OnDemand WTP Pricing Research

Pricer’s Points: Create impact with pricing analytics | Loon Lee Spielmann

How can pricing professionals provide value-added business reviews?

  1. Generate actionable analytics and insights
  2. Provide simulations and impact analysis

Price review

By combining the right sets of data and KPI, e.g. Price realization with sales data, you might just get a slightly different picture.

Price realization provides indication of how well executed prices meet price targets. So it seems that in the 3rd and 8th month, there has been an effort to raise sales volume, at the expense of price.

This insight from price realization provides the opportunity to collaborate with sales and marketing, to support their growth strategies and better define future actions.

  • What were the objectives of the promotion? Were they in line with corporate strategy?
  • Was the target segment clearly defined? Were prices and conditions correctly set?
  • Was price elasticity properly well understood? Were competitive reactions correctly anticipated?

Margin review

A step further, is to run sensitivity analysis, by simulating business impact in different scenarios with clear underlying assumptions.

Example: The assumption was a lost of 50% in monthly quantity, when target price is maintained, i.e. no discounts offered.

Simulations showed that while having some lost in market share, the company would actually end up with higher profits with better price!

Read complete article here:

Create impact with pricing analytics | LinkedIn.

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