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The price directly impacts the bottom line of a business. The price charged for a product/ service should offer margin and a significant return on the investment so that the business can stay afloat. Apart from that, prices also reflect the brand’s reputation as it determines how buyers perceive their business. With appropriate pricing a business can position themselves as budget, premium, or in between.
In this era of fierce competition, it is essential for any business to monitor their competitors. Collecting data on the competitors helps in gaining valuable insights on their pricing and marketing strategies and how they meet customer demands successfully. It helps a business in determining appropriate pricing strategy for their products and services which further leads to increased sales and profits.
It is here that competitive price intelligence comes into the picture. Let’s have a detailed look at price intelligence and how it can benefit your business.
What is Competitive Price Intelligence?
Price intelligence, which is also known as competitive price intelligence, is a pricing technique that helps e-commerce stores define their prices based on the real market situation and several parameters set by the e-commerce industry. In this type of method, the prices are set based on the competition and market.
The competitive price intelligence strategy is used in industries where the competition is tough with a large number of rivals. It is ideal for markets where the competition among businesses is based on product’s price. With one brand changing the price of its product, other companies also make changes in their prices to stay competitive.
When you track, monitor, and analyze the competitor and pricing data, it helps in making informed decisions for the business. Competitive price intelligence works on data mining and other automated software.
Competitive Price Intelligence Examples
Every business must be aware of their external environment for operating successfully. Thus, companies in diverse sectors imbibe competitive intelligence in their pricing strategies. Here’s a look at some examples of competitive price intelligence to understand how it works.
1. Startups
As big companies have significant resources, budgets, and required technology, startups need to adapt themselves to the insights from competitive intelligence. It helps them understanding their competitors and offer better solutions. Airbnb is a great example of how to meet the client's needs by using advanced technology and customer insights.
2. Airline Ticket
Yet another example of competitive price intelligence can be seen in the airline industry. They tweak the prices of their tickets almost every day depending on the insights and information they get. If company A increases the prices of tickets on a specific route, the company B will increase their prices too for making price adjustments. For increasing the prices, they take into consideration the users that search for the same flight details many times.
Importance of Competitive Price Intelligence
Pricing intelligence is important as retail pricing is a competitive, fast-paced, and ever-evolving platform. The prices have a direct impact on sales and profitability. Consumers, today, are more price sensitive than ever owing to the ability to compare prices. Buyers can now view their products online or physical stores and see if they can get a better deal from another platform.
The volume of data generated by the retail industry is growing significantly which is being utilized for price optimization. According to studies, the biggest e-commerce leaders change the prices of their popular products up to 12 times a day reacting to the changes in competitor prices within a few minutes. Once you understand what the competitors are doing with the help of price intelligence solutions, it helps in analyzing your own business and taking steps to improve your own pricing strategy. It helps a business serve their customers in a better way. PriceIntelGuru can help you decide how to optimize the best resources on hand in an effective manner.
1. Your secret weapon of insights
Imagine having access to the exact pricing strategies of your competitors – a bird's-eye view into their pricing decisions, discounts, and trends. This is the power of competitive pricing intelligence – an invaluable asset that empowers you to make informed decisions and craft strategies that outmaneuver the competition.
2. Swift and strategic decision making
In a fast-paced business world, swift decision-making is non-negotiable. With real-time insights from competitive pricing intelligence, you're equipped to adjust your pricing strategy on the fly, seize emerging opportunities, and thwart potential threats before they even materialize.
How to Optimize Your Pricing Intelligence Strategy?
1. Identify Competitors
The first step of competitive price intelligence is to determine the direct competitors. If there are a lot of competitors, it is essential to identify at least the top 5. After determining the direct competitors, you must identify the indirect, aspirational, or perceived competitors. When you have an understanding of your competitors, you get to know the competitive environment.
2. Decide a Focus Area
Once you identify the rivals, it’s time to decide the areas where you must focus for data collection. A business must collect as much information as possible from front-line teams and online. Narrow the search circle to process the information efficiently.
3. Gather Information
In this step, you must explore the competitor’s websites, social media pages, products, and content. Collecting detailed information on each of them helps.
4. Conduct Competitive Analysis
In this stage, the collected information is broken down to get insights into the main trends and important data. The information is organized the right way to convey the same to all the teams. It is important to create competitor’s profiles and continue to track the updates such as changes in products/ services, and consumer reviews.
5. Share the Findings
To improve the strategies, share the insights with stakeholders. It can be done via meetings, emails, or internal chat. Storing data on reliable platforms is essential so that teams can get access to it easily.
6. Create Competitive Habits
Competitive price intelligence is not a one-time process, it must be done constantly. It is not sufficient to collect the data once. There is no need to share every piece of information with the sales team. They will spend a significant time processing and analyzing it. Thus, it’s recommended to analyze first how valuable the data points are.
7. Relevant Insights
The timing of the insights plays a crucial role. The team should never experience lack of necessary data. It is essential to have a channel for internal communication for sharing the insights and various updates on the customers and competitors in real-time.
8. Analyze Wins and Losses
Companies often fail to evaluate why they won or lost a particular deal. They depend on accurate feedback from their sales representatives It is more effective to interview the customers and have a look at the notes in CRM.
The automated competitor price intelligence solution is crucial for improving the competitiveness along with understanding the market scenario and identifying the pricing strategy for the rivals. It also helps in improving the positioning among competitors.
Win The Game of Competition with Pricing Intelligence
Competition is a very fast-paced turn of events. Competitive pricing intelligence is the narrative enhancer that propels your brand from the ordinary to the extraordinary. It's not just about information; it's about actionable intelligence that transforms decisions into triumphs. So, your journey to success begins here: book a demo today!