Improving pricing strategies with Advance Analytics
Designing an optimal pricing strategy involves having both, deep knowledge of consumers behaviors and a systematic approach to set, adapt and change it. So, a suitable pricing strategy is very important for obtaining excellent benefits and sustainable growth and profitability.
Offering a product or service to the right customer at the right time is a comparative advantage to corporations and advance analytics and Big data technology to adjust prices to a variety of key elements impacting on the pricing strategy, both functional (manufacturing costs, market demand, direct or indirect competitors, market characteristics, product´s real quality, etc), as well as emotional (perceived quality of the product, sensory stimuli applied on the product development strategy, prescriptions, etc).
Data analytics help companies to learn more of consumers patterns and to apply a suitable product-based pricing strategy to boost profitability. Customers knowledge is significant and therefore segmentation models and clustering algorithms, enable determining the suitable price and right time to apply them on each customer segmentation. Once customers patterns are known, upselling and cross-selling strategies of products portfolio can be set.
Pricing strategy is not only applied by retailers, all sectors can benefit from using advance analytics. For example, the financial sector, creating a personalized pricing model can offer optimal relationship-based pricing between costs and volume of liabilities.
For an effective pricing strategy to boost profitability we take into consideration:
Customers Big Data analysis
Personalized Cross-selling y Upselling