If you’ve heard the term pricing strategy, competitive pricing, or price monitoring, you might be wondering what they mean, and if adopting these strategies could improve your sales performance. Price monitoring allows businesses to keep on top of their competitors’ pricing, meaning that they can make informed decisions about their own pricing strategies.
So, can pricing monitoring software help improve sales? In short, yes. Price monitoring software can help to improve sales. Price monitoring software helps businesses to make data-driven decisions regarding their pricing. This helps them to arrive at optimal, competitive prices which should positively drive sales.
Keep reading to learn more about price monitoring, why you need it, and how it can drive sales.
Can Price Monitoring Software Improve Sales Performance?
Price monitoring is not a magical tool that automatically fixes all of your pricing and sales problems. But, when used correctly, in line with a suitable pricing strategy, it can help to boost sales.
Understand Changes and Consumer Trends
The last thing you need when sales are plummeting is to continue driving products that consumers don’t want, or don’t want to pay your prices for. Price monitoring helps to understand where your products sit within the market, allowing you to make data-driven pricing strategy decisions.
With price monitoring, it may become apparent that consumers want to pay as little as possible for a given product in one category, but are more likely to pay higher prices in other categories. This will help you to position your products correctly, driving sales away from competitors, towards your business.
Price monitoring software also allows you to track historical data to better understand consumer behavior and preferences. For example, you can see year upon year when prices are slashed, letting you plan ahead with an appropriate pricing strategy. It also allows you to see historical changes in demand, letting you know when it’s time to make your move.
Keep on Top of Competitor’s Pricing Changes and Tactics
Once you have positioned your product and/or business within the market, price monitoring allows you to stay on top of what your competitors are doing, so that you can respond accordingly.
But, price monitoring tools don’t just allow for defensive responses to competitor pricing changes, they can also allow you to see what they’re missing and get ahead of the game, driving sales to your business.
What’s more, price monitoring tools allow you to see the competition in the market for a given product. This allows you to change your pricing accordingly to attract customers. Where there is little competition, there is little risk in increasing prices and still gaining sales, but where there is high competition, you can lower prices to get ahead of the competition and improve sales.
Why Do You Need to Monitor Pricing Strategy?
Monitoring your pricing strategy is imperative for staying ahead of the competition and improving your sales. Your competitors won’t just be sitting back, doing nothing. They’ll also be looking for ways to get ahead of the pack. This is where price monitoring comes in.
Price monitoring allows you to make smart, data-driven decisions based on current and historical market data and consumer trends. It also ensures that your chosen pricing strategy is still relevant in today’s market – what was right for you a year ago, may no longer be your best option, and could result in losses.
Price monitoring, essentially, keeps you aware of what is going on in your market so that you can respond accordingly, or formulate a plan of attack to disrupt the market and drive sales. Without this data, you’re pricing blind. Your strategy will be completely reactive, and any changes made will likely come too late to reap the benefits.
Is It Really Necessary to Monitor Your Competitors Pricing Strategy?
With the drastic rise of eCommerce in recent years, it’s never been more important to monitor your key competitors’ pricing strategies. That being said, it’s also important to not just follow the herd, and implement whatever works for your competitors. They may have a completely different business strategy to yours, and what works for them may not work for you. Price is not the only element that influences sales.
However, monitoring your competitors’ pricing strategies may provide valuable information that you can use to your advantage. You may discover holes in their strategy, gaps in the market, or even that their strategy is working against consumer trends.
With this information, you can make smart decisions about your own pricing strategy, and make changes accordingly to drive customers to your business, and improve sales.
Learn more about the importance of monitoring pricing strategies in our recent blog. You can also learn about optimising your competitive pricing strategy here.
What are the Disadvantages of Competitive Pricing?
Competitive pricing, especially where decisions are made uninformed by price monitoring data, can have its disadvantages when implemented incorrectly. To avoid losing sales and selling at a loss, you must work on providing value to your customers in more areas than just price.
With competitive pricing, you also risk following the pack when that may not be the best decision for your business. Sometimes, following the pack can be essential to ensure sales, but it must be in line with your pricing strategy and overall goals.
What’s more, a price monitoring tool will help you to make the best decision in these cases – when pricing blindly and pricing defensively to match the competition, you may miss a golden opportunity to get ahead, but a price monitoring tool may identify these gaps for you to capitalise on.
Competitor Price Tracking with Price Trakker
Price Trakker offers one of the UK’s best price tracking software that allows you to make data-driven decisions to help you improve sales and get ahead of the competition. Our software is not a ‘one-size-fits-all’ tool; from the very beginning, our price monitoring experts work with you to fully understand your competitive landscape in order to help you to drive sales and achieve your goals.
Get in touch with us today for more information, or to book a demo.