Pricing Intelligence: A Guide for Savvy Ecommerce Businesses

Businesses need access to data that can help inform their decision-making process and ensure that they make the best choice. Sellers that want to maximize their ROI have to consider not only their own pricing strategies but those of their competitors as well.

Using the right tool can simplify this process, giving you greater pricing intelligence at minimal costs. For those who want to stay up to date on everything going on in the market, there’s no better tool to take advantage of than Visualping.

What Is Pricing Intelligence?

Pricing intelligence is the collection of data related to market and competitor prices. Also known as “price intelligence” or “competitive price monitoring,” it gives retailers the knowledge they need to fill gaps in their own strategic pricing models.

With a clear picture of your competitors and their marketing strategies, you can design a pricing strategy that allows you

There is all sorts of information out there surrounding the importance of competitive marketing intelligence for businesses, and while it can be effective on its own, competitor-based pricing is only one of four common pricing strategies that businesses use for their products and services.

Competitor-Based Pricing Strategies: The 3 Main Approaches

Figuring out how to get the most out of your pricing strategy without turning potential customers away can be somewhat difficult. Charging the right prices for your products and services requires a strict methodology that you can incorporate into your sales strategy through intelligence research.

Balancing value and profit is critical to your sales, which makes pricing intelligence essential. The main approaches to competitor-based pricing strategies are designed to help you reach the best price point.

As you’re monitoring your competitors, you’ll need to consider the prices they offer, how long that pricing has remained steady, and whether there are any deals or discounts.

Premium Pricing

One common approach that businesses take to their competitor-based pricing is offering better products or services at a higher cost. Premium pricing strategies work by setting your prices above the competition but focusing your marketing efforts on how what you offer is of far better quality and added value.

Although they will often yield higher profit margins, premium pricing strategies cost much more to implement and must be supported by investments for longer periods. Even if you start to build a strong reputation, it can quickly falter if you don’t allocate enough resources to keep it up.

Price Matching

Another approach to pricing intelligence is matching your competitors' prices as a means of keeping your existing customers from moving on and purchasing from a different company. Sellers with low prices can pose a huge burden to price match with, but doing so will allow you to keep pace with their market strategies.

Price matching is generally used for consumers who buy products and services based on their costs and the amount of savings they’ll receive. It’s a perfect strategy to adapt to when premium pricing isn’t working out.

Loss Leader Pricing

Companies that want to gain an edge and quickly attract new customers may find that setting their prices much lower than the competition can actually be a solid strategy. Known as loss leader pricing, it is an approach that is useful for newer companies or those that, despite seeing massive growth, are noticing some drawbacks.

Loss leader pricing can definitely impose a negative impact on your business over the long term, as you won’t be seeing as much profit, and it can also damage your company’s reputation, given that selling at such a low price can lessen the perceived value of your brand.

Should you choose to price your products and services below their market value, consider doing it for a limited time only or through an event like a seasonal sale.

What Are the Advantages of Competitor-Based Pricing?

Pricing intelligence strategies should always be built on reliable data. By tailoring your approach to current market trends, you’ll have a powerful pricing framework for maximizing the ROI of your products and services.

Competitive promotion monitoring, hiring, and pricing are all essential elements of building out a practical product or service that will attract consumers. Competitor-based pricing has several advantages over other methods because it's designed to be so simple.

It’s Relatively Easy to Get the Data You Need

Perhaps the biggest advantage of competitor-based pricing strategies is that they’re designed to be easy to use. Looking at the competition and how they price their products and services means you’ll have a better idea of what your own items are worth.

Regardless of whether you’re taking care of manufacturing, distribution, or retailer price monitoring, it’s relatively simple compared to other methods.

Competitor-based pricing is a comprehensive strategy that only takes some basic research to get started. Finding out who your competitors are, along with their missions and how those impact what they offer, can have huge advantages when embarking on industry-wide marketing campaigns.

Can Give You a Sensible Price Point to Settle on in Order to Move to Market Faster?

Speed to market is essential if you want to get to potential customers before the competition, but if you’re too busy doing market research to settle on a decent price point, you could miss the window of opportunity entirely.

Competitor-based pricing allows you to quickly test pricing strategies and determine which will work the best for the current market environment. Instead of manually checking each item of interest, you can use competitor-based pricing to collect and act on real-world data by observing what other businesses are doing.

Facilitates Gaining Market Share

The amount of overall business that your company takes in can drastically improve your odds of competing with other companies, and by using competitor-based pricing, you can improve your market share and eliminate inefficiencies. No matter what industry you operate within, you can use competitor-based pricing to improve your positioning.

Competitor-based pricing models are especially useful if you’re selling products or services in areas where consumers tend to shop around for the best deal. An increased market share improves profitability, allowing you to further invest in your company’s resources, and with competitor-based pricing, you can develop a powerful solution to changing consumer demand.

When Should You Use Pricing Intelligence About Competitors to Determine Your Pricing Strategy?

There’s no perfect methodology for conducting pricing intelligence research, so instead of looking at it as something you have to do in a certain way, consider which plan is best for your situation. A good competitor-based pricing strategy will reflect your organization’s needs and allow you to adapt to changing circumstances.

Gathering pricing intelligence about your competitors to determine a pricing strategy should be an ongoing effort, so you’ll want to be prepared for anything that comes your way.

Your Business Needs Pricing Intelligence That You Can Rely On

No matter how you collect your competitive intelligence data, it won’t do any good if it isn’t reliable. Distinguishing between what’s important and just noise can take time and energy, costing you money and making it harder to take products or services to market.

With the right partner, though, you’ll be able to collect actionable intelligence that you can use to deploy your marketing campaigns faster and with less turnaround time. Visualping can be that partner.

Visualping is designed to monitor website changes, so you don’t have to. If you need the best website change detection, monitoring, and alerts system money can buy, there’s no better choice for your marketing campaigns. We’re trusted by companies worldwide to notify them as soon as changes occur on any of their tracked web pages.

Discover for yourself why more Fortune 500 companies use Visualping. Try it today, absolutely free!