Gaining an advantage over your competition can be tricky for businesses. However, there is a way to stay on top and it is by using pricing intelligence. Regardless of size, there are far too many factors to consider when trying to stay on top. Even if a company assumes it is unstoppable, it can never predict when a new competitor will jump in and rise above the ranks due to its advanced services or cheaper prices.
While there are a variety of ways to ensure your company avoids becoming obsolete, for the purpose of this article, we will explore how you can take advantage of pricing intelligence. Simply put, pricing intelligence dictates analyzing the pricing data between you and your competitors as well as ensuring your customers are getting the best prices for their products. Throughout this article, we will discuss what pricing intelligence is, some strategies to enforce it, any risks and challenges, and most importantly, how you can use mobile proxies as a tool to guarantee the best strategy.
What is Pricing Intelligence?
Pricing intelligence is the process of monitoring and analyzing the prices of your competitors against your own. This is done mainly to either gain or maintain a competitive advantage and guarantee customer retention while also aiming for conversions from competitors.
Pricing intelligence provides pricing suggestions that could enhance your business. Customers know they have many options when it comes to buying a certain product and when they compare them against each other, they would need to ensure the quality of the product is high while also ensuring that they are getting the best value for their money.
It is a data-driven approach to analyze the market dynamics and competitive prices to make informed decisions regarding pricing. It involves studying customer demand through crawling and web scraping, competitor price monitoring, and dynamic pricing. It also allows businesses to stay informed about their competitors by providing product matching, price change alerts, and suggesting price values which in turn helps businesses maximize profitability.
With the right pricing intelligence strategy, companies can optimize their pricing strategy, identify new revenue opportunities, differentiate their product, improve in-store experiences, boost conversions, and implement value-based pricing.
Benefits of Pricing Intelligence
Pricing intelligence holds a wide range of advantages to a company if it wishes to pursue it. These include improving sales and increasing profits, comparing prices, analyzing the impact of promotions, and making informed decisions.
Improving Sales and Increasing Profits
When doing pricing intelligence, you are positively impacting your sales. Setting the best prices will gain more attention from your organization and increase both your sales rates and your profits. Once you are conscious and aware of how your competition’s prices are, you can set a price that equally brings more customers to you while maintaining a stable profit.
Compare Prices
One of the main positives of pricing intelligence is being able to compare your prices against your competitors. According to a 2019 study, price is the most important factor in consumer behavior. By using pricing intelligence strategies, you will find solutions for what the pricing data offers you. You would be able to decide on pricing while keeping profit, market demand, and product demand in mind so that when you decide on a custom price, it will be appealing to your customers. This will come in handy when any prospective customers compare the prices between you and your competitor and find you as the better choice.
Analyze Impact of Promotions
If a company is considering hosting a discount for a product, it will affect its profit margins. Pricing intelligence will compare competitor’s prices and deals and compare them to yours. This will help when analyzing where the discounted price stands when compared to competitors and alter the price depending on theirs.
Informed Decision Making
With pricing intelligence, the guesswork of trying to figure out if a price adjustment will be beneficial will be thrown out the window. You will be able to get valuable and accurate data that will confirm if the decision you make would be the correct one that will ultimately help your company or one that would lead to difficult roads ahead.
Pricing Intelligence Strategies
This section will cover some pricing intelligence strategies you could follow that would almost guarantee high success rates. By following these words of advice, you should find great success with your pricing intelligence models.
- Identify and Track the Competition
For starters, you must identify who your competition is. While it is easy to target the massive corporations that are within your niche, there are pricing strategies that they are able to implement that you might be unable to do due to budgets. As such, you would be better off investigating companies that are within your range until you have gained enough momentum that you become equal to the biggest competition. You could track the competition by keeping a close eye on how your competitors are setting their prices according to the market. This gives you an outlook on how to create a better pricing solution for your organization.
- Stay Ahead of Trends
With the market constantly fluctuating, it is best to ensure the right price is being placed in relation to the market trends. By staying updated and informed of the changes, your pricing intelligence strategy will become stronger.
- Research Customer Reviews
Another strong avenue to explore is to look into what customers are saying about your competitor’s prices. It could be as simple as checking Glassdoor or Google reviews, but there is value in exploring platforms that are a bit more obscure. This will increase the pool of reviews you have to work with and could discover a platform that your competitor is unaware its customers are posting on.
- Competitive Elasticity
Unfortunately, you will not be the only one conducting pricing intelligence strategies within your niche. Your competitors could be tackling their own strategy and using your prices to determine their own. As such, you must be aware of your competitor’s prices and set a price of your own that keeps you competitive.
- Rules-Based Pricing
Another strategy to consider is providing extra benefits in cases where a competitor lowers their prices too much for you to compete. For example, if you are an electronics company, you could offer a free mouse with the purchase of a computer. This would ensure that any potential customer would consider your offer which would be slightly higher but come with a “free” gift.
- Psychological Pricing
One of the oldest tricks in the book, physiological pricing is the practice of pricing an object as a number that appears lower but in the long run does not make much of a difference. Instead of pricing an item at $200, you could easily price it at $199.99. While this may not seem that drastic of a change, the mind of the consumer will determine it to be the “lower price” and be more attracted to that offer.
- Utilize an Antidetect Browser
A great tool you can use to assist you with pricing intelligence is an antidetect browser. This type of browser acts as a layer to further hide your identity. Most anti-detect browsers offer ways to change your digital fingerprint, which, when used with a proxy, can help you see competitors’ websites from different locations and with different hardware. This would make the chances of being detected by an anti-bot system plummet to zero, given the proper installation and configurations are made. Additionally, to ensure an antidetect browser is working to its full potential, you could pair it with mobile proxies. Mobile proxies can hide a user’s real mobile IP address and keep them hidden from websites and competitors.
Why Use Mobile Proxies for Pricing Intelligence?
The main goal of a proxy server is to alter a user’s IP address which makes it more difficult to have a user’s address detected, blocked, and ultimately banned. Mobile proxies specifically, offer the added benefit of mimicking the behavior of a real mobile user. Mobile proxies, as compared to their residential and datacenter counterparts, leverage mobile network technology to add an additional layer of anonymity alongside offering geo-hopping capabilities.
Whenever a new competitor enters a field, customers would be less obligated to change from their preferred choice unless the price is enticing enough to have them consider it. If a company is considering expanding its market to a new country, checking how national competitors price a similar product will allow them to figure out a comfortable range to price its products. Having access to competitors’ mobile-only content allows for more robust pricing information.
There are many technologies to use in combination with antidetect browsers and proxies, like CAPTCHA solvers, to help automate the process of accumulating pricing intelligence.
Risks and Challenges Associated with Pricing Intelligence
While there are many benefits to pricing intelligence, there are some challenges that could arise with implementing it. It is not a guaranteed practice to follow as there are factors that make pricing intelligence difficult to implement. On top of the possible fact that your competitors have been using pricing intelligence for their own benefit for years, here are a few more points to keep in mind before launching a pricing intelligence strategy.
Customer Perception
One of the biggest challenges with tackling pricing intelligence is how customers perceive the changes. In the end, they will be the ones affected by the prices you decide to change and alter. It is nearly impossible to please everyone with any changes made. However, with a smart strategy, you could gain the trust of your customers and keep them coming back to you.
A constantly fluctuating pricing model could lead customers to feel as if they are being taken advantage of. While customers can accept some slight alterations in prices, if the price is constantly moving up and down within a short period of time, they may not see this change in a positive light and give up on your organization entirely, opting to go to a competitor who might be changing the prices in a similar manner but in an amount of time that does not become obvious or clear.
Complexity of Pricing
To determine the best price point possible, you would need to have a deep understanding of market dynamics, consumer behavior, and economic factors. Anyone could scrape pricing data online but it takes true skill and understanding to know what to do with the data once it is collected. Analyzing that much data could seem useless unless you know exactly what to do with the information that has been handed to you. Similarly, there are many other factors that determine price such as supply chain fluctuations and changes in consumer demand.
Being able to understand all these different fields and building a strategy that keeps them in mind could be the determining factor between your organization existing in the next ten years or vanishing in the next ten months.
Technological Understanding
Pricing Intelligence relies heavily on a great understanding of technology and coding. We have mentioned web scraping quite a few times throughout this article. The practice of scraping might seem straightforward but it requires an understanding of how to implement it to get the exact data points you would need without having to scrape the entire website and remove unnecessary points afterward. Luckily, we have written a few articles regarding how to get started with web scraping which should help you out in the long run.
Data-Driven Plans
The best way to ensure a pricing intelligence strategy is working is to trust the data you receive. The entire reason to even perform pricing intelligence plans is to avoid guesswork and assumption and wait for the results to come through. If you wish to start exploring pricing intelligence, you must be willing to adapt your plans depending on the data collected.
Trial and Error
You would not have a perfect pricing intelligence strategy on the first try. In fact, to get the best strategy, you must be willing to go through trial and error with a few different plans before you find the one that works for you. Each company is different and the way their customers respond to changes can differ even within the same niche. Start by exploring different options and possibilities and alter the plan depending on success and failure rates. Eventually, you will discover a strategy that works perfectly for you.
Conclusion
Pricing intelligence is a great way to ensure that your prices are the best that they can be. By exploring how your competitors base their prices and how often they change depending on the seasons or discounts, you can plan out a strategy that ensures customer satisfaction is high. This would similarly lead more customers to your products as long as you can offer prices and quality that match their needs. Pricing intelligence is also a fantastic way to explore international markets and evaluate any worth involved with expanding your organization over to a new country.
While the strategies provided will be of great help to you, it is valuable to keep in mind that using a mobile proxy will enhance your efforts tenfold. By using a mobile proxy from a trusted proxy provider, your activities will remain hidden from your competitors, giving you the freedom to scrape pricing information from their website as well as third-party e-commerce sites without the risk of being blocked. By using the strategies suggested in this article paired with a mobile proxy, your pricing intelligence strategy has a higher chance of succeeding leading to company growth and profits.
