Price optimization goes beyond balancing value with profit but has a direct impact on other areas of the business including marketing, sales, profitability, and growth. Organizations are able to execute a unique set of business objectives when they are able to analyze and test potential outcomes.
Price Optimization - the gift that keeps on giving
Reaching the right customer in a desired market segment at the exact right time can be challenging, but with price optimization software companies can analyze margins, volume, revenue, market share, customer behavior, supply and demand, and more to effect real change.
With market visibility, companies can select and implement the best pricing strategies to use with certain products. Go even further, and regional or seasonal pricing strategies from discounts to promotions can be selected, adjusting to the world economic changes happening around us.
Power of AI and ML
ML-powered price optimization allows for segmentation and demand modeling. Segmentation can be helpful to turn customer differences (such as differences per country or region) into price advantage and ML-powered price optimization can help you stay in business. Using demand modeling can help companies find the exact pricing for the right segmented group based on demand, increasing profit and improving business performance.
Agent-based optimization is another way to use pricing optimization. It helps companies to pursue multiple and competing business objectives all at one time, by creating an AI paradigm that imitates your customer, processes, and marketplace across all elements of the pricing waterfall. Constrained by only rules around behavior and interaction, this AI-informed price optimization is a powerful way to customize product sales based on your goals.
2023 will not be easy on businesses
There is no reason for companies not to be testing different models to determine what works best for their company. Using clean and hard data (customer, product, and sales/transaction data), companies can be one step ahead with pricing adjustments, to improve profitability and growth.
With uncertain times ahead, using AI for price optimization gives company’s agility, adaptability, and security. It also puts them ahead of their competitors. AI’s impact on business continues to evolve and this is just one of the many ways it will be protecting, enhancing, and stimulating business in the years to come. Hopefully more companies can begin to leverage these benefits.
- Guillaume Dupont, Principal Solutions Architect, Data Science and Optimization Pricefx