Everything you need to know about Price Optimisation Softwares
Summary
• 60% of consumers make purchase decisions solely based on the price of a product
• Price optimization software allows you to optimise the price of your product based on market data and customer behaviour
• Optimising the prices of your products based on competitor and market data will help you stay competitive without compromising on margins
• To identify the right Price Optimization Software you should know your competitors and the aspects of the competitor you want to track
According to a study by PwC for 60% of consumers, the price of a product or service is the primary factor that determines whether they choose to buy a product or not. This means that getting the price of your product or service right is crucial for its success or failure in the market and it is all the more so if you’re in the retail industry where the competition is aggressive and customers are super savvy! This is where Price optimization software comes into play.
What is price optimisation software?
Price optimisation software helps you price your product based on market data and customer behaviour so you are able to beat the competition without compromising on your margins.
There are many benefits of adopting a competitive pricing strategy into your business. The tool basically fetches you data on competing products, their prices, promotions, etc. so you can make data-driven pricing decisions that help you stay profitable yet competitive.
Why should you use price optimisation software?
If you are in the retail business, then chances are your products are price sensitive and have high competition. Tracking all your competitors, their products, prices, promotions, and customer experience can be extremely time-consuming and inaccurate if done manually.
Price optimization software has come quite far and leverages the power of the internet and artificial intelligence to fetch data that is beyond just the current price of your competitor's products.
Modern AI-driven price optimization software like Pricechecker fetches competitor data including:
This information not only helps you optimise prices to ensure that the customers choose you over your competitor but also,
How to identify the right price optimisation software for your business?
There are quite a few price analytics, intelligence, and optimization tools out there. A little homework will help you identify the one that will work best for your business in its current state but also accommodate your evolving needs as your business grows.
Define the aspects of price optimization: Price optimization is more than pricing higher or lower than your competitors' current prices. In order to make truly intelligent pricing decisions, you need to know which aspects of your competitors you want to track, analyse, and base your pricing decisions on. You will want to take inputs from your product, marketing, and sales team when deciding the aspects as the data will help them make crucial decisions.
Make a list of the aspects of your competitors that affect the market for your product. This could include the current price, promotions, stock status, price history, stock history, etc.
Identify your competitors: Make a list of your competitors and the products that you want to track. Do you want to track all your competitors or only your direct competitors? How many products on your competitors’ catalogues compete directly with yours? Do you want to track all of them all the time or would it be more effective to segment them?
Having a clear knowledge of your competition can help you identify the software that can accommodate it, understand it, and fetch data that you can filter and analyse based on your pricing strategy.
Know your budget and capability: one thing to watch out for when evaluating any software is the hidden costs involved. This not only includes the recurring cost of the software but also the cost of time, effort, and manpower involved in setting up, maintaining, and using the software.
For instance, if you choose to deploy Pricechecker for your business, you get a dedicated POC and a team that will help you set up and maintain the software while all you have to do is monitor and analyse the data to make business decisions. This means you do not need to have any tech knowledge or skills to deploy and use the software.
Most Price Monitoring Software will charge you based on the number of products, but there might also be onboarding fees, remapping fees (in case your competitor updates a link or launches a new product), etc. Based on these charges, you can arrive at the exact cost you’ll need to budget for if you’re evaluating a price intelligence software for your business.
Price optimisation software will help you provide the best shopping experience for your customers by allowing you to optimise the prices of your products based on competitor prices, promotions, seasons, demand, market trends, etc.
Pricechecker goes one step further to fetch you competitor data like ratings and reviews and stock status giving you an insight into customer perception and demand and supply of the competitor products giving you that extra edge when making pricing decisions. Schedule a chat to find out more about Pricechecker.
