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Product Profitability Analysis: 3 Cornerstones to Developing Successful Product Pricing Strategies

Aug 16, 2019

As the business challenges and competitive pressures faced by organizations continue to intensify, there is a growing need to analyze factors that impact profitability and growth. We believe that this understanding can turn out to be a significant differentiator, regardless of the industry in which you operate. Whether your primary business objective revolves around improving profitability through cost-cutting or growth, product profitability analytics can provide the much-needed insights for driving that agenda forward.

The product profitability analytics methodologies and solutions proposed by our analytics experts can help companies define profitability at the product, service, and customer levels. Our product profitability analysis solutions help businesses to make effective decisions on pricing, sales, and its associated processes by offering granular insights on their net margins. It also enables businesses to identify customers that adversely impact the net margin and raises a red flag if churn among the firm’s most profitable customer segments is a major contributor to the declining profit margins.

How Can Product Profitability Analysis Help your Company?

Our innovative analytics solutions combined with domain expertise and operational excellence help our clients differentiate themselves from their competitors. It also offers in-depth insights that help them:

  • Re-evaluate their business model, gaining strategic insights for succeeding in an uncertain and volatile business environment
  • Gain greater transparency around the business’s cost agenda, discouraging counterproductive and siloed thinking
  • Fine-tune their product offerings by revamping the product pricing strategies based on customer buying patterns
  • Respond with greater agility to environmental and business paradigm shifts

Our product profitability analysis solutions help companies create optimized pricing, promotion, and discounting strategies. Get in touch with us right away.

Three Cornerstone to Devising Better Product Pricing Strategies

Product profitability analytics is not a one-time initiative, it an on-going approach that aims to improve product pricing strategies and drive growth. Product profitability analysis is built on three cornerstones that can enable businesses to make better product pricing decisions by leveraging analytics.

  • Price Transparency: Transparency in pricing is crucial while making decisions related to product pricing. It empowers businesses to identify how pricing impacts sales by helping them trace back to the process, customer, or product using transaction statistics.
  • Process Efficiency: This is another important factor that impacts profitability by enabling business leaders to keep track of resource consumption.
  • Pricing Models: The pricing models adopted by businesses play a huge role in improving profitability by driving sales and revenue.

Product Profitability Analysis Methodology

To devise robust processes based on product profitability analysis, focusing on the above-mentioned factors is of utmost importance from a business perspective. The existing top-down analytical approaches do not support a single version of the truth. In contrast, a bottom-up product profitability analysis methodology offers in-depth insights to gain a clear understanding of the associated cost factors. The cost transparency achieved through our product profitability analysis methodology helps generate buy-in for driving efficiencies in processes, changing resource allocations, and selling a different mix of products and services to critical customer segments.

Ready to Harness Game-Changing Insights?

Request a free solution pilot to know how we can help you derive intelligent, actionable insights from complex, unstructured data with minimum effort to drive competitive readiness, market excellence, and success.

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