Price Optimization Engagement Outcome
Improved sales and profitability
Quantzig’s strategic price optimization solutions enabled the client to enhance understanding of the impact of price changes, enabling them to make well-informed, forward-looking pricing decisions.
Identified new growth opportunities
The price optimizations solutions offered empowered the client to identify and capitalize on new areas of opportunity to increase profits.
Improved quote turnaround time
The streamlined approach and advanced analytics solutions helped bring about drastic reductions in the turn-around time.
In today’s competitive and fast-changing business landscape, an optimal pricing strategy needs to be equally dynamic. In such a scenario, using ‘pricing’ as a strategic lever to improve profitability proved to be challenging for a European energy management and building automation systems manufacturer.
The client needed a comprehensive solution to automatically generate a category-specific prices at scale to meet the evolving demands and skilfully tackle the growing complexities of the operating environment. The manufacturer was alos looking at leveraging price optimization and automating price quoting to better match market conditions and customer expectations. Besides, due to the standard manual processes that they followed for price setting, they were able to analyze only a few price points per product category due to which the quote turnaround time was high. Compounding the client’s challenges were frequent swings in raw material costs including copper, iron, and nickel. As such, keeping up with the commodity cost volatility and recovering losses through pricing turned out to be an arduous task.
Quantzig’s pricing analytics experts have designed integrated, predictive analytics methods to help tailor the best-fitting pricing and promotion strategy for your business. Request a FREE Brochure of our analytics solutions to learn more about our price optimization capabilities.
Realizing the issue, the manufacturer set out to address this problem by leveraging advanced price optimization techniques. It was clear that they needed a solution that was responsive to all the complex factors involved in calculating their prices and could identify the areas of opportunity to increase margin. Also, they needed a scalable solution that could help them generate market-aligned, customer and deal-specific prices without compromising on accuracy.
To help the client tackle their challenges, we adopted a comprehensive five-step, price optimization based approach that levearged machine learning techniques and predictive algorithms to generate thousands of price segments and produce market-aligned, differentiated prices for each unique product catgeory.
Quantzig’s suite of pricing analytics solutions is comprehensive. Gain limited-time complimentary access to our analytics platform to learn more about the importance of price optimization in the manufacturing sector.
Step 1: Data Pre-Processing
The initial phase of this price optimization engagement focused on improving data quality and data accessibility. Our experts conducted a comprehensive data audit to analyze data sets and system infrastructure to bridge gaps and identify the required transformations.
Step 2: Price Gap Analysis
The second phase of this price optimization study focused on monitoring and analyzing price gaps in real-time. This helped them gauge the effectiveness of the existing pricing strategies and devise new strategies based on the demand for different product categories.
Step 3: Pricing Model Analysis
The price optimization solution enabled the client to review and interact with price models that predict the P&L impacts of various pricing strategies, allowing them to choose the strategy that best aligns with their business goals for revenue and profit maximization.
Step 4: Pricing Model Development
An exhaustive list of factors potentially affecting the quoted prices was created, allowing our team to develop a framework to explore and validate the source data and synthesize an improved predictive pricing model.
Step 5: Simulation and Implementation
A tree-based machine learning model was developed, and results were compared to the algorithms and data used to build and implement a robust pricing model.
In this success story, the price optimization solutions offered tremendously improved the client’s ability to use price as a strategic lever to meet business goals and empowered them to capitalize on the complexity within their business. Laern more about the benefits of price optimization by getting in touch with an expert.
Quantzig’s price optimization solutions helped the client devise a robust framework to optimize the brand’s pricing strategy by analyzing customer reactions to different price points and price changes. The systematic approach helped unravel new opportunities for improving profits and avoiding price leakages. This resulted in a significant improvement in revenue and profit margins and a measurable reduction in quote turnaround time and authorized price quoting.
About the Client
The client- a leading sports apparel chain based out of Belgium wanted to defend its market share against big-box, price-driven retailers in the region.
The Business Challenge
Growing competitive pressures and ageing inventory don’t just affect traditional retail outlets, online channels are equally susceptible. In such a scenario, optimizing pricing decisions represents one of the largest, multi-million dollar opportunities for organizations to drive incremental revenue. Our pricing analytics solutions empower businesses to make analytics-driven pricing decisions to support their strategic goals. Through our unique combination of advanced analytics, business intelligence, and robust pricing analytics frameworks we help our client to proactively address their challenges.
Though organizations understand the importance of data in making pricing decisions, many have not yet stepped up to the challenge of managing the huge volumes of data needed to get the pricing right. Request a FREE brochure of our analytics solutions to gain in-depth insight into the role of machine learning algorithms in driving better pricing outcomes.
Moreover, in today’s fast-paced business environment developing and implementing a robust pricing analytics framework is imperative. In our recent engagement, we collaborated with a leading sports apparel retailer who was concerned about optimizing prices to drive sales. They were looking at leveraging our pricing analytics solutions to develop a robust framework and better understand the impact of price changes and promotional cadence on the overall sales.
The retailer’s current approach to pricing relied on price forecasts and market trends that did not take into account important variables such as seasonality and promotional cadence. What added to the complexity was the sheer number of segments and brands within these categories and the inclusion of new products at the SKU level. The client was keen on gaining pricing visibility to analyze the cause of lost sales and quantify the price mismatches that led to a decline in sales.
Our pricing analytics experts can help you analyze the role of pricing in driving better business outcomes. Would you like to learn more? Contact our experts right away!
Solution Offered and Value Delivered
To help the client tackle their challenges we adopted a multi-faceted approach that leveraged pricing analytics and focused on integrating the five core pricing competencies- strategy, execution, governance, analytics, and technology. All of which are essential for capturing the full value of a pricing analytics investment.
The first phase of this engagement revolved around interpreting the point of sale (POS) data which was analyzed across four business indicators namely- weekly product prices, markdown dollars, product TDP, and sales volume. This holistic approach to understanding the factors driving sales and pricing helped the client to gain meaningful and actionable insights.
The second phase of this pricing analytics engagement focused on analyzing historic data to gauge the impact of seasonality and promotional sensitivities at the product level, which were later incorporated into the pricing analytics model.
The final phase of this pricing analytics engagement focused on devising and implementing suitable pricing analytics models to improve promotional cadence and pricing sensitivity.
The deployment of a robust pricing analytics framework helped the retailer to achieve over 15% improvement in their pricing and promotion investments while driving sales by 20%. The client also witnessed a 30% reduction in the price compliance effort amounting to a significant OPEX saving.
Why Choose Quantzig as Your Next Pricing Analytics Solutions Provider?
The Business Challenge
In the face of stagnant healthcare budgets, an ever-growing demand for care, advanced pricing analytics techniques have the potential to drive value across the pharma value chain which included companies, payers, patients, and providers in advanced health systems. But to unlock the true potential of pricing analytics techniques, pharma companies must consider the outcome and factors that impact profitability before setting the new launch prices.
To devise an optimal pricing strategy in today’s competitive business scenario, businesses must possess a strong understanding of market dynamism and key value drivers that impact profitability and growth. Without a detailed understanding of such factors, businesses might fail to identify the optimal price for their drugs. Today most pharmaceutical companies struggle when it comes to leveraging pricing analytics techniques to identify the optimal price for their drugs. This, in turn, leads to poor launch performance which might seem quite challenging to overcome especially, in a scenario where sales expectations are higher than ever for new drugs.
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While preparing for the release of a new drug in the US market, a leading pharmaceutical company chose to partner with Quantzig to leverage its pricing analytics solutions to develop a robust pricing strategy. Being an orphan drug and the first indicated treatment for a rare cardiovascular condition the client lacked a basic understanding of the factors that impact pricing. They were looking at exploring the potential of pricing analytics techniques to set optimal prices.
The Solution Offered
We adopted a comprehensive three-pronged approach to help the client tackle the above-mentioned challenges.
The initial phase revolved around conducting in-depth internal and external interviews to understand and analyze the importance of clinical and commercial factors impacting the payers’ decision-making process.
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The second phase of this engagement focused on analyzing and testing the acceptability of different price points and price structures to establish the key psychological thresholds. Also, by testing several pricing analytics techniques, it was possible to evaluate the impact of a price change on the prescribing behavior of physicians and payer restrictions.
The final step in our pricing analytics engagement focused on developing a pricing roadmap to align the obtained insights with the client’s business objectives keeping in mind the future needs of the business.
The pricing analytics solutions also enabled the client to:
- Make strategic and tactical pricing decisions
- Prioritize three pricing analytics techniques to implement during the drug launch
- Identified the optimal price that returned maximum revenue
Schedule a FREE demo to learn how a robust pricing analytics strategy can a differentiator in your market.
Benefits of Pricing Analytics
In today’s competitive business landscape, retailers are looking for new methods to improve their operational efficiency. Retailers struggle to find the right balance between optimizing profits and maintaining traffic. This is where an effective price optimization strategy can help retailers to develop healthy margins and good traffic. However, retail companies tend to struggle when it comes to optimizing their pricing strategies. Challenges such as trying to quickly adapt to new technologies and reprice against behemoths act as an obstruction in devising retail price optimization strategies. In this article, our analytics experts have listed out some of the effective ways to improve price optimization strategy that can help retail companies in better and quick decisions and retain profitable customers.
Quantzig’s pricing analytics solutions help businesses to drive conversions and realize sales opportunities. Request a FREE proposal to gain in-depth insights into our portfolio of pricing analytics solutions.
How to Improve Retail Price Optimization Strategy?
Evaluate Strengths and Weaknesses
To devise effective price optimization strategy, companies in the retail industry must first take into consideration what effect SKU prices will have on operations and evaluate their organization’s strengths and weaknesses. This strategic approach of initially looking into own strengths and weaknesses is important to get a clear picture of which strategies are to be executed. To evaluate one’s strengths and weaknesses, retailers need to collect historical data, including product volumes, prices and promotions, competitors’ prices, economic conditions, product availability, seasonal conditions, and fixed and variable cost details. Such details can help retailers to clearly outline their company’s strengths and weaknesses. Furthermore, this can help companies to drive both value and self-interest. Also, it initiates the wisdom and clarity of how pricing affects all aspects of operations and has a direct correlation to profits and revenues.
Our pricing analytics experts help companies create optimized pricing, promotion and discounting strategies. Get in touch with them right away!
Don’t Just Size Up the Competition
To improve price optimization strategy, retailers still focus more on the competitors’ pricing strategy. But to truly achieve competitive pricing, retailers must assess the bigger picture, not just their competitors’ prices. Using price optimization metrics, retailers don’t just size up the competition, they size up the competition against their strengths and weaknesses. This helps in creating a list of opportunities and threats in the overall market. Also, it offers detailed insight into competitive data and helps to understand how competitive data is going to affect profits and revenue.
To help businesses sustain themselves in a highly competitive marketplace, we track and monitor competitor pricing in real-time through analytics dashboards. Request a FREE demo to know more.
Define Your Pricing Strategy
After evaluating own strengths and weaknesses, businesses can outline the threats and opportunities based on the competition and market. This can help in defining a clear pricing strategy and can assist in understanding how well the perceived value is suited to the needs and wants of each customer. Furthermore, defining pricing strategy can help businesses to achieve revenue goals, marketing objectives, win target audience, improve brand positioning, and product attributes.
Want to learn more tips on improving your price optimization techniques? Request for more information.
Despite recent advancements in technology and decision-support tools, companies in the retail industry are finding that the traditional approaches to devising pricing strategies are not keeping pace. Indeed, the new digital era stemming from pricing analytics and the explosion of omnichannel retailing has meaningfully changed the retail landscape and needs an overhaul of retailers’ pricing strategies and capabilities.
Are you finding it difficult to devise strategic pricing strategies? Our analytics solutions can help. Request a FREE proposal to gain detailed insights into our portfolio of pricing analytics solutions.
Pricing is a crucial driver of growth and neglecting it can affect the profitability of retail businesses remarkably. So, retail companies need to understand and analyze the price point for maximizing profits. This is where pricing analytics can come to the rescue. Companies can get as close to their target as possible, provided they utilize pricing analytics solutions and devise best-suited pricing strategies for their business. In this article, our pricing analytics experts have highlighted a few ways to help retail companies boost profitability, optimize price and discounts, minimize price gaps and benchmark prices against competitor products with the help of pricing analytics solutions.
In a highly competitive retail market driven by digitally empowered customers with paper-thin brand loyalty, and agile online competitors, pricing analytics is the key to stay ahead of the curve.
Tips to Boost Profitability by Leveraging Pricing Analytics Solutions
Analyze and track your competitor’s pricing strategies
Pricing analytics solutions can help companies in the retail industry to monitor and track competitor pricing in real-time. By leveraging pricing analytics solutions, retail players can also make changes to their pricing strategies by comparing it with that of the competitor’s strategy. This can, further, help them to improve customer retention rate and customer responsiveness. With the help of pricing analytics models, retail companies can proactively respond and immediate responses to the competitors’ marketing strategies.
Our analytics experts employ effective price analysis models to identify price triggers and factors affecting the price of your offerings. Get in touch with an analytics expert to know more.
Track price triggering points
With the increasing competition in the retail environment, today it has become crucial for businesses to track the price triggering points and factors affecting the demand of their products and services. Pricing analytics helps retail companies in developing capabilities to understand the factors triggering the price of a product or service and then tweak their pricing strategies accordingly. The analytics experts 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.
To help businesses sustain themselves in a highly competitive marketplace, we track and monitor competitor pricing in real-time through our customized pricing analytics dashboards. Request a FREE demo below to gain better insights.
Understand price elasticity
Pricing analytics solutions can help companies in the retail industry to analyze past transactions and perform price segmentation to identify factors that influence price elasticity. Doing so can help retail companies to calculate the price elasticity for all price segments and select the one that maximizes profit and revenue. Consequently, companies can establish discounting strategies to remain competitive and improve their regional go-to-market strategies as well.
Develop robust pricing modeling capabilities
Disparate data sources, as well as market and category contexts, challenge a company’s analytical maturity. A one-size-fits-all cannot produce analytical rigor. Therefore, retail companies should leverage statistically validated pricing models to gain the desired business outcome. Pricing models can help retail companies to determine price elasticity, cross-price elasticity, and pricing corridors that can influence sales, direct marketing promotions, and other deals.
Wonder how insights derived from pricing analytics solutions can help you make informed decisions? Request for more information now!
Developing a data-driven pricing analytics strategy
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 solution to its best and devise best-suited pricing strategies for their business.
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. (more…)
LONDON: Quantzig, a leading pricing analytics services provider, has announced the release of their new storyboard on pricing analytics solutions and how it can help companies boost their profit margins. With the shrinking product life cycles, customers have become more demanding and sophisticated. One wrong pricing move can cost businesses huge sums in terms of revenues. Moreover, determining demand fluctuations, monitoring competitors pricing in real-time, and identifying pricing triggers are some of the critical challenges that businesses of today face while trying to sustain their profitability.
Strategic pricing analytics solutions can help companies to create optimized pricing, discounting, and promotion strategies. It can also help companies to realize sales opportunities and drive conversions.
By leveraging pricing analytics solutions, companies can minimize price gaps, optimize discounts and prices, and benchmark prices against those of their competitors to maximize both sales and profit margins.
Quantzig’s analytics solutions have helped more than 55 Fortune 500 companies to make data-driven decisions and boost revenues. Below, we have rounded up some of Quantzig’s recent success stories for this week and have also highlighted ways in which strategic pricing analytics solutions have helped businesses to become market leaders.
#1: Realizing profits of over US$ 3 million with pricing analytics: Accurate evaluation of the impact of pricing and promotions decisions is a daunting task. Don’t you agree? One of Quantzig’s clients faced the same problem. They approached Quantzig to leverage its expertise in offering pricing analytics solutions to identify new ways of driving profits. Also, our pricing analytics solutions proved very helpful for the client in unveiling both short and long-term pricing improvement opportunities. Our strategic pricing analytics solutions helped them uncover factors that were driving sales.
#2: Why is snubbing pricing analytics a huge mistake?: Strategic pricing is one of the best ways in which industrial and consumer products companies can maximize their profits. So, ignoring strategic pricing analytics is not at all recommended for business leaders. Recent research shows that pricing analytics solutions and price management initiatives can boost a company’s margins by 2-7%, in a span of 12 months. Companies must, therefore, unlock the full potential of pricing analytics solutions to build a sustainable profit model.
#3: Pricing analytics improved the sales performance by 7%: This is one of the most significant success stories of Quantzig, where the client managed to gain strategic insights into price optimization across the entire product portfolio. This improved the sales performance by 7%. Moreover, price analytics solutions also helped the company to simulate scenarios and estimate how price changes will impact overall profitability and SKUs.
#4: Why does your company need pricing analytics?: With the use of pricing analytics solutions, it becomes easy for any company to save millions of dollars since they help in forecasting and measuring deviations against actual results to keep everything systematic. Also, strategic pricing analytics solutions help companies to closely monitor the market and anticipate the effect of promotional campaigns or price changes. Quantzig’s price analysis solutions offer accurate insights on pricing and help in identifying pricing opportunities by realigning discounts and highlighting unprofitable accounts.
#5: Leveraging predictive pricing models to boost profit margins: Do you really think developing predictive pricing models is a mystery? If yes, then you must go through our latest success story where Quantzig’s predictive pricing models boosted the client’s profit margins significantly. With predictive pricing models, it is easy gaining insights into the actual profitability of the products. Furthermore, pricing analytics solutions are very helpful when it comes to critical decision making by adjusting product portfolio with respect to state or local tax, price, supply chain, and production costs.
#6: Pricing analytics improved sell-through by more than 10%: Sell-through shooting up by 10%? Don’t you think that is significant for any business? Pricing analytics solutions have made it possible for one of Quantzig’s client by providing them assistance in identifying the financial impact of existing markdown practices and mitigate the negative impact on margins. Additionally, pricing analytics solutions proved beneficial in capturing lost margins and reducing the tendency to impulsively offer steep markdowns.
#7: Strategic pricing analytics helped in understanding competitors’ pricing structure: Is your pricing strategy hindering growth? If yes, then you must be going wrong somewhere in analyzing your competitors’ pricing strategy as compared to yours as it is very crucial for any business to attain success. This is evident in Quantzig’s latest success story, where strategic pricing techniques helped the client to gain actionable insights into the pricing techniques of the competitors. Furthermore, pricing analytics solutions paved the way to better segment target customers, boost the efficiency of their networks, and drive profitability.
#8: Pricing analytics solutions aided in profiling potential customer segments: Quantzig’s pricing analytics solutions helped the client to increase their focus on realigning their marketing mix to improve their overall profitability. Additionally, the unique price analysis techniques helped in identifying various ways to robustly position products against the competitors and examine the level of profitability across niche target segments. Furthermore, the effective pricing analytics solutions helped in gaining insights into the internal and external factors affecting the profitability of the industry at a granular level.
#9: Pricing analytics assisted in devising a better pricing structure: Customer profiling might sound scary, but you need not fear if you have strategic pricing analytics solutions in place. A leading firm in the telecom industry was dealing with the same issue but experienced a great change in their pricing structure by leveraging Quantzig’s strategic pricing analytics solutions. These solutions helped them to segment their customers properly and identify price points to devise a better pricing structure. Additionally, it made forecasting customer churn much easier and they were able to channelize marketing efforts in a much better way to improve their ROI.
#10: Pricing analytics solution helped to build a strategic pricing framework: Are you wondering how price points can trick your customers into making a purchase? Pricing analytics solutions can help as it helped one of the Quantzig’s clients. Pricing analytics can assist companies in gaining stock value, making discounts count, and increasing the overall business rating. Also, pricing analytics solutions have the ability to understand fluctuations in commodity prices and shifts in competitors and developing an overarching strategic pricing framework. This framework can furthermore help in identifying the target customers and gaining actionable insights into the products that are aligned with the cultural identity of the customers.
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