SOURCE: Metreo, Inc.

July 26, 2005 08:00 ET

Metreo's Customers Gain $550 Million in Revenues With Smart Pricing Suite

Returns Gained From Metreo's Price Optimization Solution Continue to Exceed Expectations and Gain Top Executive Attention

PALO ALTO, CA -- (MARKET WIRE) -- July 26, 2005 -- Metreo, a leading provider of comprehensive pricing intelligence, optimization and execution solutions, today announced that their customers continue to prove the dramatic business value of pricing solutions. Five Metreo customers recently completed detailed assessments of their pricing performance after a year or more of using the Metreo Smart Pricing Suite -- with two of them incorporating strict Six Sigma guidelines. These leading companies joined a long list of Metreo customers who have achieved financial results far greater than their initial expectations.

Metreo's customers, industry leaders in both manufacturing and distribution, saw gains of 50 to 500 basis points, or 6 to 18 percent improvement in margins in the first year of deployment -- without sacrificing revenues or win rates. One manufacturer experienced a $20 million increase in operating profits. Rather than trading off profits for win rate or revenues, Metreo's solution optimized and balanced all three of these critical business drivers. For example, one manufacturer increased revenues by 14 percent and margins by over 200 basis points, while their win rate grew by 3 percent. Similarly, a major distributor was able to grow revenues by more than 20%, increase margins by 300 basis points and simultaneously increase their win rate by 4 percent.

Many analysts and industry experts further corroborate this dramatic level of financial return. "Price management projects deliver excellent benefits, averaging $3M to $45M, with some projects delivering as much as $200M," said Laura Preslan in the June 29, 2005 AMR Research report. "These projects can raise revenue by 1% to 2%, increase gross margin by 10% to 15%, and increase contribution margin by up to 50%." In fact, the report suggests that pricing project managers actually tone down their projections of project returns: "Even though the benefits are real, if the project manager waves those numbers in front of funding decision makers, the project will sound too good to be true."

These dramatic returns are increasingly capturing the attention of the CEO. Metreo's latest new customers selected Metreo to address corporate initiatives driven by high-level executives. For example, at a major distributor of electrical products, a CFO-led pricing initiative stemmed from a desire to increase company profitability. At a leading cabinet maker, the CIO led a pricing initiative to uncover ways to respond quickly and effectively to their fast-growing pipeline of requests, especially in some areas of the country where growth in home building and home renovation has skyrocketed. This initiative will also help the company uncover the greatest contributors to revenues, profits and margin leakage.

"Our customers understand the impact that pricing mistakes have on their bottom line, and CEOs have taken notice," said Daphne Carmeli, president and CEO of Metreo, Inc. "The results from our price optimization solution are clear and consistent -- our customers are seeing tremendous growth and ROI, through increased revenues, win rates and margin."

About Metreo's Smart Pricing Suite

The Metreo Smart Pricing Suite helps customers identify profit improvement opportunities. The suite enables companies to capture these opportunities by setting prices at the optimal levels and ensuring that those prices are consistently executed in every deal. Metreo's Smart Pricing Suite can be deployed modularly, and provides a complete closed-loop solution, enabling companies to see returns in as little as two to three months. Other components can be added as customers' needs grow.

About Metreo

Metreo is the leading provider of comprehensive pricing intelligence, optimization and execution solutions that demystify and add discipline to the entire pricing process, enabling manufacturers and distributors to drive more profit to the bottom line. Customers include industry leaders such as Eaton Corp., Essex Electric, Hewlett-Packard, Honeywell, Oncology Therapeutics Network and Owens Corning. The company has been growing at a rate of 300% year-over-year for the past two years and was ranked #1 in The San Francisco Business Times' annual list of the Top 100 Fastest Growing Private Companies (2004). They were also named a Rising Star on the 2004 Deloitte Technology Fast 500, a ranking of the 500 fastest growing technology companies in North America. More information is available at http://www.metreo.com/.

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