A big part of pricing successfully, is done by taking a look at how consumers view your item parallelly to what you’d like to make from it. However, the consumer opinion is always changing. You have to respond to this changes in advance.
Don’t wait until your finance director reports a decrease in revenue or the head of the sales department notifies you about a sales decrease. Figure out how to optimize your pricing to maximize sales with the right competitive pricing software.
It’s a pricing method where businesses anticipate both market and rival changes prior to when they’re supposed to happen based on competitor data. Then, they restructure parts and implement activities in order to be more ready.
These problems are especially prevalent in businesses where they follow the prices of competitors instead of setting their own. In other words, the changes made are reactive.
Keep in mind that having competitive prices doesn’t entail having the lowest prices, but instead gearing towards making the most of each situation. In order to make this happen while also utilizing a proactive pricing strategy, it’s imperative to become a market leader. A proactive pricer doesn’t only track their competitors, but they also set the rules of the game on the market and the optimal prices by taking into consideration how their rivals act, the area, the brand awareness and the demand.
Answer the questions to see whether or not you’re a proactive pricer.
Think about the answers. Proactive, instead of reactive, is the way to go if you want to maximize profits.
Additionally, don’t be afraid to utilize value-based pricing. Consumers are typically affected by changes in prices that they don’t agree with, but you can use value-based pricing in order to figure out the middle ground in the situation.
Take for instance, airplane seats. You’d think they’re all the same, but in reality, each consumer has their own perceived value of it. Therefore, you have to strive to position your company well so that you are competitive, but at the same time, you want to make sure that you’re making money.
However, let’s take a step back in order to figure out the first step you need to take in order to make money with proactive pricing. You initially need to figure out what exactly your good or service is:
Since airplane tickets are a commodity, let’s take a look at the five steps that drive the proactive pricing strategy.
This is declared from all of the information gathered having tracked crucial parts. Therefore, airlines must analyze all of the rules associated with fares and the execution of flights. Understanding your rivals is important, but so is understanding the consumers, so be sure not to neglect what they would like and what they have to have. Keep in mind that timing is everything.
Airlines must figure out what the optimal price is according to a variety of aspects such as the market, season, promotion, etc. Make the right assumptions about future demand and then attempt to segment it.
Here, a pricer would create a demand model that would be able to make a prediction of how the amount alters in each category based on the alteration in the price of any item.
Make sure that the method used is actually relatable to the opportunity. You also need to figure out what impacts shoppers to make purchases depending on their geographical location. Don’t neglect how holidays affect how they shop and how they prefer to pay.
Therefore, here, the pricer would analyze the demand for every brand and figure out how consumers react to changes in prices. Afterward, the results are put into an optimization model that help figure out the best course to take in order to move forward.
Airline sales and marketing groups must make sure that they’re working in parallel with one another, as well as ensure that fares come out together with advertisements. They need to all be working towards one goal.
Use price management software to understand whether your activities lead towards a revenue increase or if they affect the demand. Also, determine what impact your competitors have on sales and the possible ways to mitigate it.
Although pricing does tend to be one of the most crucial purchasing points, it’s backed up by everything else. So you’ll want to make sure that all bases are covered and working in sync.
Additionally, since today’s online channel is fast-paced and constantly changing, so will your sales opportunities, which is why it’s crucial to utilize tools such as the price monitoring platform offered by Competera. With it, you can have historical and current information readily available to you about both your company and your rivals, thus catering to customers by offering the optimal value in order to make the optimal sales, as well as maximize profits.
Results sent via API, an advanced library of pricing rules, and reports
Tailored pricing programs, testing, and a Guidance hub
Price elasticity calculation, predictive pricing, and prices per segment
using predictive pricing analytics from CompeteraGet Pilot