The Ultimate Guide to Pricing Intelligence
“The moment you make a mistake in pricing, you're eating into your reputation or your profits.” - Katharine Paine
For any business to be successful in the years to come, their focus on pricing matters. The market will keep fluctuating and technology will keep growing but what needs to remain intact is how a business is focusing on the very pricing factor that occurs.
Pricing is crucial infact many businesses believe that it is more than just a number. "Pricing is the exchange rate you put on all the tangible and intangible aspects of your business. Value for cash." - Patrick Campbell
See it in this way, when you set a price for the solution you are selling, you need to understand that you cannot set a low or a high number. The reason being if you set the price too low, your product will come across as being cheap and if you set the price too high, your product would be looked upon as too expensive.
The main agenda here is to fix a price that matches the right factors such as describes the value your product holds, fits the market conditions and much more. This is exactly why your brand needs to consider incorporating ‘Pricing Intelligence’ practices to always stay up your game of catering the exact needs of your leads at all times.
What do you mean by Pricing Intelligence?
Pricing intelligence refers to analyzing, monitoring and keeping a track of the pricing data so that a business can easily fixate on the right pricing figures to sell better to its prospects.
Pricing intelligence helps to provide pricing solutions that can help to enhance your business. For instance, with pricing intelligence tactics, you will be able to set a price for your prospects which indirectly illustrates the value your product holds. Your prospects understand that there are multiple similar products like yours in the market and so when they compare your solution to the rest, they need to be convinced that your solution holds better value and is worth an investment.
This is exactly what pricing intelligence aims to deliver.
Why does Pricing Intelligence matter?
1. Improves sales
With pricing intelligence, you are indirectly impacting your sales numbers. When you are setting the right prices, it will garner more attention towards your solution and hence make an impact on your selling rate.
2. Receive better profits
When the pricing data is being monitored well, the greatest thing about it is that you can set a price where you are confident that you will be receiving some good profits in return. This can help you to sell better while growing your business higher at the same time.
3. Increase in customer satisfaction
Your leads will only invest in your solution when they identify and realize that your solution caters to their needs, meets their budget factors and is receiving a good number of benefits with the solution you are selling to them. "Pricing is actually pretty simple...Customers will not pay literally a penny more than the true value of the product." - Ron Johnson. Always ensure that for your prospects it’s all about value and if your pricing offers just that, you don’t have to worry about customer satisfaction.
4. Get more views on product searches
When your prospects decide to purchase a solution they will not see just one product, they will analyze and compare multiple products to make one decision. Hence it is important that you set your price in such a way that when your prospects search for your solution it appears in front of them.
As mentioned earlier, pricing intelligence matters on pricing data and such data isn’t easily available because of the restrictions of the online world. So, how can a brand like yours capture such significant data to grow your business better?
5. Helps to compare prices
Your prospects are not going to land on your page and without any acknowledgment or consideration invest in your solution. Today’s prospects know what they need and exactly how much they need to pay to purchase their needs. The great thing about price intelligence strategies are it lets you frame solutions on the basis of what the pricing data offers you. When you decide on pricing you would consider all the factors such as your profit, market demand, the demand of the product and much more, so when the price is out you will be able to offer your prospects a realistic figure.
So when your prospects start to compare your solution with the competitors, it will be easy for them to make the right decision. When they realize that your solution is realistic and carers to their needs completely, they will without a doubt invest in your brand.
6. Showcases value of your selling solution
Another reason how pricing intelligence affects e-commerce sales is it helps to showcase a product’s value under the right light. For instance, if as mentioned above you sell a product for a very low rate or a higher rate, prospects are going to consider it either too cheap or too expensive hence, setting the right price is necessary. When you conduct pricing intelligence, you are able to set a price which when a prospect analyses, showcases the value the product holds.
As a brand when you are confident that the product you are selling is the right fit for your prospects, then setting the ideal price is exactly what the pricing intelligence process aims to deliver.
7. Fulfills business KPIs
Another reason is to match the set KPIs for any business. For your e-commerce sales to grow you need to completely accomplish what your KPIs are in the first place. For instance, your KPIs could include a set conversion rate, profit or selling rate and when you are able to accomplish all this you are able to indirectly hit a higher sales number for your business.
Pricing intelligence here provides you data that matters and using that data while you frame the ideal price for your solution you are also framing the realistic KPIs accordingly.
8. Differentiates you from the competition
As mentioned earlier, using pricing intelligence is a great way to distinguish your brand from the competition. When your brand stands out, more prospects will be drawn towards you hence impacting your e-commerce sales much better. Using pricing intelligence here is a smart decision because it doesn't let you quote a random price, it lets you sell your solution in a price which highlights the two main things, value, and quality and this is exactly what will push your e-commerce business to succeed better.
How web scraping can capture pricing data to conduct pricing intelligence tactics?
Web scraping is the process of extracting any information online, be it any source of information or a website. The greatest thing about web scraping is that for pricing intelligence it can help a business like yours in many ways. One is the fact that you can scrape through any information related to pricing such as your competitors without any hassle.
To conduct web scraping all you need to do is click on the website your competitors are in, select the information you want to scrape which in this case is pricing, use the web scraping code and the information starts to scrape and will be saved in your system in the format you would like to view it in such as CSV file and more.
As you are aware that pricing data keeps changing which means that conducting web scraping would take place on a more regular basis hence there could be chances where your action can be blocked due to a high dosage of suspicious activities. Capturing pricing data is necessary which is why you need to conduct such action with reliable support.
How proxy services can enhance your pricing intelligence activities?
Proxy services stand between a user and the information they want to access. For instance, say if you want to access your competitors pricing data and use web scraping to capture the information when you conduct this action using proxy services chances are there will be no risk of your business appearing as a suspicious activity as proxy services ensure that this process is being conducted without any need of your identity to be revealed.
So no matter how many times your web scrape the pricing data, you will always be secured. Using proxy services is necessary when it comes to conducting such an action which is why your brand needs to understand which proxies would be ideal for such a technique to be continued.
How to choose the best proxies for pricing intelligence?
1. Data Center proxies
Data center proxies are widely used to serve the purpose of brand protection conducting market research, pricing intelligence, SEO monitoring and much more. Data center proxies work as a regular proxy, they hide the IP address so that your anonymity is hidden while surfing the internet. What makes them stand out is that they don’t require the need for an ISP (Internet service provider) or an internet connection. When you request to view a website instead of your information, data center proxies will send theirs.
- Cheaper in cost
- Provides faster speed in its action
- Doesn’t hold a reliable position when it comes to securing anonymity
2. Residential proxies
Aims to retrieve data without the fear of being blocked when conducting online data retrieval activities. Whether it is information on pricing intelligence, get any data you want without having the fear of your IP address being subjected to high risk. Residential proxies have IP addresses attached to a physical location. The IP address is provided to users from the ISP itself. When you access information from any location, your ISP will give you an IP address.
- It is a brilliant measure for data harvesting
- Offers high anonymity
- Only if the residential proxies are of good quality will the chances of not getting blocked while conducting online activities will stand secure. So a risk will always be there.
3. Web Scraping
Web scraping is the process of extracting information online through the method of scraping. Say you want to scrape through your competitor's website, you can conduct this action without any hassle. With web scraping all you need to do is click on the website to scrape, conduct the process and the data gets saved in your system. The data can be saved in any format for instance in a CSV file, Excel, JSON and much more. Web scraping, however, is more efficient when it is conducted with the help of any proxy services. While the scraping happens, proxy services ensure that the action is being conducted.
- Eliminates the manual work of copy-pasting information into the system
- Retrieves data quicker
- Regular scraping can cause the IP to be blocked
- With the rise in technology, websites are incorporating advanced methods making it difficult to scrape the information.
4. Real-time crawler
Search any sorts of information you want from search engines and e-commerce websites with the help of a real-time crawler. When you send a request to the real-time crawler, it collects all the information required according to your request. Once the information is collected it sends you back the information in a format of an HTML or JSON. All the action taking place is conducted on the same connection being implemented which gives you real-time web scraping solutions.
- With a large IP choice and an exceptional IP backup option, the real-time crawler can deliver a 100% success rate in its data retrieval activities.
- It is a user-friendly application that just requires a URL to get started
- Requires constant modifications due to frequent website changes with reference to its design or structural form.
5. Premium proxies
Premium proxies are great to retrieve information online because it offers a dedicated proxy for a user. With premium proxies, any brand can conduct online activities without the fear of being blocked or their IP addresses being caught as suspicious. Premium proxies offer great speed and have a lot of advantages added to it for instance information can be viewed from any geo locations available, multiple IP addresses are provided, the data and bandwidth speed is great and much more.
- Speed will never be tapered since the IP addresses provided are dedicated to the users
- The servers are maintained from trusted brands which assure no crash or shutdown errors.
- Proxies have a cache system which saves the information. This can cause security issues as anyone can view it.
Since you are now aware that how you can conduct the pricing intelligence practices with the above reliable support, are you aware that conducting pricing intelligence practices can also affect your business sales better?
Try the below tactics to witnessing the difference
How to conduct price intelligence to increase sales?
1. Track the competition
One way to conduct pricing intelligence is to get relevant data and that can help you improvise your current pricing. By just monitoring and keeping an eye on the market wouldn’t be enough you need to frame the right pricing by conducting more actions and one such is keeping a closer eye on how exactly your competitors are going to set their price according to the market. When you are able to do that, it becomes easy to compare and create a better pricing solution.
2. Research other platforms
While you are keeping a close eye on the market, also try conducting your research on platforms that share the market information in the form of opinions, feedback, and recommendations. This action can help you understand the market better and help you undergo a successful pricing intelligence process much more enhanced and in a better way. Pricing is crucial and just monitoring may not be enough, increase your actions to learn more about the market in places where it speaks more about it.
3. Choose the right price intelligence strategies
Another way to conduct pricing intelligence strategies is to implement the pricing intelligence strategies as implemented above. When you decide which strategies fit your e-commerce selling patterns best, you will be able to track the prices of the market with much more clarity. Hence according to the market actions, you will be able to set a price that would convince your prospects to invest in the solution you are selling to them with more confidence.
4 . Be updated with the latest trends
The market will keep fluctuating, what prices are trending in the market today will never be the same when you check 5 years from now. To ensure that the right pricing is being framed, always make sure that you are always up to date with the market trends. The more updated you are the better pricing intelligence decisions you can make.
5. Use Quality data
Another way to conduct efficient pricing intelligence strategies is to ensure that you have quality data in hand. Today many profiles one such as data scientists help brands to take the right steps in their business. With the data collected, they are able to make the right predictions which can help a brand to walk confidently in a solution that can capture the attention of their prospects. See it in this way, the more data you are able to capture the better your brand will be able to set the right prices.
To conduct pricing intelligence strategies, the first step would be to create such a strategy that will help to align all the above solutions which are exactly why you need to create an impactful pricing intelligence strategy that will enhance your business better.
Top 10 pricing intelligence strategies
1. Competitive Price Monitoring
This isn’t a new word for you.
Competitive price monitoring refers to having a close analysis of what prices your competitors have applied. For instance, if your competitors are selling their solution for a certain amount, you can analyze why they are doing that and understand the value they offer for example if they offer 4 benefits and price the solution a little bit higher, you can analyze and compare your solution such as if your solution offers 6 benefits you could sell it at a reasonable rate which wouldn’t be too less or too more for your prospects to ponder upon.
So when your prospects compare both they would have to go with your solution since you offer more benefits and the price for so much of them is reasonable.
2. Competitive Price Elasticity
What happens here is say if your solution and pricing are great and you are achieving success in the market and amongst your consumers, what happens is because the sales of your solution are getting better, your competitors play a role in adjusting their prices accordingly.
For instance say if you sell your solution for $120 each and are working well with the figure, your competitors could alter their prices and sell their solution for $90 each. This can garner your prospect's attention away from you and explore what your peers have to offer.
Avoid this from happening and ensure that you are always alerted by your competitor's actions such as this and also try setting a price for your solution that even if your competitors are altering theirs, it sounds either too cheap or too expensive from their end.
3. Dynamic Pricing
Dynamic pricing stresses more on the changes taking in the market. The market conditions keep changing for example today your prospects may be paying $100 for your solution but when the next market changes happen they could be either paying double that amount or lesser than that.
Dynamic pricing refers to making changes and aspects into consideration when setting a price. For instance, you could set your prices higher when the demand for your solution would be high, you could alter your prices for your different types of prospects whom you engage with such as for new prospects you could charge a bit less but then for the existing leads you could increase the prices.
Sometimes the market conditions are such that you would have to change the prices accordingly, so ensure that all these factors are also considered when you set up your next pricing intelligence strategies.
4. Price Intelligence
Another pricing intelligence strategy that you need to take care of is what value that price holds for your brand in the market. Wouldn’t you like to set such a price for your solution in the market it reflects that your brand sells solution at a reasonable rate? This is exactly what pricing intelligence aims to deliver. Ensure that whatever pricing you are setting up, in the market you are able to analyze and receive a pricing insight on the performance of your solution.
When you set a particular price, it is important that you are being perceived as implementing a good strategy. For instance, if you are selling your solution for a lower rate you shouldn’t fall under the cheaper category in the market similarly when you quote your price a bit higher you need to not appear at the very expensive list. Ensure that the price you set brings you under the image of reasonable and worth its categories.
5. Price Optimization
The main agenda for such a pricing intelligence strategy is to cater to the right audience with the right product at the right price and at the right time. Price Optimization depends on the predictions of analysis from prospect behaviour. For instance, say you sell two types of solutions, now the whole year, not all your solutions will be sold equally.
Maybe in the first half of the year, the first solution would have a higher demand and the second half would prefer your second solution. Having an understanding of this helps you to set a price and cater to your prospect's needs during that time. So when you know that your prospects will demand your second solution you tend to start selling them during that time period by pricing the right amount.
When you cater to prospects' needs and sell them a solution that is worth their time and money, conversion rates and sales numbers should be the least of your worries for your business.
6. Rules-Based Pricing
Rules-based pricing is another unique pricing intelligence strategy. What happens here is you will be setting the prices according to some rules or formulas being applied. Martech.zone explains ‘’If competitor’s price drops to X, our price goes to Y, If a product is low on inventory, raise the price to Z.”
Depending on the scenario your prices should be set accordingly. For instance, when your competitors drop a price, you could increase your price by offering an extra benefit which would entice your prospect to be drawn towards what you have to offer. Similarly, when you know that if one of the supplies of your products is less, you increase the prices so that you can sell better.
Incorporating all of this is necessary as it is yet another pricing intelligence strategy to be considered.
7. Smart Dynamic Pricing
This pricing intelligence states that the demand for the solution determines the pricing. For instance, say if a product of yours is garnering more views on your social media handles or is getting better reviews, the price for that solution can be set accordingly. Even if you increase the price of such solutions, there is a valid justification with the reviews, feedbacks, and notes being considered of that solution.
As mentioned earlier, prospects ponder upon products who would offer better benefits in the solution being sold with a price that justifies what they are receiving. This pricing intelligence strategy is the perfect example of it.
8. Bundle pricing
Bundle pricing is another great example of pricing intelligence strategies. With bundle pricing, the concept is to sell a huge bulk of solutions to your prospects while giving them an idea that they will be investing in multiple solutions at a lower rate instead of having to invest in one solution.
This is a win-win category because such pricing intelligence strategies always work. Understand it in this manner, you are selling your solutions in a vast manner, while you manage to sell most of your solutions, your prospects, on the other hand, benefit from it because they are getting more with a cheaper rate.
9. Captive pricing
Captive pricing is another great strategy for pricing intelligence strategy. What happens here is for your prospects to buy a solution, they need to buy an additional product for it to function. For instance, to access information online, you will need a good number of IP addresses that can help you but for that to happen you will need a proxy server.
This kind of pricing strategy always works because you can earn a good amount of profit since the prospects have to invest in two solutions.
10. Psychological pricing
This is a pricing intelligence strategy that matters when you decide on pricing. For instance, if you sell your solution for $99, $149 and such types of pricing figures, your prospects will find it cheaper and will be drawn towards buying it, but if you sell it for $100 or $150 your prospect could consider it to be too much and would walk away.
The main agenda here is to understand how the psychology of your prospects such as what makes them choose a solution, what prices draw them closer and much more. When you have the analysis of such information, it becomes easier to use this strategy.