How Incompetitor Can Save You Time Spent On Manually Tracking Competitor Products

Introduction

In the world of ecommerce, there is so much going on that it’s hard to keep track of everything. You should be aware of what your competition offers while catering to the increasingly demanding customers. Often guided by pricing as their primary decision-making criteria, your customers can perform comparisons between your online store and others in an instant. Hence, being aware of your competition’s products and when to adjust your pricing is a vital process for e-commerce business.

In that regard, you have two options:

  1. monitor competitors’ prices manually
  2. monitor through automated competitor tracking software.

If your business is one of the (still) many that opt for manual tracking of its competition, then this post is for you, as well as those that still have doubts about the exploits of modern technology in ecommerce. We’ll show you ways how Intelligence Node’s very own tool can benefit your business in a plethora of ways. Behold the Incompetitor, a majestic wonder of technology, the crown jewel in the tiara of ecommerce, one to rule them all.

incompetitor

Behold – the Incompetitor

Well, not really, we’re exaggerating a bit but it’s a mighty fine tool that is a real lifesaver when it comes to saving time. Here is how.

  1. It can track more than a billion products

The importance of time in ecommerce cannot be underlined enough. This is especially evident when you have to keep an eye one a few competitors and their offerings. Imagine you need to track different competitors’ prices on 100 of your products. Imagine doing that manually. Do you know how many work hours is that? We know – way too much. There are not enough cells in Excel to cover that. Well, there are but you get the point. That method of work is not sustainable nor deemed fit for an aspiring ecommerce store.

On the other hand, Incompetitor uses a proprietary Visibility Algorithm (module) that actually tracks product movements. With high levels of automation, you are able to track more than 1 billion products on the web divided into 1100+ retail categories, thanks to our proprietary data clustering and normalization approach. In essence, what you are doing is letting the software crawl the market for you and give you the most accurate data more than once every day. You can’t really beat tracking millions of products through automated solutions, can you?

  1. Real-time insights

Having real-time knowledge of constant price changes of your competitors is a real blessing today. The market changes in a blink of an eye, practically forcing you to adapt dynamic pricing strategy to adapt to fluctuating conditions. Being updated with any change is critical to stay afloat in the growing ecommerce sea. By using an automated tracking solution like Incompetitor, you are able to see real-time market developments and take specific decisions to benefit from them.

  1. It minimizes data accuracy check-ups

It’s one of life’s unwritten rules – the more you work, the more your chances of making a mistake grow. The principle is applicable to almost every work process ever, especially when it involves large quantities of price data. We love Excel, we really do, but that type of workflow is bound to create an error here and there that can make a significant – negative – impact on your decisions. Checking for errors takes time, particularly when you look at the big picture. Practically as a rule of thumb, track anything manually and you effectively increase the risk of making mistakes. So, why would you choose to do so in the first place?

Not that automated solutions are error-free, but compared to manual labor, they’re light years away. Case in point – opting for a proven competitor price tracking tool like Incompetitor guarantees you 95%+ accuracy levels. Not bad, eh?

  1. It helps with price optimization

Incompetitor can assist in the price optimization process by stripping down the competition to the denominators you choose. A thorough data analysis collects and reveals the competitor price tags so you can strategize how to improve your pricing strategy. Here at Intelligence Node, we like to say – what’s the point in offering discounts when all your competitors have run out of stock? Here’s a more visual look into how Incompetitor rakes up the assists in the price optimization department.

incompetitor rules

Incompetitor – creating custom rules for tracking

In the image above, you can see we have selected a category (Fashion), a store (Zalando), and a brand (Adidas). What Incompetitor does is show the actual price, as well as both minimal and maximal price of the product during its shelf life. On top of that, it shows the status of each product as underpriced, meaning you can optimize your prices to act on that. This is what the Smart Price column is for as it offers an estimation of the optimal price for the product.

Incompetitor works best with our other offering – Inoptimizer, an equally powerful tool that identifies store inefficiencies and thus optimizes prices with dynamic pricing rules through automated price adjustments, whilst also providing forecasts and optimization scenarios for future consideration. On its own, Incompetitor is a handy tool for price optimization assistance, which ultimately helps save time in this fast-paced and changing business environment.

Conclusion

Checking manually all your competitors is a bad decision on so many levels. First and foremost, it can cost you a lot of time and money. While it is true that the majority of the competition tracking process depends on the size of your catalog, a smart pricing analyst knows it cannot keep up with the growing number of competitors, as well as all of the changes in the e-commerce ecosystem by using manual methods of tracking. It’s obsolete and inefficient in the long run, considerably sizing your scope of work to the barely acceptable levels, if so.

Staying competitive on the market means benefiting from an automated competitor price tracking solution like Incompetitor. It provides a far larger, virtually limitless scope of operations with real-time information and top-notch levels of accuracy. Even more, it allows your workforce to concentrate on other important aspects of your business while you sit back, relax and rightfully reap what you’ve sown. You’ve earned it by being smart.

 

Too Cheap, Too Expensive – It’s All About Beating The Competition To It

As every business is unique, there are variances in pricing the products and services in every company. Not all of them incorporate strategies that aim to sell the highest possible amount (or all of it) of what they are selling, just so it could act as an indicator of company’s market performance or success. Rather, the usual approach is setting the pricing to sell the optimal amount of products and services you offer, all the while gaining maximum profit per each sale.
How you use your pricing strategy to determine the price of your goods depends on a number of factors. These include the ever-present competition, the price elasticity of what you are selling and, most importantly, the perception of both your existing and potential customers towards your products and services. This, in turn, affects your sales. It stands to reason that finding the right pricing strategy while retaining satisfactory sales volume might require some trial and error. In this post, we’ll explain how you can avoid some of the hit-and-miss situations and stay one step ahead of your competition.

Pricing smart

As every pricing analyst and expert knows, each product and service has an optimal price range based on what a customer will usually pay. As there are factors such as supply and demand that directly influence it, the pricing strategy will shift accordingly. In that regard, companies often employ two pricing strategies:

  • discount pricing policy or underpricing
  • premium pricing policy or overpricing

Impact of a discount pricing policy – underpricing your goods

While discounting may sound like a tempting idea, especially in times when the going gets tough, it’s important to remember that it can also hurt your business, most notably your cash flow. Decreasing the price of your product means you need to increase your sales volume in order to achieve the same profit. And, as most managers know, that can be quite tricky.

Underpricing is best suited as a short-term solution which can have a long-term impact, manifesting either in increased or decreased profits. Having a discount pricing policy set as a long-term strategy is a risky business and hard to pull off, mainly because there is a very thin margin for profit. In that case, a business needs to develop a continuous stream of large volume sales so its strategy could pay off in the end. Problems with this pricing policy might also suggest there are other issues or weaknesses in your business that force you to lower your prices in the first place, not as a part of an ongoing business strategy.

Impact of a premium pricing policy – overpricing your goods

In contrast, increasing the price of your product could significantly lower your sales volume, albeit retain profit levels. Introducing a premium pricing strategy means you attain a “higher price and margin, lower volume” approach which has all the potential to gloriously backfire. At their core, customers are wired to look around for the cheapest deal in most cases. As much as they care about quality, it seems they care more about their wallet. In the end, you could end up with an overpriced product that could sit on the shelf and collect dust.

What to do?

As the two strategies can have opposing outcomes, it can be difficult to pinpoint what exactly best suits your business. However, there are some things to take into consideration when defining your pricing strategy. Most notably – your competition (the post title kinda gave this away).

In order to stay competitive in the market, you have to find that sweet spot that includes competitive pricing with profit margins. The retail market is highly competitive so you need to consider and try to ascertain three things to compete:

  1. Product differentiation – having a product that stands out in the market would allow you to employ a premium pricing strategy, thus not relying so much on sales volumes as long as you have the competitive edge.
  2. Customer value – the quality of your products and service, as well as the variation in the assortment, can sustain the “higher price, higher margin, lower volume” policy if you can readily meet your customers’ demands and expectations in terms of overall value.
  3. Price – this is the first indicator of your pricing policy and the one that gets the most attention.

Basing your pricing strategy on valuation (pricing research derived from actual sales history) can help you keep your listings aligned with market prices. To do so, your options are restricted to two methods:

  • Manual tracking
  • Automated solutions

When it comes to manual tracking, this is an option that provides nominally cheap(er) assessment of your competitor’s prices. Working in Excel is fine as you can focus on the competitors that matter to you the most on your own pace. However, the pace is the main issue at hand here. Prices are the most obvious form of competitive advantage and they are highly dynamic, thus it’s very easy to miss most of the changes. Time is vital and tracking large amounts of price data by yourself increases the chances of missing some of the data, thus jeopardizing the accuracy of your reports.

On the other hand, competitive intelligence software like Intelligence Node’s Incompetitor (product tracking) and Inoptimizer (price optimization) allows for a deeper focus on product and price data analysis through automation. It saves time and resources and offers analytical insights into market trends. Because the software does the majority of work for you, there is no problem with the scope of your competition tracking (usually, you can track millions of products without any hassle) so you can focus on those that compete both directly and indirectly with you. All in all, you can make more informed and accurate decisions in a timely manner, thus stay ahead of others.

Conclusion

Balancing between not harming the brand by lowering prices too much and not alienating customers with your higher prices can be tough. As some buyers will look for the best deal available, others are willing to pay more for a unique selection and better features and service. Finding that optimal middle ground requires researching your competition. Depending on your needs, that means utilizing either workforce or software to carry out the chore of keeping tabs on others. Be sure to cover all of your competitors with your analysis or you might miss on some of the opportunities and lose the competitive advantage you might have.

 

Is Your Pricing Enabling A Healthy Profit Margin?

When a business sets its pricing policy, it looks to both make and save money while ideally increasing profit margins. This is an ongoing process that demands constant commitment through regular evaluation. Getting the pricing wrong can hurt a business and diminish its profit margins. And we all know that a solid profit margin is an essential part of financial health in the long run.

Profit margin is perhaps the most analyzed number during the company’s lifetime. It is a rather useful pointer that can help a company provide insight about a number of aspects regarding its financial performance, with profit margin fluctuations the ever-present subject of numerous analyses. In broad terms, low profit margins could suggest various problems. For this post, we are sticking with pricing, a very important factor in determining whether a low or high profit margin indicates a profitable business. We will mention different ways how pricing affects your profit margin and is it healthy enough or sustainable.

1. Have a long-term plan

Setting pricing for your goods should be a part of a larger plan, a group of multiple strategies to maximize your profits. A business needs to develop a plan that covers all the little ways of how products get sourced, distributed and sold, all the while monitoring the prices. The main focus is on the level of profitability of every product you sell. Make your items more valuable and competitive but also pay attention to those that may be losing money and turn them around quickly.

2. Avoid same profit margins for different products

What some companies fail to grasp is that price optimization leads to optimized profit. All customers have different perceptions of your goods and they assign different values to those same goods. Every product needs a price that shows the customer’s willingness to purchase it. This is a display of the customer’s perception of the value of your product that ultimately has nothing to do with the profit margin of other product lines.

Take Parker, the motion and control technologies company, as an example. In 2002, a new CEO determined to change the company’s uniform price policy across the entire range of 800,000 products. Understandably, the company was in a profit margin standstill until the change was made to switch to the new pricing scheme. As a result, the company gained over $800 million in profits during the course of seven years by solely focusing on its pricing.

3. Create perceived value with your pricing

A business should always set its pricing so it creates a perceived value for its customers. Perceived value is what essentially delivers purchases by attracting customers. You can see it all the time – people favor some shops because they believe they are getting the best deal around. This may be true most of the time, but even if it is false in reality, the perceived value is what makes them come back.

Naturally, this is all easier said than done, which is why mastering perceived value demands a thorough analysis of large volumes of data to recognize which option is best. Do you lower your prices to appeal to those looking for bargains or do you cater to those willing to pay premium prices because they believe they are getting a product with better quality? As there is plenty of market research involved, creating perceived value is complex, which is why your best bet might be utilizing some form of pricing intelligence software that significantly automates the process.

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4. Don’t use cost-driven pricing

Among businesses, one of the basic calculations of setting the prices for goods is by following a simple formula:

  • the cost of the product + profit margin = price

It makes sense as you want your pricing to take into consideration the overall cost. However, even if you account the cost correctly and set a healthy profit margin, your pricing might still hurt you. Why? Because of the all-important customer perceived value. Understanding the cost part of the equation is important as there are various costs to account for (materials, time, manufacturing and distributing costs, marketing costs and so on) in order to achieve a reliable profit margin.

Still, basing your pricing on costs rather than customer’s perception of value takes away the customer’s willingness to pay as it might not believe the product is worth the price you set. The price is not the only factor that is important to a buyer. Recognizing and understanding how and why customers value your products will allow you to set a price that truly reflects that value and attain a healthy profit margin.

5. Segment your customers

As we mentioned earlier, customers have different requirements so you need to differentiate them into segments. Chances are, your company attracts a wide array of customers with particular demands and reasons. The value proposition for any of your products (or a variation of it) is different in different market segments. Hence, your pricing must reflect that difference. It should include tailoring the product and pricing strategies to specific customer segments if you want to attain the additional value created by these segments.

Conclusion

Pricing is a vital part of doing business, providing a competitive advantage and higher levels of profitability if done right out of the gate. To do that requires diligent work and keeping in mind the five point above. It all starts with a well-rounded agenda that follows the way of maximizing your profits. This includes having different profit margins for different products that have prices that best reflect the customer’s willingness to pay. Creating perceived value ensures you will attract customers and possibly retain them for multiple purchases. It’s not easy to master but with the right tools, it can be done. Avoid pricing your products based solely on costs – it does not reflect the true value of your product and it will turn your customers away. Finally, don’t treat all your customers the same as they ascribe different values to your products. Instead, align your prices with their value perceptions and enjoy increased profits.

If you found this useful and you’d like to learn how to take your pricing strategy to the next level, we invite you to download our free 20 secrets to designing the best pricing strategy eBook. Click below to take advantage of this opportunity.

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Lies and damn lies about pricing data

It’s one thing for a lie to be a simple inaccuracy regarding a specific set of information. It’s a whole another story and a real problem when those lies become common practices. There are some instances where lies and myths about pricing data become a part of company’s culture, so deeply integrated with their business strategy that it hampers any kind of progress regarding optimal pricing.

Given the overall complexity and volume of pricing data, there are many things that constitute a successful evaluation of price optimization. In this post, we’ll explore the top lies and misconceptions that are more often than not associated with pricing data. Hopefully, this will give you a better understanding and help you make more informed decisions, as well as what you can expect in terms of optimized pricing and improved profitability.

The lie: “The market alone dictates the prices”

The truth: While it is true that the market has a direct influence on price ranges, it’s a lie that it alone sets the final price. Pricing managers, accompanying the business’ pricing policy and strategy, have the means and the opportunity to differentiate their products and services and create value for them. Market price doesn’t necessarily mean you have to accommodate to it, rather you need to accommodate your price to your customers. MIT Sloan performed a research a couple of years ago and stated that “pricing power is not destiny, but a learned behavior”, meaning pricing is almost always based on knowledgeable insights, even though competition, costs and price sensitivity within a market have a significant effect.

The lie: “We are in a commodity business”

As a prime example of when a lie or misconception takes a wrong turn, having a firm belief that a company is a commodity business leads to unconditional acceptance of the prevailing prices in the market. Companies needlessly label themselves as price takers, believing higher prices will cause customers to flee. This unnecessary pigeonholing clouds the range of factors that customers actually care about and that justify having premium prices.

The truth: This lie, often named “commodity mindset”, manifests in a shifting strategy that uses competitive price cuts to retain profitability as the prevailing thought is it’s better to sell at discount prices than not at all. Yet, this behavior is slowly lowering profit margin to a minimum and actually harming the business by lowering prices too much or too often. It also means trouble in the long run as your customers expect lower prices each time, all the while the issue of a price increase is practically inconceivable. Instead, focus on the unique selling points of your product, together with the complete service that goes into the process (customer service, delivery, durability, ease of use, etc.) and build your price on that. This ultimately provides incremental value to your product and avoids potential restrictions.

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The lie: “Price changes are too difficult to measure accurately”

The truth: Tracking all the changes in prices, customer behavior, production cost, and sales volume can be an intimidating task, but far from being too difficult or impossible. It’s a part of the process to stay up to date with all the changes in the business environment and all its facets. It takes some time to reach a level of analytical awareness that can produce accurate calculations in order to set optimal pricing. It’s a time-consuming process that can also be very expensive. A possible way to overcome this and optimize profit margins at a product level is to use a pricing software with analytical tools.

The lie: “Every customer is price sensitive”

The truth: The majority of markets have customers whose primary and only concern is the price, but they are not the only type nor the prevailing one in some cases. There are customers who look beyond the price tag and value additional service attributes that, as a whole, form a selling package. This is roughly the same set of parameters we discussed just a few lines before – customer support, delivery options, ease of use and so on. The key here is to recognize through market segmentation which customers, under which situations (also an important factor), care for the overall package and not just the price. That way, you can build your business around that focus group and price them accordingly. This brings us to the next popular lie…

The lie:“Customers deflect with increased pricing”

The truth: As evidenced above, this is not necessarily true. Of course, we are not talking about mindless spiking of prices in order to boost profit margin. That won’t go. When a business adds new features or enhances existing characteristics to your product, it has every right to set higher prices and ask for more money from its customers because its product now has more value.

It is true that you may lose a few customers here and there, it’s the nature of the business. However, apart from that niche group of customers that care about more than just the price, there are also customers who will listen and understand your reasoning if you present it up-front.  Robert Cialdini, author of the book Influence, demonstrates the importance of explaining your actions. Without an explanation for your price increase, your customers will create their own and pull away from the brand. However, if you put an effort to explain why, they will accept the increase easier and will ultimately become the loyal customers who truly understand and value what you offer. For instance, Procter & Gamble was re-launching the Olay brand by testing three prices:

  • $12.99 – sales were good, affordable product to the mass market);
  • $15.99 – sales tanked, not expensive enough to be considered a premium cosmetic for the mass market, too cheap for the prestige shopper to consider it a quality product);
  • $18.99 – sales were great, good value (credible and not too cheap or expensive for both categories

In the end, the company picked the third price of $18.99 and it became a $2.4 billion dollar business with double digit growth and great margins.

The lie: “Having the highest-priced products in the market won’t sell”

The truth: This lie often comes from the buyers themselves who, naturally, look out for their best interest by trying to score the best bargain. They have a good reason to complain about your prices but you should also have a good reason for those prices. Justify your prices by rationalizing how your products and services contrast from the rest and place accent on how your goods deliver value. Once you do that and the customers realize it, you’ll start to create a base of loyal customers who will repeatedly come back.

people don't buy what you do

Image source

People don’t buy what you do, they buy why you do it”. Take Apple as an example. The company has had a rough history in the 90’s but has managed to become one of the tech leaders today. How? 1. by delivering a top-notch product and 2. By creating an entire culture around their brand. They sell some of the most expensive devices but people still buy them, even if it would be more cost-effective to hold onto the older model. The focus should be on selling on value, not on price in order for customers to pay more here than less elsewhere.

Conclusion

As most managers know, it takes a number of factors to accurately gauge correct pricing. In doing so, it helps to strive for product and service differentiation by accounting value all-around for your customers, be it through price alone, on-time delivery, better customer service or something else.

However, there’s a number of misleading assumptions and outright lies that can affect entire pricing structure. This is where your research comes into play. A business should always make decisions based on actionable insights within its own sales data, as well as the competition’s. Proper business analysis can quickly pinpoint the areas where you can improve your profit margin and eliminate the uncertainty and unproven principles that many take for granted. As evidenced in the examples we’ve mentioned above, strategic thinking directly impacts the company’s bottom line. Once you form a pricing policy and strategy, it doesn’t take much to update the data and stay on top of it.  Put your margins in the first place and create value for your products without succumbing to the lies, myths a, d misconceptions.

If you found this useful and you’d like to learn how to take your pricing strategy to the next level, we invite you to download our free 20 secrets to designing the best pricing strategy eBook. Click below to take advantage of this opportunity.

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How to Define a Price Point that Will Push Out Competitors

When launching a business, pricing isn’t necessarily the sole deciding factor in how well your product or service will perform. However, it is certainly a major contributor to your company’s potential for long-term success and not a decision to be taken lightly. More specifically, your price point — that is, the suggested retail price you put in place to win customers — often helps to define your business, what it stands for and the consumers your product attracts. Continue reading “How to Define a Price Point that Will Push Out Competitors”

Setting Retail Prices Right — Everything You Need To Know

One of the daunting tasks being in retail is setting the price and setting it right. Pricing isn’t easy when you’re in the retail scenario—you set the price low and you lose out on profits—you set the price high and you lose out on customers.

It’s completely up to you to decide whether you want to sell a lower volume and charge a higher price or high volumes and lower prices. It’s for you to decide the direction which will enable you to make profits.

However, when you have a range of products to see, you can take the risk of lowering the prices of few products sometimes, as long you can keep the prices of other products marked up higher.

Continue reading “Setting Retail Prices Right — Everything You Need To Know”

10 Ways to Use Bundle Pricing for eCommerce

No matter if you are a novice in the eCommerce game or an expert, there is no doubt you are familiar with the splendors of bundle pricing. From McDonald’s Happy Meal option to a 2-for-1 deal of your favorite shampoo at Walgreens. Businesses around the world use it all the time and customer’s love it.

With the right bundle pricing strategies, you can use this as a marketing tool that can benefit everyone involved. Customers are getting a deal, your store is receiving business, and the consumer may be encouraged to return to this one source for a multitude of needs. In order to fully understand how bundle pricing can achieve all of that, let’s take a deeper look at the advantages that come with it. Continue reading “10 Ways to Use Bundle Pricing for eCommerce”

Pricing Psychology Tricks: How and Why They Work

Pricing psychology is more essential than ever to position your business for success in the marketplace. In fact, its use dates back at least to the late 19th century, as newspapers battled for readership supremacy. Nowadays, consumers are inundated with sales offers at every turn, and while today’s technology makes it easier than ever to reach prospective customers, it also means that your message is more likely to get lost in the shuffle. Yet, the key to distinguishing your product or service from your competitors lies in how well you grasp the conscious and subconscious thought processes that governs the decision-making of your target customer base. Continue reading “Pricing Psychology Tricks: How and Why They Work”

List price, the sales fatigued shopper and misleading deals

Before we dive into the subject, let’s establish what ‘list price’ is just so we are on the same page. In very simple terms, list price or manufacturer’s suggested retail price (MSRP) is the full price for which a business entity is willing to sell its products, without applying any discounts or special offers. While the manufacturing and distribution costs are taken into account for arriving at the list price for consumer goods, it’s the demand vs supply dynamics and level of competition which dictate how much profit margin can be applied.

Continue reading “List price, the sales fatigued shopper and misleading deals”

3 Ways a Pricing Optimization Platform Enables Accurate Pricing Strategy

Price is generally driven by three external factors: the market, demand, and supply. A deep understanding of how these factors impact pricing is critical to developing a pricing strategy that will move units at scale and with a desirable profit margin. Generally, organizations staff teams of analysts to study the market, identify trends, estimate demand, and gauge supply levels. This model, however, comes with substantial costs and risks, especially as it pertains to accuracy and timeliness of strategic pricing initiatives. If you want to avoid the costs of staffing a team to ensure a successful pricing strategy, yet still want to optimize your pricing, consider implementing a price optimization platform instead.

Continue reading “3 Ways a Pricing Optimization Platform Enables Accurate Pricing Strategy”