How Competitive Pricing Analysis Can Boost Your Business Revenue?
Competitive pricing intelligence falls under this bracket, and for the same reasons. It can be an incredibly beneficial tool for product marketers to help increase their customer acquisition and in turn their overall revenue.
In this article, we'll be delving deeper into the competitive pricing intelligence strategy, looking specifically at topics below.
What is competitive pricing intelligence?
Competitive pricing intelligence, or pricing intelligence, is a strategy used by organizations to track the price and performance of competing products on the market to determine how to make informed pricing decisions.
Why is competitive pricing intelligence important in product marketing?
Competitive pricing intelligence is important because the market is constantly evolving, and having the correct or incorrect price has a direct impact on sales and profitability. Customers aren't going to buy more than one similar product if they can help it, so you want to ensure that your product is affordable for the customer, but is also bringing in increased revenue and profit for the organization.
With insights into where their product price sits in comparison to others in the marketplace, organizations can respond quickly with price changes to be more appealing to target consumers, attempt to accrue a wider customer base, and in turn increase revenue.
For example, if an organization discovered that multiple competing products had an increased, prestige pricing point, they could then implement discounts or lower pricing offers that could ultimately draw in more customers and increase their sales and profits despite having a lower product price.
Not only this, but competitive pricing intelligence can help with the alternative issue. An organization could realize when comparing other pricing points that they're underpricing their product. This would then allow for a price increase opportunity, which, of course, would give the organization a better chance to increase their incoming revenue.
How to optimize your pricing intelligence strategy
There are many elements to a strong pricing intelligence strategy that you must look out for when incorporating it into your own product marketing plan. Here are some to look out for.
Identify your competitors
The first step is to identify the competitors you need to benchmark your pricing against. As your competitors will vary and won't necessarily be equal to each other with the importance and influence they have over your business, it's important to establish which competitors should take priority in your competitive pricing intelligence strategy analysis.
Prices change on each platform depending on the overall demand from the platform's customer base, even if it's for the same product or service. So, you'll also need to check which competitors come from which platform/channel that you're marketing on, whether this is online, in-store, or both.
With this knowledge, you'll be able to identify how you need to change your pricing depending on the platform's typical prices, and what your customers are willing to pay for it.
Gather your pricing intelligence data
There are multiple ways in which you can receive this data. One thing that many CI professionals agree on is that relying on public information won't differentiate you from your competitor, so a good strategy is to collect information that isn't publicly available. The next step would then be to analyze this data and identify which pricing strategy would be best for your product or service and implement it.
Challenges with competitive pricing intelligence
There are some challenges to gathering competitive pricing intelligence that you must take into account before you begin. The largest challenge is that some methods are considered unethical, or even illegal. This is something that you must deeply research before you continue with your competitive pricing intelligence.