In 2019 one of the key questions for business leaders is how can the pricing lever be used to boost their business growth ambitions? As we are aware even a 1% improvement in price can impact a company’s bottom and shoot profitability significantly. But, the most daunting task is to make sense of dynamic pricing data and unstructured products and services. Most businesses fail to utilize the benefits of pricing analytics and pricing data and tend to take a back seat when it comes to determining the right strategies to enhance their product pricing.
Pricing is the most important driver of growth and neglecting it can affect the profitability of business remarkably. But, companies need to understand what the perfect price point for profit maximization is. And this is where pricing analytics comes into the picture. Companies can get as close to their target as possible, provided they utilize pricing analytics solutions to its best and devise best-suited pricing strategies for their business.
Price optimization and price point analysis may hold the key to success. Get in touch to know more about the benefits of our pricing analytics solutions.
At Quantzig, we understand the impact that pricing analytics can have on your business. And to help companies excel in the competitive landscape, our team of experts has provided a detailed guide on the importance of pricing analytics. This can assist businesses to optimize prices and discounts, minimize price gaps, benchmark prices against competitor products and finally can boost their ROI.
What is Pricing Analytics?
Pricing analytics is the process that allows companies across all industries to improve their profitability and market share significantly by defining pricing strategies, optimal prices and price points. It leverages data to analyze the customers’ buying behavior and decisions. Furthermore, this knowledge is integrated to meet the pricing needs of the company. It is basically aimed at business and customer outcomes, profitability management, trade spend effectiveness and price optimization.
Why is Pricing Analytics Important for Your Business?
It helps in analyzing your customers
With the availability of a cluster of information to customers today, most companies are still not aware unaware of their customers’ behavior. Most companies rely on customer segmentation method, which can certainly help but pricing data goes further, and this is where pricing analytics help. By past price analysis and by analyzing past buying behavior of customers, companies can go a long way in improving the present and the future pricing strategies.
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Identifying pricing opportunities
If you are able to identify pricing opportunities, there is no other better way than this for maximizing profits in a short span of time. Pricing analytics help companies in identifying extra revenue gaining opportunities by fixing the most obvious cases of price leakages or misalignment. This way companies can save millions by realigning the discounts and highlighting unprofitable accounts.
With the advent of pricing analytics tools, it has now become very easy to manage promotions and prices accordingly. However, you should keep in mind that price optimization is not as easy as it looks. By integrating pricing analytics, companies can have a sound pricing strategy, and this can facilitate price optimization.
Pricing decisions are not easy when it comes to taking approvals from stakeholders from the finance, sales, marketing, and production department. However, pricing analytics can make such decisions easier and can change the mindset of the stakeholders and facilitate the approval process.
We understand the challenges companies face in analyzing the feasibility of pricing analytics for their business. Our analytics solutions provide best-in-class frameworks for multi-dimensional data aggregation and use visualization-based data discovery tools for insight generation. Request a free demo for more insights.
Benefits of Pricing Analytics
Benefit 1: It helps in competitor price tracking
By leveraging pricing analytics solutions, companies can monitor and track competitor pricing in real-time. Additionally, they can make changes to their strategy by comparing it with that of the competitor’s strategy. Furthermore, this can enhance market standing and customer responsiveness. Competitor’s price tracking can also help companies to retain their customers and stay ahead in the competition. Pricing analytics helps in solid data collection from the competitors and help companies act with effective and immediate responses towards the competitors.
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Benefit 2: It aids in price triggers tracking
With the changing competitive landscape, today it has become important for businesses to track the price triggering points and pricing analytics helps here significantly. It helps companies in developing capabilities to understand the factors triggering the price of a product or service and then tweak their pricing strategies accordingly. The analysts at Quantzig believe that the best way to track price triggers is by tracking the purchasing paths of the customers which provide clues to what changes in price need to be made.
Benefit 3: It improves price elasticity analysis
One of the cornerstones of pricing strategy is the price elasticity and pricing analytics helps in analyzing price elasticity efficiently by leveraging customer’s purchase and buying behavior data. Furthermore, these solutions can assist companies in the measurement of how the quantity demanded of a good or service will be influenced by the price change.