Competitive pricing intelligence is the process that involves strategically choosing the price points for goods and services depending on the competitor pricing in your niche instead of basing them on business cost and profit margins. The strategy is used in businesses that sell the same or similar products in the same market as the prices of these products reach the level of equilibrium.
The price that you set for your products or services can have an impact on other aspects of your business as well such as cash flow, profit margins, expenses, and product position in the market. Hence, it is important to set the prices wisely as it plays a role in business scalability and staying competitive in the industry. Fortunately, you can apply the tried and tested pricing method that many businesses turn to i.e., competitive pricing intelligence.
With the help of competitive pricing tools, you can ensure that the prices will remain market relevant. The shoppers will be less likely to switch to your competitors and more likely to buy from your business. If you are not familiar with competitor monitoring software, then this blog will put some light on the concept of competitive pricing tools as well as its pros and cons.
What Is a Competitive Pricing Strategy?
Pricing plays a crucial role in the decision-making process of consumers. Everybody loves a good deal when they shop. However, it can be challenging to determine the best price for your product/ service whether you run an e-commerce business or a retail store. This is especially true for new business owners as they have to price their products for the first time in the market.
There are three competitive pricing strategies which are as follows:
- Lower price
The prices of the products and services are lower than the competitors in your niche.
- Higher prices
The prices of your goods are higher than that of competitors in the market.
- Equal prices
The price of your goods and services is equal to your competitor’s price or prevailing price in the market with the help of competitor pricing software.
Benefits Of Competitive Pricing Intelligence
When you are equipped with competitive pricing intelligence, it can benefit your business in several ways. Let us go through some of the pros below.
- Increase Traffic
Irrespective of whether you are starting a new business or a veteran in the market for years, it is important to get traffic to your business, both e-commerce and retail stores. Using competitive pricing tools can help in incorporating discounts and tricks like offering a lower price than the competitors, implementing loss leader sales campaigns, and more. All of these help in fetching more consumers and creating leads for increased sales.
Let us elaborate. Competitive pricing intelligence enables you to have a clear picture of the market trends and competitor moves. So, when we say you need a competitor monitoring software, we mean hiring experts who know what they are doing just like WebDataGuru. WebDataGuru is one of the best competitive pricing software providers.
- Efficient Business Operations
It is already proved that when it comes to having better success in business, competitive pricing tools play a major role. Businesses function more efficiently when proper planning is done and the execution of that plan is done effectively. So, when is that possible? Well, the answer is with the help of competitor pricing software. Yes. A company can focus on business operations if its pricing strategy is working well in the competitive market.
Additionally, competitor pricing software performs well if combined with several other pricing tools. And you know where to come for that. WebDataGuru is your place to be for all kinds of pricing tools.
- Combats Market Share Losses
The competitor pricing strategy implemented with the help of competitor monitoring software data helps in not only capturing the competitor data but also analyzing and making necessary changes to the prices quite fast. This helps in making strategic decisions that benefit in the long run and avoid market share losses as you can anticipate price change and also keep a track of margin levels. Competitor pricing software helps in setting prices that are relevant to the market.
- Embracing the Digital
Now, with the ongoing pandemic, every business has realized the significance of digitization all across its operations. And when pricing intelligence comes into the picture, it means that you have all your operations automated most effectively.
Digital operations also aid in the uniformity of your eCommerce channels. The online market can become very brutal when it comes to price. There’s constant change in the pricing of a product and you have to track those changes in real-time. That can be very tedious and time-consuming and not to forget can make you anxious about your business. And that’s where automated pricing intelligence plays its part. 90% of online shoppers go for price comparison and pricing intelligence helps you stay ahead and beat the competition to convert those shoppers toward your brand.
- Improves Profit Margin
Choosing competitive prices for your products and services doesn’t mean you make losses. When you price your goods lower than competitors with the help of a competitive pricing intelligence strategy, you will have the margin to raise the prices while remaining competitive. This will also help in boosting profit margins. It can benefit all the more if your goods have some USP in comparison to the competitors. A business can help in differentiating itself by unveiling product features such as additional accessories, different packaging, and more. This offers some value to the consumers and they are more likely to pay high. Offering your customers, a hassle-free shopping experience is another way of offering them value.
- Deploys Dynamic Pricing Strategy
Implementing a competitive pricing strategy with competitive pricing tools is the first step of deploying the pricing strategy. With the help of competitor monitoring software, the price of goods is adjusted in real-time depending on variables such as raw material cost, inventory levels, market demand, freight cost, seasonality, etc.
The competitor pricing software will offer insight into pricing trends across the same products in your market as well as competitive price fluctuations. The e-commerce channels need to set the right prices as buyers can quickly search and compare similar products before ordering.
Disadvantages Of Competitive Pricing Strategy
Pricing the goods and services with competitive pricing intelligence can have its share of disadvantages. For example, if you use competitive pricing tools and select prices for the goods focusing solely on competitor pricing, it can be challenging for you to cover the manufacturing cost or business overhead expenses.
Also, simply relying on competitor prices for getting insight into the current prevailing market price can be risky as competitors might have priced the goods incorrectly. Establishing a comprehensive competitive pricing strategy with the help of competitor monitoring software can be costly for new businesses. It can be an expensive affair for new businesses to deploy automated competitor pricing software.
How To Implement Competitive Pricing Strategy?
You can start the process of creating a competitive price intelligence strategy with a thorough analysis of the market as well as your competitors. The competitive pricing tools can help with correct insight and data.
During the market analysis, take note of the key players and figure out macro trends to estimate how the industry can evolve in the coming years. There are several tools to help you in the process such as competitor monitoring software.
When you are looking at competitors’ pricing, perform a comprehensive analysis to assess competitors’ core strengths and competencies. You must take note of the competitor’s strategies and business model. Comprehensive market research plays a crucial role in designing a competitive pricing strategy.
You should also make sure to align the pricing your pricing strategies with your business objectives. After evaluating competitors and customers, you can find the best strategy that suits the organization.
In a nutshell, the role of competitor pricing software while designing the pricing strategy for any business can’t be undermined.
Take That Leap with WebDataGuru
We understand that pricing intelligence seems complicated but it’s rather the opposite. But you have to take the help of the experts. And pricing intelligence doesn’t always mean cutting down your prices but strategically utilizing your pricing to get the maximum market share. It is better said than done. Why fret? Contact us today to know more.