8 ways to improve profitability using pricing and product performance analytics

When companies integrate personalization and proprietary customer data, revenue increases by 6% to 10%. 48% of consumers spend more when they receive a personalized customer experience. 

Today, customers are savvier than ever. They value personalization. They’re knowledgeable about marketing and targeting. They see through pricing strategies. 

That’s why it’s so important to gain critical information and valuable insights into the ever-changing demands of today’s consumers. Data is the key to these insights and information—data through pricing and product analytics. 

Leverage pricing and product analytics to help you understand who your customers are and where those customers find value in your product. 

What is pricing and product analytics? 

Pricing analytics help brands understand how product pricing affects the overall business. It also helps companies analyze the profitability of specific price points. As a result, businesses can better optimize their pricing strategy for maximum revenue. 

There are three main types of pricing analytics: 

• Descriptive: Descriptive pricing uses historical data and artificial intelligence (AI). This helps businesses evaluate how customers perceive pricing changes in the past. 

• Predictive: Predictive pricing uses historical data and forecasting techniques. These methods help retailers understand how customers could react to pricing in the future. 

•  Prescriptive: Prescriptive pricing uses optimization and simulation algorithms. These methods help retailers make informed decisions on determining the right prices at the right time. 

Product analytics uses data to analyze how users engage with a product or service. Retailers use this data to improve and optimize a product. 

How does pricing improve profitability? 

Product pricing analytics can help you understand why customers react to product pricing. This can help you improve your future performance. This means that you can offer products that are more likely to appeal to your customers. This helps reduce customer churn. An increase in customer retention can increase your profits. 

There are various ways pricing analytics boost profits for retailers, including:  

Optimize your pricing for value 

Pricing analytics can help you learn which customers are more likely to buy a product. You’ll also be able to see exactly how much your customers value your solution to their problems. 

As a result, you’ll be able to make better pricing decisions. This means fair prices to customers that match the value you provide. 

Cymax Group’s Channel Gate platform offers a Dynamic Pricing engine that helps brands optimize SKU prices across marketplaces with AI-enabled pricing algorithms. We use nearly 20 years of consumer data and machine learning. As a result, you can price more than 500k products in real-time. 

Discover which channels are most profitable 

By seeing which marketing channels bring in the most customers, you can determine which channels to spend more money on. 

For example, Facebook posts and ads might be generating more conversions than other methods. As a result, you might choose to create more ads or post more relevant content on Facebook. 

Gain more insights into customers 

Pricing analytics can help you identify which customer segments are the most (and least) profitable, and which ones respond best to certain pricing strategies. 

As a result, you can make better decisions on how to align your pricing strategies with customer segments that are likely to respond well to them. This means happier customers, which translates to higher profits and revenue. 

Plan promotions 

When you plan pricing promotions, it’s vital that you gear your promotions towards customers who are more likely to respond well to them. Without predictive pricing analytics, it can be difficult to tailor your specific pricing promotions to a specific audience that’s most likely to convert. 

How does product performance analytics improve sales and revenue? 

Product performance analytics help retailers reach their ultimate goal: generate more sales. Product analytics can improve sales and revenue in a number of ways. 

Identify opportunities to increase sales 

Product analytics offer many valuable insights your store can use to cut costs and improve product offerings. By analyzing transactions, you can see which products aren’t producing as many sales as you’d like them to. Product analytics help you understand why these products are underperforming. This can help you improve those products, which can make customers happier. More satisfied customers mean more sales and revenue. 

Data also helps you identify customer needs based on trends and changing marketing conditions. This allows you to improve and create products that deliver a personalized experience to customers. This, in turn, helps you deliver a competitive advantage in your industry. 

Product analytics can help you be more proactive about providing products your customers want. For example, consider lower-performing products. You can combine them with top-performing products, offering them as a bundle at a better price. Because customers want value for money, offering bundles can increase sales. 

Understand the product funnel 

Product performance analytics can help you understand a product’s journey from the warehouse to a customer’s hands. Every product is different. So, it’s important to see which ones are more likely to sit in a customer’s online shopping cart and which ones are most likely to result in a sale. 

Avoid stockouts (Inventory tracking) 

It can be difficult to manage inventory if you don’t have the right tools to monitor product activity. Also, without inventory management, you won’t be able to effectively track products as they make their way through the supply chain. 

Product analytics is a useful solution that helps retailers track inventory. Inventory tracking decreases instances of discrepancies, unhealthy stock levels, and backorder. As a result, you can improve operations, and ultimately, cut costs. 

Understand and plan marketing efforts 

Seeing how your products perform with customers can help inform your marketing efforts. This is because you’ll be able to see which marketing channels and methods produce the best results. 

Conclusion 

Pricing and product performance analytics offer many benefits. You can improve business operations and gain more information about customer segments. You can also boost the effectiveness of marketing campaigns. These improvements help retailers achieve the ultimate goal: driving more sales and revenue. 

Are you looking to stay competitive? Do you want to increase your profit margin with precision? We’re here to help. Get in touch with us today.