In the pricing world, our industry is evolving faster than ever. As a result, many organizations struggle to keep up with the new pace without investing in some kind of pricing software.
Amazon, for example, extensively uses dynamic pricing to increase its profits. It’s been reported that Amazon changes its product prices 2.5 million times a day, leveraging its huge store of data to optimise prices. The bottom line: without data and AI (artificial intelligence) strategy, your company will be left behind.
Big data and AI will help you increase your margin and revenue by analyzing your competitors' prices, forecasting the future demand for your products and services, and providing personalized pricing recommendations.
Pressure to Deliver On Margins And Revenues
In today's highly digitized economy, it's getting harder to keep up with competitors. There is also increasing pressure from stakeholders to improve bottom-line growth. McKinsey estimates that up to 30 percent of the yearly pricing decisions companies make fail to deliver the best price.
If companies don't continually invest in new digital technologies, they may be left behind. There's no question that pricing is a complex challenge for companies today. However, with the advent of big data and AI, there's an opportunity to use these technologies to gain a competitive edge in pricing.
Why Big Data and AI are the future of pricing
In a rapidly changing business world, the ability to price products and services accurately is more important than ever. But how can companies keep up with the constant marketplace changes and maintain a competitive edge? The answer lies in big data and AI.
Big data is a term used to describe the large volume of data businesses now have access to. This data can come from various sources, including social media, website analytics, customer surveys, and sales data. AI is then used to help analyze this data and identify patterns and trends.
Investing in big data and AI strategies can help companies better understand their customers, what they're willing to pay, and how to optimise prices to meet margin and revenue goals. In a survey of 94 Fortune 1000 companies (including Motorola, American Express, and NASDAQ) 97.2% of of those organizations in 2022 are investing in big data and AI. However, in a digitally powered economy like ours, only those with access to organised and structured data can successfully navigate the market and make accurate future predictions.
Companies can use this information to improve pricing strategies by helping them understand their customers and what they are willing to pay for products and services. AI-based pricing software can also help identify new opportunities for revenue growth. Investing in big data and AI is essential for any company that wants to stay ahead of the competition and keep its pricing strategies on point.
Getting Started with Using AI Pricing Software
There are a few things to consider when it comes to pricing in the age of big data and AI. Businesses need to have access to accurate and up-to-date data that can be used to track customer behavior and preferences, as well changes in the market. Ultimately this leads to informed decisions that can be implemented quickly and efficiently.
In summary, adopting Big Data & AI in your pricing helps you
- optimize your margins
- get a better understanding of customer behaviour
- introduce a (hyper)learning approach in your organisation and makes its decisions based on insights
- save time by automating manual tasks
- create a more agile and responsive pricing strategy using real-time data from every source, including market dynamics, internal costs, and product features.
Companies can gain a competitive edge in pricing by investing in pricing technologies. So, if you're not already using data and AI to inform your pricing decisions, now is the time to start. You can read more about how pricing software can help you overcome the challenges of traditional pricing here.
Do you want a free demo to try how SYMSON can help your business with margin improvement or pricing management? Do you want to learn more? Schedule a call with a consultant and book a 20 minute brainstorm session!