by Deeksha Malik
Published on 28 September 2016
Worried that you're charging too much for your products or services and putting people off? Or maybe you're laying awake in bed at night wondering if you could be charging more and boosting your profit margins? With the help of pricing optimization software you can make sure you're hitting the pricing sweet spots and keep tabs on what competitors in your market are charging.
Here we'll explain how to choose pricing optimization software, giving you an idea of what these applications do and how they can benefit your small business to help you make a decision about what's right for you.
Let's embark on the journey!
Pricing optimization refers to a process or technique that helps businesses determine what to charge customers for their product or service. It also helps the business to understand how their customers might respond to different pricing propositions for their products and services.
According to Chris Fletcher, research director, Gartner, "price-optimization software takes every piece of available internal and external data, from spreadsheets to ERP systems, to create individual pricing models designed to maximize profits and deter salespeople from excessive discounting."
Pricing is one of the trickiest parts of any marketing strategy. You don't have to get it right the first time, but you also have to ensure that it keeps up with the ever-changing marketplace. If prices are set too high, they could drive customers away. Set them too low and you can end up creating a customer base that is habitual to deep discounts, which will hit your profits in the long run.
Research has revealed just how powerful price optimization can be for a business. A landmark study in Harvard Business Review found that a 1 percent improvement in price can result in an 11.1 percent increase in operating profit.
So, if you are still relying on spreadsheets to analyze and manage prices, it's worth considering a pricing optimization software to price intelligently and make your business profitable.
Here are three questions to ask yourself in order to figure out if your small business is ready to implement a pricing optimization solution:
There's a ton of pricing optimization software out there, and app vendors are constantly adding features to their products to extend their functionality. So, at times, choosing which pricing optimization software to go for can be tricky. Before deciding on one-size-fits-all-solution, have a think about what kind of solution actually suits your requirements.
Once you are clear about the above key points, the next step is to make sure the pricing optimization software has the features you need. Here are some of the main things you should be looking for:
To make things easier for you to get started in your search, here's an overview of three of the most popular pricing optimization software solutions.
CallidusCloud Configure Price Quote (CPQ) aims to help in the price quoting and sales processes. The software helps to determine pricing trends using its pricing behavior intelligence. If you're looking to find out which products are selling the most and at what price CPQ can serve up this data. It'll also give you a breakdown of who these were sold to and when. The application has mobile functionality for configuring, pricing, quoting, and selling products and services.
Price: available on request
PriceGrid is a competitive price analysis and monitoring solution. The software is designed to help quickly analyze pricing on multiple products. It claims to send instant notifications when a competitor changes pricing structure, introduces new products, and files for patents.
Price: from $49 per month
Prisync is a solution that helps in tracking competitor's prices and product ranges. It reports this information through its web dashboard, email alerts, API and various other reports. Prisync promises to send daily or immediate price and stock change notifications. It caters to all sizes of eCommerce companies.
Price: from $49 per month
You can check out the full list of all pricing optimization software on GetApp.
For a more detailed look at the key players in the pricing optimization software market, check out our comparison page, where you can see at-a-glance how the applications differ in terms of features, integrations, mobile support, and online presence.
Hopefully, by now you would have made your choice and if not, at least you would have become clearer as which software to go for among all the options available.
Once you've chosen your pricing optimization software, or even if you're just demoing some apps we'd love to hear your feedback. Go ahead and leave a review of the solutions you've used.