There is a lot to consider when working on the pricing strategy for your business, whether you’re fresh off the heels of a price hike or looking to clarify your current pricing plan. Achieving the right price point for your product or services can be challenging. Pricing software significantly improves the efficiency of this process, paving the way for optimising your revenue. Here’s why the traditional way of pricing will fall behind in today’s highly competitive, digitised markets.

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Challenges with Traditional Pricing

As your business grows, you'll quickly realise that your traditional pricing strategy is no longer feasible. You can no longer rely on gut feeling or ballpark estimates – you need to have a more structured approach to pricing if you want to stay competitive. Here are some common challenges with the traditional way of pricing.

• Relying on Gut Feeling: Pricing strategy is still largely emotion-driven and coloured by intuition and guesswork. Of course, pricing managers can rely on broad past trends to make these calls, but there is often no way to validate these assumptions. 
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• Manual, Repetitive Tasks: Traditional price setting often relies on spreadsheets of data collected manually. Unfortunately, that means a pricing manager has to do a lot of manual, repetitive tasks, which can lead to a greater chance of error.
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• Too Many Variables To Track: There is too much data across too many variables for the human brain to track, let alone compute or analyse. As a result, companies may struggle to identify all the variables that have a bearing on price, potentially missing out on the most valuable ones. Some companies may not even have the discipline to monitor valuable data variables. 
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• No Regular Opportunity for Insight and Learning: Most companies only look at their pricing strategy quarterly or during a crisis. In this case, opportunities for insight-based learning are few and far between. 
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How Pricing Software can help you optimise Pricing Strategy

Considering pricing software for your company? Wondering if it’s worth the investment? Here's a look at how pricing software can help you optimise your pricing strategy

1. Automate repetitive and manual Tasks

Most pricing managers deal with manual, repetitive tasks that are tedious and resource-intensive Unfortunately, that can lead to an increased likelihood of human error. Investing in pricing software can help you automate these tasks. It’s a great option if you're looking to save time and resources that can now be directed to more valuable tasks! 

2. Access to well-organized Data‍

As opposed to endless spreadsheet files with poorly organised data, pricing software can help you not just collect data about your sales, margins, and competitors' prices, but also create visuals from that data. This makes it much easier to understand and evaluate various KPIs and metrics. Such information can be invaluable as you develop or refine your pricing strategy.

3. Choose the right KPIs to track

When it comes to Key Performance Indicators, one KPI (like gross margin, for example) is not enough to get a clear picture of the business. More often than not, one KPI is merely a small piece of the puzzle. It’s essential to track KPIs across different customer and product segments. Pricing software can track those metrics and help you clue in on the right ones to monitor. For example,

4. Run Predictions with the Help of ML.

Companies can also use pricing software to test different prices for their products or services. AI-based software like SYMSON can analyse historical data through ML (Machine learning) and predict which price points can optimise revenue. This way, you can see what price points are most effective in generating sales and profits.

‍5. Validate Assumptions and make informed Decisions

Some pricing managers have years of experience and a good intuition for decision making. However, conveying the reasoning for their findings to the team can be difficult. With pricing software, you will have visualised data to validate assumptions and visuals to make a case for informed pricing decisions. 

‍6. Get deep Insights about Products and Customer Behaviour

AI-based software can help you keep track of trends in customer behaviour such as seasonality, product popularity, price sensitivity. You can also use this software to identify your price elastic products and key value items. These are valuable metrics to keep track of while creating your pricing strategy.

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Benefits of Using A Pricing Software

There are multiple benefits of using a pricing software. Here are the most significant benefits

• Get  2-5% More Margin
  Get recommendations for the best possible price from smart AI-driven algorithms.
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• Get More Market Share
  
Track competitor data and use it to position yourself in the market
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• Reduce manual work by 40%
  Automated collection & use of all relevant data.

The Price of Waiting

As with any investment, you may be tempted to wait on the decision. However, the more you wait to improve your pricing process, the more money you leave on the table.

For example, if pricing software could save you even 1% more margin, in a year’s worth of sales, that compounds to a considerable amount. Gartner reports the following average outcomes for companies using these price optimization software.

• Revenue increases of 1% to 5%.
• Margin increases of 2% to 10%.
• Increase in customer lifetime value of 20%.

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AI-based pricing software will not only prevent you from losing money, but it can also recommend ways to help you optimize existing margins.

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Pricing Software as an Investment

Pricing software is a valuable investment for companies in dynamic markets who deal with large volumes of transaction data. Dedicated dynamic pricing software such as the SYMSON dynamic pricing management tool can make business processes much smoother and help you focus on more significant decisions for the company's growth. Investing in pricing software can be a wise decision if you're looking to optimise your pricing strategy. It can save you a lot of time and resources that can now be directed to more valuable ta