Pricing strategies come in many forms and the one that is best to employ depends on what goals you wish to accomplish. A competitive price strategy is one of the commonly used methods of setting prices. A competitive pricing strategy dictates that retailers price their products after factoring in the competitor’s prices. Competitive pricing is not synonymous with lowering prices every single time. The price you set can be lower, higher, or the same as those of your competitors depending on the market situation, demand, supply, and business goals.
Competitive pricing strategy: When to change pricing according to competition
A competitive pricing strategy requires you to know when to change prices according to the price changes of your competition.
When you set the price higher than your competition, you must be ready to explain to your customers why your product is valued higher and why it is worth that price. For example, it has certain benefits that the competition doesn’t offer, the brand produces higher-quality goods, and so on. When you set your product’s price lower than your competition then you must be ready to ensure your bottom line is not suffering as a result. That is, you need to ensure cost-effectiveness before you lower the price of your products and offer it to your customers.
If you are offering the product at the same price as your competitor then you must make sure you do have a reason why the customer should choose your product instead. For example, are you providing an extra feature for the same price as your competitor? This will encourage customers to pivot to your products rather than choose those offered by your competitors. If customers are not brand-conscious then they are more likely to choose your products. But intuition isn’t the only factor you should consider when pricing competitively. It is best to get insights from a software solution.
Relationship between price monitoring software and competitive pricing strategy
A competitive pricing strategy is a method of pricing your products while a price monitoring tool enables you to do so efficiently. When you want to regularly compare the prices of your products with those of your competitors, then you need real-time data to make essential decisions based on concrete data. Blindly going forward or second-guessing will not work in this case which is why a price monitoring software is the only practical way to conquer and effectively implement a competitive price strategy.
Even if you sell just 10 products, a price monitoring solution is essential when you are looking for a way to competitively price your products. A higher customer negotiation power coupled with the constant expectations of price drop means you need to master the delicate balance between earning profits and justifying the product price. Without an intelligent monitoring solution, you are only left with the manual monitoring method which is simply impractical. This goes for online and brick-and-mortar businesses.
Why consider a price monitoring software for competitively pricing your products?
Price monitoring software is key to getting competitive pricing right and long-lasting results that you won’t regret. This is particularly true if you are an online retailer. Here is why a solution to monitor price can be the best step toward long-term success.
Automation to speed up data discovery
When you want to competitively price your products, you need data to do that in real-time. This means data must be refreshed at least a few times every day because your competitors are doing the same. A price monitoring system finds exact matches that leave nearly no room for error so you are comparing the exact products with those offered by your competitors. This saves you hours of time and effort as the software is doing its job in the background. You are required to put in minimal effort and make decisions after it curates all the data.
Automation allows you to get trends and compare on the go. You don’t need to wait for the results as the software is made for monitoring purposes. For instance, if you want to compare the prices of a specific time, you can input the required variables and get back the results in minutes with a price monitoring solution. This gives you the upper hand as you can derive more value from the data and get accurate results in return in the fastest time possible enabling you to make better decisions rather than the last-moment ones.
Intelligence to price right at any time
Using an AI-driven tool will give you much more than just monitoring pricing intelligence. For example, Intelligence Node’s monitoring software reveals the best price for your product without sacrificing your profit margins. Oftentimes, businesses make the fatal error of continually pricing their products lower than the competition’s which eventually leads to price erosion. When a software tool is utilized, the best price rather than the cheapest price is recommended so you can enjoy profits and satisfy customers.
At times, your competition might have to increase their prices for some reason and you can attract customers by offering a product that is priced a little lower than theirs. This can give you an advantage over them. A monitoring solution enables you to identify gaps so you can fill those gaps with your product offers and build a loyal customer base eventually. This enables you to grasp any opportunity on time even in a highly competitive climate.
Insights that may be overlooked otherwise
Manually working to competitively price your product is limited because you cannot simultaneously check and compare prices from loads of competitors at once. With the help of a monitoring software solution, you can get more done in less time with increased accuracy. Manually determining and zeroing in on a competitive price is difficult, to say the least, but it doesn’t provide insights because you need to look for those yourself. A monitoring solution saves you from this as you are provided insights.
The insights are based on past trends, the price movements of the competitor in the previous months, the demand for the product, and so on. These insights give way to better decision-making that will be useful for attaining long-term goals instead of just short-term goals. Without a software solution, these insights are most likely to be overlooked because it is difficult to compare and extract trends from such a vast mountain of data. A software tool makes it much easier for decision-makers to derive value from data.
Is competitive pricing right for your business?
A competitive pricing strategy is not the answer to every retailer’s pricing woe just like a certain pricing strategy will not work for a single business under all circumstances. But that is not reason enough to throw it aside. Competitive pricing works well for many business models and it could work for you depending on what you want to achieve and what you are selling. But price optimization can do wonders for you only when you have a dedicated price monitoring system in place that collects data and provides insights so you can act upon them.
Take the example of Amazon. It would be impossible to work without algorithms and intelligent software for the e-commerce giant. It refreshes prices every 2 minutes and changes prices according to what competitors are offering. This has given Amazon the edge over others who are unable to compete so fiercely. Experts reveal that competitive pricing shouldn’t be the last resort but should be approached with careful consideration preferably with intelligent software.
Conclusion
A price monitoring software is indispensable for retailers who want to implement competitive pricing or any other pricing strategy. Pricing is a major part of the product. Most shoppers will consider price before purchasing and smartly pricing your products can make your customers come your way. You can forge ahead when you have competitive pricing intelligence at your fingertips with a tried and tested price monitoring solution such as the one offered by Intelligence Node. This can unveil a wealth of information that is impossible to get otherwise.
Intelligence Node’s AI-driven price monitoring solution provides 99% price matching accuracy. The pricing solution provides smart pricing suggestions to keep profits high. It factors in the demand, product availability, and market trends on a global scale so you never miss out on pricing intelligence when pricing your retail products. If you are looking for an intuitive plug-and-play solution then try the price monitoring solution by Intelligence Node.
