Competitive price intelligence is absolutely crucial to being successful in today’s retail market- as part of the “Marketing Mix,” price has always been a top priority for marketing experts and business leaders. Ineffective pricing strategies significantly hinder an organization’s ability to grow and be profitable and can derail success despite having an exceptional product-market fit. It can be argued that price is the most important part of the Marketing Mix- so how can marketing experts and executives ensure they are optimizing their pricing strategy and setting their business up for success in the competitive pricing landscape of 2020 and beyond?
At the dawn of competitive business practices, gathering price intel was much easier than it is today. Merchants could simply stop by their few local competitors and conduct a manual price check. This ensured that their pricing was in-line with their local market competitors’, and all that was left to do was to develop a strategy for creating perceived value to build a competitive advantage. However, technological advancements have changed the way consumers buy and subsequently impacted the way merchants sell in both e-commerce and traditional brick-and-mortar environments. Geographical barriers that once separated markets have been broken down. This evolution makes the need for an evolved comprehensive pricing intelligence strategy inevitable and undeniable- and this post will shed some light on the most pivotal phases of this process.
1. Identify Competitors to Benchmark Against
Keep your friends close and your enemies closer- in the world of retail competition and competitive price monitoring, this is the only overarching motto. Businesses must be completely aware of their competitors’ operations, products, and prices. Understanding at what price competing brands are selling products, even if it isn’t an “apples to apples” comparison, will help you in building out your own pricing strategy.
The first step to a price intelligence program is to identify the competitors you want to benchmark against, along with various intuitive attributes, exact product matches, and close matches, audience response to the product, and then monitor their prices on a regular basis. With automated solutions, you can offer the most competitive deals to your customers, on auto-pilot, with pricing that matches similar and identical products across the globe.
Pick competitors with similar products and audiences, and benchmark yourself against them.
2. Develop Your Strategy for Perceived Value
After identifying the companies that you’ll benchmark against, it is important to determine how your brand’s pricing strategy will create perceived value in the marketplace.
Perceived value is what drives consumers to make purchases- for example, shoppers go to Walmart because they think they’re getting “the best deal in town”. In many cases, this may be true, but even if it is not, without the intent to verify prices, they still come back due to the perceived value.
Building perceived value in pricing can be somewhat complex and requires the analysis of tremendous amounts of data to truly understand which option is best. At the foundation of this process, is the simple question- how will your target market respond? Are they likely to respond better to lower prices (ie. bargain hunters), or are they willing to pay more because they feel they are getting better quality at a higher price? Perceived value is difficult to master, but once you do, you’ll experience tremendous success in sales and profits.
3. Implement a Competitive Pricing Tool to Manage Your Pricing Intel Program
Keeping track of all of your competitors’ pricing can be challenging. This task, coupled with the need to dissect and analyze copious amounts of data to truly understand where your pricing fits and what your perceived value is, and then the development of an appropriate pricing intelligence plan is tedious, time-consuming, and difficult to handle manually.
Thankfully, products like Intelligence Node’s Inoptimizer, with access to 190,000+ Brands and 1,400+ Categories across 29 Languages, put real-time competitor pricing and positioning data right at your fingertips. Not only will a smart pricing intelligence tool allow you to create your strategy quickly and accurately, it ensures that you’re constantly able to access actionable data and trends that allow you to make crucial pricing decisions in real-time.
With a competitive pricing platform, you will be able to monitor your competition in real-time, and implement what you learn in order to give your organization the upper hand. Insights that used to require a team of analysts to create, are now available automatically, accurately, and efficiently- right at your fingertips.