Dynamic Pricing & Optimization
Our experts can conduct cross-product forecasting, develop elasticity models, create price optimization scenarios, and build solutions to implement pricing decisions in real-time based on current market data. Our area of expertise spans from creating price optimization models to building robust pricing platforms with multichannel integration. Some of the key applications are:
Market Based Pricing: Optimize prices for products, portfolios, and channels based on market conditions and target contribution margins.
Price Elasticity and Sensitivity: Estimate the impact of pricing on sales volumes. Cross Price Elasticity: Understand the impact of price differentials on market share.
Dynamic Pricing: Estimate price-change triggers based on customer behavior to maximize revenue/profitability.
Competitive Pricing: Analyze the competitive pricing and assortment landscape by category, brand, shipping charges, discounts and other dimensions to derive actionable intelligence.
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With promotional pricing optimization, it is possible to beat the competition and stay ahead through the use of advanced algorithms that blend data analytics and promotional strategies to select the most profitable items and offers. Here are the highlights of what we can do for you:
Quantify Promotional Strategies: Model merchandizing activities to make the most profitable offers when developing your promotional strategy.
Measure Net Impact: Simulate a variety of promotion vehicles and merchandizing types to understand the total net impact of the chosen event.
Implement Accurate Forecasting Methods: On-demand modeling can be conducted at the event or offer level to help predict impact of promotional event.
Discount Pricing: Recommend proper timing, frequency, and depth of both event-driven and ongoing markdowns. Our experts leverage customer’s price sensitivity, inventory, seasonality, on order, holiday, weather data and much more to create integrated solutions for airlines, hotels, specialty retailers, and mass merchants.
Quantifying Affinity and Product Bundling: Gain insight into which products are trip drivers or basket builders, while avoiding unnecessary discounts that aren’t relevant to consumers.
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Companies try to increase sales and profits by expanding services, reducing costs, and shifting channel strategies, but they ignore the impact each of these drivers have on gross margins. Analyzing the magnitude of these drivers makes it much easier to see what’s happening, pushing aside opinions for facts and developing actionable plans to maximize profits. We help you:
Conduct cost volume profit analysis to dig deeper into your cost data so you can uncover profit opportunities – across products, customers, sales organizations and channels
Reduce indirect costs through improved customer, product, and channel mixes
Uncover hidden cost anomalies and take corrective action to increase gross profit margins
Help stakeholders discover and resolve cost-to-serve issues
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Value Based Pricing
The willingness of customers to pay higher prices for your product or service is based on the value they receive. If you can measure the value of your offering, you have a better chance of developing one that can command a higher price. Our pricing optimization experts use tools and techniques like value-in-use analysis, value mapping, cross price elasticity, conjoint analysis and discrete choice modeling to answer the following questions:
How can you measure the actual value of your offering to a customer?
What is your offering’s perceived value relative to your competitor’s offering?
How might the marketplace respond to a price change for your offering?
Which attributes of your offering have the highest value to the customer?
Which segments of customers will value an offering highly?
When faced with multiple alternatives, how do customers choose between alternative offerings or offerings with a different combination of features?