The perfect pricing strategy drives buyers to buy more, keeps a brand ahead in the competition, and shoots up profits at the same time. Smart businesses have been considering a plethora of factors to design the perfect pricing strategy that hits the sweet spot. Some of the most common factors that drive price are –
- Product cost
- Utility and demand
- Market competition
- The purchasing power of consumers
- Trade margins
- Government and legal regulations
Price Optimization: Decoding the buzzword
Price optimization employs complex algorithms to analyze data pools on cost and inventory from customers, industry trends, and the market to determine the optimal price for a product or service.
The Challenges of Price Optimization
The right pricing is crucial for the success of a business. Unfortunately, throughout economic history, poor pricing has caused the downfall of even the most established brands wing to the lack of good pricing software. From J.C. Penny’s to Segway, brands have failed miserably due to poor pricing strategies. Some of the challenges faced by businesses when it comes to price optimization are –
Complexity – the enormous volumes of data can overwhelm even the smartest human minds. Let alone implementing these multi-layered strategies throughout the business chain.
Crawling – crawling is the procedure used to acquire relevant external data for price optimization. And, crawling has been, by definition, a slow and resource-intensive process.
Matching – finding the right competitor who has the same offerings as your business from the massive pool of business is a mammoth task. Without the perfect competitor, one can never determine the perfect pricing.
Industry trends – the market is evolving every minute with new product launches, new consumers joining the market while old ones leaving. It is a dynamic element that is very hard to keep track of.
The Solution – Machine learning in price optimization
Vistaar harnessed the robust power of machine learning to develop the most intelligent price optimization software that takes care of all the challenges to create pricing models that factor in both the elasticity of the product and its cross-elasticity with related products. It helps can be leveraged to maximize the KPI be it in terms of volume, revenue, or profit.
Our advanced software powered by machine learning employs sophisticated algorithms to find patterns from massive data pools to detect emerging market trends. It integrates new insights continually to detect new demands as well. The resultant predictive models help businesses set the best –
- Initial price
- Retail price
- Discount price
- Promotional price.
The top 5 benefits of Price Optimization –
- Streamlines and automates the entire pricing strategy and eliminates the risks associated with human error.
- The price optimization software is extremely powerful and can bring business insights within minutes after filtering through massive data pools.
- Price optimization software can detect price levels that maximize sales and price thresholds that must not be crossed with unparalleled accuracy.
- It helps businesses stay compliant with the best pricing strategy.
- Price monitoring and reporting become a cakewalk with pricing software on board.
A study conducted by Harvard reveals that a 1% improvement in pricing strategy can boost your profits by 11%. So, make a smart choice today and integrate Vistaar’s price optimization software into your business strategy NOW!