Enterprises make critical pricing decisions very often. These decisions have a major impact on their profitability index and also determines the bottom line of the organization. Often, managers and analysts are forced to determine prices and discounts with limited available information and inefficient toolsets. Pricing Analytics enables the leadership of a firm to proactively manage pricing policies and strategies and guides them to arrive at the right pricing that is in-line with company’s market positioning and business strategy. Pricing analytics empowers analysts to draw insight-driven pricing decisions, measure the effectiveness of these decisions, and, when required, make adjustments using consistent data within the right business context.
Organizations are seeking to overhaul their pricing capabilities but are facing challenges of fierce competition, highly volatile commodity prices, and ever-demanding retailers in achieving this. It is a fairly ominous task to understand the internal and external factors (metrics) affecting the profitability at a granular level for an Enterprise having presence across a wide range of product lines. Facing growing complexity and a multi-channel business environment, firms make pricing decisions either by using gut instinct or using traditional guidelines. Such toolsets are high likely to lead to missed opportunities and exposure to unnecessary risk and declining margins.
Potential Benefits and Driving Force:
Provided with detailed information on product line profitability and customers, pricing and sales analysts can use Price Analytics to identify opportunities of tangible pricing improvement. Price profiling and price floors can be derived to enable fine-grained prices and policies for individual buyers.
It empowers users to quickly understand price drivers by understanding the bottom-line impact of all discounts, incentives, services and marketing programs. Insights from Pricing Analytics help identify under-performing segments or critical areas of revenue leakage and can be immediately targeted for profitability enhancement. These insights can be used to fine-tune emphasis on channels and employ surgical or strategic adjustments to pricing.
With Price Analytics, companies can continuously keep track of, analyze, and refine pricing programs to gain maximum margins and profits. Managers and analysts are no longer required to wait to download data into spreadsheets and then reprocess/reformat data. Pricing personnel can use powerful BI capabilities for analyzing this data in real time and generating up-to-the-minute reports when needed.
Proactively, analysts can set event-based alerts to be notified of certain business conditions that demand immediate attention. Pricing Analytics can help find patterns in large sets of data and understand the key contributing factors to price variances, establish better KPIs, and obtain recommended actions.
Pricing Analytics is a pre-built solution that enables quick implementation at a lower cost, with the lower risk involved and better business results in comparison to traditional BI implementations.
Price Analytics is a next-generation analytics built upon standards-based technology. The analytics toolset must support easy integration with existing IT environments and support all leading relational and OLAP data sources. Pricing Analytics holds the key to the future of critical decision making by providing organizations with valuable insights into product demand, the impact of discounting on margins, customer price sensitivity, and overall pricing effectiveness.