Pricing may be the most critical decision in business and one of the most challenging to get right. Teams can work so very hard and accomplish great things, but the value of their efforts may never materialize if the price is not right. Conversely, weak teams and weak companies can far outstrip the profitability of superior ones just because they did one thing right – pricing. Perhaps because of the burden, complexity and consequence of the pricing decision, it’s not uncommon to see companies choose the illusory safety of cost-plus pricing or put blinders on and just set it and forget it. The lost opportunity and lost profits of shying away from the challenge is staggering!
And yet the questions confronting a business leader can be paralyzing. How to know if the price should be X or Y? What will a customer pay? Will sales be lost to competitors if prices are increased? Will increased volume offset the margin lost to a price cut?
Most of us know the academic answers to these questions: look to economics, to its demand curves and price sensitivities. The answers are there, but the reality is that those are complex concepts to implement. Importantly, knowledge and sophisticated software is not enough: scale data is required to be successful. Without enough data, that is prospects, customers, and purchases, the signal we must see in the data is lost in the noise.
Ecommerce retailers face these challenges of pricing amidst intensifying competition, race-to-the-bottom price wars, and Amazon’s unrelenting onslaught. And as many online retailers fight to hold their ground, they watch as their margins are squeezed.
Technology has been a powerful tool for online retailers and should serve well for the challenge of pricing, but the required expertise and investment to successfully respond are increasingly beyond the reach of too many retailers.
We are a winning team of ecommerce veterans and technology rock stars relentlessly focused on creating value for our clients through peerless technology and data. Every single individual at OptivityX is committed to passionately working towards our common singular goal: to materially increase profit for ecommerce retailers.
Contact us today and start increasing your profit or learn about our pricing optimization service.
Focusing On Profits
Talk to us today about how we can achieve our common singular goal — materially increasing your profits.