factors, the more share of wallet that you have with a customer, that's great. The more your customer uses your e-commerce platform and uses your equipment that builds in that loyalty that we're looking for. But the key metric is that average size or cost per ticket. And we think PROS will increase that over what e-commerce has already increased.

Alright, helpful. Alex, I'll turn to you next for the same question.

Sure.We had a few hard metrics and then a few soft ones in our ROI analysis. The first for us, we took a margin lens and we knew we have an existing amount of what we call, either low margin or negative margin transactions. And so we can track that by product, by customer and ultimately compare pre and post go live, the trend on that. And our control group is that as we roll this out, we have some customers in parts of the country using PROS and some not. And so we'll have a period of time that we get to see kind of a group using the technology in a group without it. The other area that I think is just what I would call, good pricing hygiene is in all the relationships between kind of your vanilla SKU or your vanilla product and then the variation of that that has some higher value-add to it. And so for us, that could be odd sized lengths or edge details or colors that you can just simply inforce adherence to an add-on, a price add-on or standardize that and make sure that when you take pricing up on your base item, you also correspondingly take price up on all the value-added items. And so you would think that when you get to be a scale organization, those things are pretty well-oiled machines, but you'd be surprised how sometimes when you're under the gun and you're moving quickly, those areas get a little bit loose. And so we've got a few key KPIs that we'll track to make sure that we get the expected margin lift in a few areas. But like I mentioned earlier, there's also some softer areas that we're looking forward to. We believe that we'll be able to actually get price publications out to the customers faster today that those might come in a week after we go live with the new price or a couple of days after, we ought to be able to get those to the customer well in advance of price increases and getting to a decision as an organization quicker. Many times, we meet and we have a bit of a paralysis or consensus driven culture and the decision rights within PROS really force you to make a decision and give you the data you need to make a good decision in a more efficient manner. And so it's a bit of a combination, but that's quite frankly, how we're thinking about it.

Excellent. And then I think, Glenn, you shared a little bit about what you're looking to improve, but do you have any kind of KPIs or ROI metrics that you're thinking of as you look at the PROS solution?

Yes, there's a number. And kind of like Alex, there's some that are more quantitative and some that are less, right? So some of the quantitative ones we're looking at are really our responsiveness to customers. And the current process in the industry, doing an RFP is at the bare minimum a couple of months, and it's not unusual that drags on to half a year or a year. We want to dramatically shrink that time and just be much more responsive to our customers. And part of what was along with that, right, it is empowering our salespeople. We're in a situation now because the process is so complex that our salespeople have to come to my team, I have a pricing team that builds every deal. And it's a bit of a black box for our salespeople. It's even more of a black box to our customers. And so one of the things we're looking for PROS to do is really return a lot of that decision-making authority to our salespeople so that they can be a higher touch and really react to what the customer needs. So those are some of the ones we have some metrics around. One of the ones we don't really have metrics from but is incredibly important is the ability to sell everything we have. Because the existing process was built over 20 years ago, it really is only built around the basic fare that you pay when you buy an airline ticket. And if you've flown much recently, you probably know we saw a lot of other things, right, whether that's a bag or an economy plus seat with extra legroom or Wi-Fi or other things, right? Like we have all these new things we sell and we couldn't build any of them into our B2B deals. And so that's a really important area for us is to bring all of what we sell as an airline, including things like cargo or charters, things like that as well into the complete picture of what we can build into a deal with the customer.

Excellent. And then I guess, Murrae-Anne, I don't want to leave you out. I know we talked about the margin trend. But are there any kind of other key metrics that you look at from a pricing perspective that you're assessing for the PROS solution as kind of a measure of success?

Yes. I think as the other panelists all mentioned. None of them are unique to each of their businesses. I think share a lot in common there. Certainly, we're all looking at our individual metrics where they make sense. I don't think one metric suits all parts of the business and understanding that and really kind of finding out what that key metric is within the part of business that you're trying to change because it doesn't have to be the same. But the results of that could be margin improvement. So that's our focus is really segmenting our business and understanding what's the underlying cause and how we can reverse the trends where needed or add value where we're -- potentially we're not adding value.

Makes sense. And I think just from your perspective, given our long-standing partnership, what does the change management or adoption kind of process been like for Anixter, WESCO? Is there anything that you can share kind of with our audience? And I guess these other customers are kind of in it right now of how that went or any kind of things that you saw or noticed that were helpful or good?

Sure. I'll just say, it's hard. It doesn't matter the size of the organization. It's hard to change people's minds. But it can be done. But I think the key here is realizing it is a critical part of your success, making sure that you do have a thorough change management plan in place. By being adaptive. You might have to change course along the way, and that's okay, and be patient. It takes time. It does. And even today, where I said, there's still a whole big chunk of people whose minds we need to change or help guide them through some of this change. But as long as it's a continued effort and that there's focus and dedication around it, it is definitely achievable. So that's my advice here is just keep going. Don't be afraid to try it.