Competitive Pricing Analysis – stay ahead of your competitors
- 20 April 2023
Successful pricing results from many different factors – the quality of your products, your market positioning, and the prices your competitors offer. Competitive pricing analysis can help you understand what can be done to ensure the highest possible profit. This is one of our platform’s features, and that’s what we want to discuss in this post.
In fact, competitor price analysis is something every online store should do. Why? Imagine that you conduct such an analysis, and it turns out that:
- Your prices are too high (meaning you’re not selling as many products as you could)
- Your prices are too low (meaning you’re not making as much money as possible)
Both scenarios are detrimental to your business! For prices to be attractive and profitable, they had to be perfectly balanced. And that’s what competitor price analysis is all about. Let’s dig deeper.
Three reasons for competitive pricing analysis
The truth is finding the right balance in your prices is just one of four reasons why you should think about it. With competitive price analysis, you can also spot market trends. Again, let’s use an example. Your competitive pricing analysis tool informs you that your competitors are lowering their prices. This can mean that, for example, the market is becoming more competitive – perhaps there is a new alternative to your products.
Thirdly, competitive pricing analysis comes in handy when it comes to strategic planning – knowing what your prices should be, you can make more informed decisions on product development, marketing strategies, and sales.
How can you identify competitors and their prices?
The first step in effective competitive pricing analysis is all about identifying competitors. You can do so using Google (look for specific products in your area/country, and see who provides them). Another good idea would be to check online marketplaces, such as Amazon. Here, Dealavo can help you too! Thanks to our price tracking tool, you can monitor all the major marketplaces out there:
Once you have identified your competitors, you should start monitoring their prices.
Here’s what you can do:
Make the most of your competitors’ pricing data
Competitive price analysis requires access to your competitors’ pricing data. Here are some ideas you can benefit from in your business:
- Monitor competitive websites: You can also choose the manual way and visit your competitors’ websites and write down their prices. This method is usually ineffective as prices can change even several times a month.
- Monitor online marketplaces: Amazon, eBay, and OLX – these are just three examples of online marketplaces offering many different products. You can use them to track the prices of your products.
- Monitor social media: some competitors may use social media platforms such as Facebook Marketplace or Instagram to promote their products. Monitoring these channels is also a good idea, especially if you offer fashion products.
Monitoring all those channels can be automated using our platform. You see, our price intelligence tool can automatically collect and analyze pricing data from multiple sources and provide you with almost real-time insights into your competitors’ data.
With our help, you don’t even have to know your competitors! As a part of our competitive pricing analysis offer, we can help you find your competitors! All you need to do is generate a product feed and share it with us. Our system will do the rest.
HOW ELSE CAN YOU IMPROVE YOUR PRICING AND REVENUE?
That’s not all you can do! We want to show you three more ideas that will help you get more customers and make your business more profitable:
- Differentiate your product: If your product is unique (or you have little to no competitors), you may be able to set a premium price for it. This can help you remain competitive even if your prices are slightly higher than your competitors.
- Offer discounts and promotions: Offering discounts and promotions can help you attract customers and increase sales. Just be sure to do so strategically so you don’t devalue your product or service.
Use psychological pricing: Psychological pricing involves setting prices that take advantage of the way consumers think. For example, setting a price just below a round number (e.g., $9.99 instead of $10.00) can make your product seem more affordable, even though the actual price difference is negligible.
Why should you opt for professional competitive price analysis?
There are at least four reasons why you should automate your competitor pricing analysis and do it with a professional partner:
- Competitive advantage: Thanks to our competitor pricing analysis tool, you are always up to speed with what’s going on in the market, giving you a significant advantage over your competitors.
- Improved profitability: Our tool always looks for ideas and areas that can be improved so that you can increase your profit.
- Better decision-making: Because you have access to the latest and most accurate market data, you can make more informed decisions.
- Reduced risk: With access to current pricing trends, as well as pricing strategies used by your competitors, you know how to operate to decrease the risk of failure.
AI and ML in competitive pricing analysis
Artificial intelligence has revolutionized many areas and branches of online business, including competitive pricing analysis. And since Dealavo is a part of the CodiLime group, we have access to high-end performance machine learning solutions that make our crawling, matching, analysis, and presentation process incomparably efficient and accurate. Thanks to our ML algorithms, our clients get accurate market insights that streamline their decision-making processes.
How to make the most of competitive pricing analysis
With effective competitor pricing analysis, your company can always be one step ahead of the competition. Below, we share three useful tips that will help you make the most of your competitor price data:
- Set up automated price alerts: They will help you stay updated concerning all pricing changes among your competitors. With this feature, you don’t have to track each competitor manually, it’s all automated, and you get all the data you need right on time.
- Monitor your competitors’ pricing history: Thanks to Dealavo, you can see how various prices have changed over time. This will help you identify any patterns or trends in competitors’ pricing strategies. You can use this knowledge to adjust your offers accordingly.
- Analyze customer shopping behavior: Apart from monitoring competitors’ pricing and activities, you should also monitor your customers’ behavior and interests. This way, you will be able to tailor your offer toward their needs and benefit from personalization (think personalized product recommendations) and other advanced marketing and sales techniques. Such an approach will also increase your conversion rate and customer satisfaction.
Wrapping up: Make competitive pricing analysis a permanent element of your sales strategy
Competitive pricing analysis is an essential tool for any business looking to stay ahead of the competition. By examining your competitors’ prices and adjusting your pricing strategy, you can remain competitive while still making a good profit. Add AI-powered suggestions, discounts, and promotions, as well as monitoring customer behaviors, and you’re on a straight course to the pricing strategy that checks all the right boxes. With these tools and techniques in place, you can be sure that your pricing strategy will give you a competitive edge in the market.
Do you want to know more? We are at your service! Give Dealavo a try today!