How Well Does Your Pricing Organization Learn From the Field? | Pricing Matters

Unlock latent potential with price experimentation
With every price quote or posted price, there is an opportunity to learn about the market, and in turn, improve pricing. Yet, a tremendous amount of the information is not captured, systemized or utilized, neither by people in pricing nor the algorithms they employ. The potential in learning from the untapped sources of field information can be tremendous.

To learn from the field, there are two kinds of tools that can be utilized: surveys and experiments. Let’s focus on the latter tool – price experimentation. Any time a price change is executed, there is a chance to observe results and learn. While any price change can be considered an experiment, price experimentation specifically refers to the changing of prices in an intelligent manner designed to yield as much information as possible at an acceptable level of risk. Price experimentation provides an opportunity to gain critical knowledge, learn from that knowledge and act to optimize price and ultimately impact margin and revenue.

However, price experimentation is vastly underutilized, and many organizations are missing out on the opportunity to unlock a lot of latent potential.

Learn by Example: Price experimentation success

To truly understand its potential, let’s examine a real-world example. Vistaar had the pleasure of working on a highly successful project with a producer of digital media where price experimentation was used to learn about market willingness-to-pay and ultimately resulted in tremendous revenue and margin growth.

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How Well Does Your Pricing Organization Learn From the Field? –.