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innovative Algorithm

Price Sensitivity Algorithm for Optimal Price Suggestions

Not enough data for price elasticity? Define your specific Price Levers into a Scientific ML Algorithm for Optimal Prices.
Scientific and Proven Algorithm. No Blackbox!
Combine different strategies with Business rules

Why use Price Sensitivity?

To get recommendations for optimal prices and understand the behaviour of your customers. By defining your specific Price Levers into a Scientific Machine Learning Algorithm, Symson can predict an optimal price and explain the correlation of your defined Price Drivers to this recommendation.

You will be able to:
Identify & leverage specific Price Drivers
Get Optimal (WTP) Price Recommendations
Scientific approach /No Blackbox
Insights into Customer Behaviour

How Price Sensitivity Software works

Pricing is your most important decision
Price Leadership is key
Automate your pricing process
Benchmarks are needed to survive
B2B: Track and manage vendors

Define your specific price sensitivity levers.

Map price drivers to product / customer clusters

Develop regression model for price sensitivity drivers.

Test model for computation accuracy and consistency.

Use sensitivity scores to generate optimal price


Key Features of Price Sensitivity Software

Take advantage of the innovative Pricing Sensitivity Algorithm of SYMSON. Gain insight into your customers' behaviour and set the best prices.

Predict optimal prices via business-specific price levers

Use lower/upper boundaries to control your price prediction

A group discussing the Scenarios for Price Optimisation in the Smart Dynamic Pricing software SYMSON
 What are price DRIVERS

Price Drivers Explained:
Competitor Intensity

Competitor intensity refers to the level of competition within a market which can significantly influence optimal pricing decisions.
Competitor Intensity measures:

Market Competition Density: number of active competitors and their relative sizes within a market.

Price Positioning: how your product's price stands in comparison to competitors' pricing.

Competitive Response Rate: how quickly and frequently competitors adjust their pricing in response to market changes.

Market Share Shifts: fluctuations in competitors' market shares as a result of pricing strategies.

Take your pricing to the next level

What is Price Sensitivity?

Our Price Sensitivity Algorithm measures price levers to understand customer behaviour to detect their willingness to pay. Organisations use this understanding (sensitivity score) to set the optimal price per customer / product cluster.

A group discussing the Scenarios for Price Optimisation in the Smart Dynamic Pricing software SYMSON

Choose the right Algorithm for you

Price Elasticity vs. Price Sensitivity

Price sensitivity and price elasticity are different when it comes to pricing optimisation. Let's uncover their differences so you can implement them at the right time.

Sensitivity Pricing Algorithm explained

Let’s start with expressing that we are big fans of Price Elasticity, thanks of its ability to accurately predict the optimal price, but we also need to mention that Price Elasticity rather cannot always be used. Price Elasticity does a great job at finding the optimal price, however it does need a high volume of specific data. Organisations don’t always have such a high of volume of very specific data. However, they may have different types of data that can be leveraged to find the best prices. This is where Sensitivity really shines.

Which price drivers can be configured

All relevant data for each price driver is gathered on product level and therefore includes information on product segment, country, specific customer or customer group, etc. This algorithm can be applied to each dimension (combination of country, customer group and segment), as long as each chosen dimension has enough data of good quality.Examples of price drivers: Buyer Frequency of a Product, Price Change Frequency of a product, Brand Value, Competitor Intensity, The Product Lifecycle, Basket Size, Price Level of a product, Product ranking, Customer type, Inventory run rate, Favourite List, etc.

How the Sensitivity Results can be used

The outcome of the Price Sensitivity Algorithm, focussed on customer price drivers, can be used to:

1. Optimise your prices or/and price lists
2. Raise or lower the 'current given suggested price' with a %.
3. As a Sensitivity score for each price driver, useful in other use cases, models, systems (API connection)
4. To get a better understanding of the customer behaviour.

Price Sensitivity for product (B2B)
CPQ and Price Sensitivity

How the Sensitivity Algorithm uses price drivers

This model is designed to discover the optimal price of a product. The model consists of several price drivers relevant to your organization and sector, and discovers via a scientifically proven method if and how the price drivers influence the price. The model outputs a number for each price driver, which represents its impact on the price: a sensitivity score related to the driver. In other words it calculates how much the price driver influences the price and gives the price driver a score. The model uses the correlation between all the different driver scores to suggest raising or lowering the 'current given suggested price' with a %.

Why the Sensitivity Results can be trusted

Symson’s data quality report engine gives the suggested price a data quality score, that indicates whether the outcome of the algorithm could be trusted (i.e. if it has enough data points), or if more data is needed for an optimal outcome.

Price Sensitivity for product (Retail)
Customer Sensitivity to price changes
identify your price drivers

Price Drivers to determine Sensitivity

Engaging in market research and customer surveys helps companies gain accurate insights into customer preferences, perceptions, and purchasing decisions. At SYMSON, we have extensive conversations with our clients to understand their specific price drivers for their product assortment

Buyer Frequency of Products

This measures how often customers buy a product within a certain timeframe. The more frequently a product is purchased, the more aware customers tend to be of its pricing, affecting their sensitivity to price changes. We compare the average buying habits of customers to their recent purchase patterns to help determine the most suitable price change.


The model discovers if products that are sold a lot, are more price sensitive then other products.

The Product Lifecycle

This reflects where a product is in its lifecycle, from being new on the market to becoming a mature product. Typically, innovative products are less price sensitive, given there aren't many alternatives in the market. On the contrary, mature products could behave differently as there are more established alternatives. Products are categorized from 1 to 4, representing stages from introduction to decline, which aids in pricing decisions.

The model discovers if products that are ‘new’ and ‘unique’ on the market, are less price sensitive then other more mature products.

Brand Value of Products

This considers the value and reputation of a product's brand. High brand value often correlates with lower price sensitivity, as customers are willing to pay more for brands they trust or prefer. A strong brand position allows for greater pricing power and resilience to competitive pricing pressures. The model assesses the impact of the brand's perceived value for each individual product to price sensitivity.

The model discovers if products from Brand A, are more price sensitive then products from Brand B

Product Type A vs B

This looks at the nature of the products we’re selling and how that influences their price sensitivity. Different types of products have different pricing sensitivities., f.e.,

  • like ‘daily necessities’ versus ‘occasional purchases’, 
  • material A versus material B
  • packaging A versus packaging B
  • color A versus color B
  • warranty or no warranty

The model discovers if products of Type A are more price sensitive then products of Type B, where type can refer to a multitude of aspects.

Price Level of a product

This involves evaluating a product’s price in relation to its perceived value. The model finds out how the height of the price influences price sensitivity. It helps us understand where our product stands in terms of pricing and whether adjustments are necessary to maintain a competitive edge.

The model discovers if products that are sold in the ‘higher price range’, are more price sensitive then products sold in the ‘lower price range’.

Price Change Frequency

This tracks how many times a product's price has been adjusted over a given period. Frequent changes can make customers more conscious of the product's pricing, influencing their price sensitivity. This can be due to various factors like production costs or market competition. The model identifies which products are influenced by this factor and how significantly it should impact the price change.

The model discovers if products that have a lot of price changes, are more price sensitive then other products. 

Inventory - type

This factor examines the relationship between ‘stock-inventory’ products and ‘non-stock’ inventory products and price sensitivity.  Non-stock inventory products refer to products that a business decides not to keep readily available in its inventory for various reasons, such as low demand, high carrying costs, or seasonal nature. These items are usually obtained or ordered from suppliers as needed, based on customer requests or specific orders. 

The model discovers if products that are sold from a stock-inventory status, are more or less price sensitive then products sold in non-stock inventory status.

Competitor Intensity per product

This is an assessment of how many competitors exist for a product and how this affects price sensitivity. More competitors generally mean customers have more choices and may be more price-sensitive. The model evaluates the relation between individual products' competitor intensity and price sensitivity.

The model discovers if products that are sold by multiple competitors, are more price sensitive then products that have less competitors.

Learn more about the Algorithm

Why SYMSON stands apart from other solutions

Google Shopping Integration
Website Scrapers

Using Price Sensitivity with SYMSON

Price Sensitivity Algorithm for Best Prices
See tool in action (Demo)

Gain more knowledge on Symson's Capabilities

We’ve curated the the best of our content resources around pricing to empower you with the knowledge you need to get started on your price optimisation journey!

Adopt Hyperlearning™ into your organisation

We are big believers in bringing the human and machine perspective together to improve the rate of learning. Empowering people with the knowledge and technology to solve problems and improve is our mantra. This is Hyperlearning™.


Why we believe in Explainable AI

Unlike blackbox AI. we made sure this model is explainable and transparent to all who use our platform. Every recommendation from the AI provides the logic and the rules applied to arrive at that price.  It’s crucial for the users to understand the algorithm and provide their own input to make it better. This way, we can harness the best of man and machine.

Provide your own input

Spot errors and recognise shortcomings

Improve accuracy

Continue to learn and upgrade the process

Watch: Setting your Custom Use Case

Check out this Case Study to see how we define your Use Cas: Goal Setting, Identifying Product Catalog, Price Drivers and Strategy and more.

Here, we discussed a case study that emphasizes how SYMSON helped a company in:

Increasing gross margin

Data driven decisions

Interpretable insights

Fine-tuning brand value


Pricing Knowledge Guides

Our collection of expertly curated guides is here to empower you with the knowledge you need! Explore innovative pricing strategies that will help you boost revenue, retain customers, and outsmart the competition.

Here's what our customers say

Prices automated
Prices optimised
in margin
The Head of Pricing at INDI a client of the Automatic pricing software SYMSON
“SYMSON helps us make our pricing process more intelligent.”
Erwin Hendriks, Head of Pricing, Indi.nl
Read Case

Frequently Asked

Got a question? We're here to answer! If you don't see your question here, drop us a line on our Contact Page.

What is Price Sensitivity?

Price Sensitivity measures consumer response to changes in a product's price. Businesses use this understanding to optimise pricing strategies, ensuring stability in demand even when prices fluctuate.

How is Price Sensitivity calculated?

To calculate the price sensitivity of a particular product we follow a simple process. First, we identify price drivers - market and consumer factors that may influence prices. Then, we build a model that uses the price drivers info as well as multiple external sources to generate a sensitivity score which then can be interpreted.

What do the terms 'sensitive' and 'insensitive' mean in this context?

In the context of price sensitivity, 'sensitive' refers to consumers' high responsiveness to changes in price; a small change in price leads to a significant change in demand. 'Insensitive' means consumers' demand is relatively stable despite changes in price; they are less likely to alter their buying behavior because of price fluctuations.

Why is understanding Price Sensitivity important for businesses?

Understanding price sensitivity is crucial for businesses to set prices optimally. It informs how price changes affect sales volume, revenue, and profitability. By knowing how sensitive customers are to price fluctuations, businesses can tailor pricing strategies to maximize profits, remain competitive, and meet market demand effectively.

How does competition affect Price Sensitivity?

Competition affects price sensitivity by offering consumers alternatives. In a market with many competitors, consumers are more likely to be sensitive to price changes, as they can easily switch to a competitor if prices rise. Conversely, in markets with few competitors, price sensitivity may be lower as consumers have fewer alternatives and may be less responsive to price changes.

Can Price Sensitivity change over time?

Yes, price sensitivity can change over time due to factors like shifts in consumer preferences, economic conditions, brand loyalty development, introduction of new products, or changes in the competitive landscape. For instance, during an economic downturn, consumers may become more price-sensitive, seeking better value for money.

More Questions? Contact us
Trusted by
Rituals, a client of Dynamic Pricing Platform SYMSON
INDI, a client of AI Smart Pricing Software SYMSON
Timing, a client of Intelligent Pricing software SYMSON
BUNZL, a client of Automated Pricing SYMSON
Fotocadeau.nl,  a client of AI Pricing Platform SYMSON
Noviflora, a client of Intelligent Pricing software SYMSON
Heuver, a client of Smart Pricing Software SYMSON
VInk, a client of Dynamic Pricing Platform SYMSON
Toolsidee, a client of Automated Pricing Software SYMSON

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Vincent Gelink
Commercial Director