Why you need Pricing Analytics Software
02/21/2023 - Dynamic pricing
Pricing analytics software is an automated tool that allows you to analyse the effectiveness and profitability of a pricing strategy. Pricing analytics software helps optimize decision-making within eCommerce businesses. The software collects data on multiple pricing metrics, such as sales, profits, price changes or user behaviours, and how they change over time. It also considers how variations in supply and demand within the market affect the eCommerce business. This data stream is then easily analysed and represented to provide key information on the profitability of prices. This will help you implement more effective and consistent changes to your pricing strategy.
Its functionality means pricing analytics software is crucial in the current context. Pricing is becoming increasingly complex due to the ever-growing online market, the speed with which changes occur at a global level, and the current period of inflation. Pricing becomes increasingly complicated the larger the catalogue of eCommerce products and the audiences it targets. You can harness the benefits of applying Big Data to pricing with a pricing analytics tool which will organize, study, and compare thousands of proprietary and competitors’ data.
Benefits of pricing analytics software for your eCommerce
In addition to the advantages mentioned above, pricing analytics software can help you in the following ways in your day-to-day business.
- Easily identify opportunities or weaknesses in your pricing strategy, and new market trends.
- Identify which sales channels are most profitable and which types of pricing work best.
- Plan effective and profitable promotions.
Learn more about different customer groups. By studying variables such as willingness to pay, you can better segment the prices aimed at each type of client.
How to implement pricing analytics software in your eCommerce
Before you install and start to use pricing analytics software in your eCommerce, you must be crystal clear about your KPIs and the current pricing strategy for each category or product in your catalogue. You also need to know who your main competitors are.
Key metrics for a company include:
- Average Ticket: Users’ average spend per purchase in your online store.
- Customer Acquisition Cost (CAC): The cost of converting a lead into an end customer. This makes it possible to assess the profitability of current advertising and marketing campaigns.
- Customer Lifetime Value (CLV) is the profit margin a customer delivers to an e-commerce business by purchasing products and services over time. This will be higher the stronger the relationship with consumers.
Knowing the results of all these metrics will allow you to understand consumers better and make effective changes to your pricing strategy.
Today’s most advanced pricing analytics software is constantly being updated to provide near real-time information on variations in supply and demand. Reactev’s ability to automatically adjust each product’s elasticity of demand curve allows you to know how users are reacting to your prices at any time.
Category: Dynamic pricing
