Home/Services/Price Optimization

Price Optimization establishes the prices that will maximize your business results. It is a highly scientific process based on statistical analysis of historical data and your customers’ buying preferences.

Price Optimization is applicable to B2B and B2C as well as businesses that sell through two or three-step distribution.

If you are asking yourself the following questions, it’s very likely that a Price Optimization with PriceGain can help you improve business results:

  • How do we price our products or services for maximum profit?
  • What market share will we achieve at different price points?
  • How much profit do we have to give up in order to buy additional market share?
  • What will the impact on our revenues and market share be when our competitors change their prices?

PriceGain helps companies optimize pricing across multiple product lines and sales channels for maximum profitability.

Our Price Optimization approach answers these questions and gives you a structured method and tools for continuously setting the right prices going forward. You will be able to respond quickly to changes in the marketplace.

Price Optimization is an excellent approach for companies with the following:

  • Large numbers of transactions
  • Good historical sales data

We’ve found that many companies make pricing decisions without sufficient information on how the new prices will affect gross profit, revenues, and market share. Unfortunately, this means that speculation (“gut feel”) rather than facts guide the pricing process.

Optimize your profits, revenues and market shares.

The purpose of Price Optimization is to find the optimal prices for your offerings based on your business objectives. For example, if your primary goal is to increase profits, we will find the best pricing to achieve that.

If you want to increase your market share, we will help you find the best way to price your goods and services so that you make the desired increase with minimal reductions in profitability. Our process improves business results through a clear understanding of the relationship between market shares, revenues, gross profit, your prices, and your competitors’ prices.

Price Optimization tool lets you run different market simulations.

We start a Price Optimization project by measuring the changes in demand from changes in prices. We typically use a conjoint analysis approach, often combined with an analysis of historical sales data. We then develop a Price Optimization tool based on our proprietary model and the specifics of your business.

The tool is custom software that includes constraints and relationships between prices, costs, revenues, and profit. We work with you to set new prices by simulating different scenarios and connecting the results to your current business strategy and market. We help your pricing people learn how to use the tool so that they can continue being effective and find optimal prices as market conditions change.

Read more

Read the blog post by Göran Skugge about why Price Optimization is so important and why Conjoint Analysis isn’t enough and should be combined with a Price Optimization tool: Why is PriceOptimization necessary? Isn’t Conjoint Analysis enough?