1. Align Strategy with Business Goals
If your business goal is to be a low-cost provider, be sure your algorithm and criteria align with offering low-cost items by setting price minimums and maximums below your industry’s average price point.
2. Consider All Pricing Factors
Measuring your product’s price elasticity helps you determine how sensitive demand is to price changes. This allows you to set an elastic (sensitive) product price range when setting dynamic price boundaries.
Another factor that should be considered is a product’s change in demand and seasonality. Any change in demand, like a volatile trend in fashion, will require a change in the pricing strategy.
3. Compare competitors’ prices
Get an inside look at which of your products are priced higher, but are still winning the market – this is your price premium. By taking advantage of your price premium, you’re able to continue selling products at a higher price that customers are still willing to pay to maximize your profits.
4. Use Relevant Competitive Data
Reliable competitive intelligence data requires you to start with relevant data. Trustworthy pricing software will ensure products are accurately matched from website to website
5. Test Pricing Strategies
By automating dynamic pricing and using a machine learning algorithm, you are able to completely remove human bias from your retail pricing. Additionally, using software makes it very easy to A/B test pricing strategies to optimize product pricing.
The price issue has always been among the toughest. Most people do pay attention to the numbers on the price tags, that’s why this topics must be taken up seriously. At SapientPro we tray to introduce automated processes an BI to make the business leading easier. Contact us if you need any aid or advice with creating a dynamic pricing strategy that will work for you.