Online businesses are booming lately and it’s probably because of the global pandemic. People are finding ways to make money through the internet and the entire branch is growing like never before. As we all know, behind each successful business nowadays there’s sophisticated software doing all the complicated things in the background.
One of those programs is responsible for price optimization, which is crucial for the success of a business. As we all know, the best way to attract customers is by providing competitive prices, not too low and not too high, but in order to do so, you need to be aware of what your competitors are doing.
This sounds easy to do in theory, but when you realize the number of other online retailers you need to follow, and adjust your prices accordingly, you’ll come to a conclusion that doing this is impossible without a computer helping you. That’s exactly what we’re going to talk about in today’s article, so bear with us as you’re about to learn new things.
Price optimization software saves you a lot of time
As a business owner you need to focus on other important things, so spending all of your time constantly tweaking and changing price tags on your website is definitely not a good idea. So, investing in this software will allow you to use your time for something else, such as properly advertising your store or building partnerships. Leave the math part to the computer, that’s what they were built for after all.
As you know already, there are multiple different companies developing such computer programs, but it’s difficult to choose the right one due to so many of them advertising as the best. This is why we’re advising everyone to choose based on functionality. For example, Intelligence Node’s price optimization software lets you edit your pricing strategy in real-time. For more details please visit here.
The software helps you keep track of numbers with incredible speed
Not only that it’s insanely time-consuming, but it’s also impossible for a human to keep track of all the prices changing on the market. If you have a larger store for example and you are selling all sorts of items from different categories, you’ll be unable to keep up without price optimization software. Let’s say you’re selling graphics cards for example.
The value of a certain minable cryptocurrency goes up and all of a sudden the entire market raises the prices for the GPU’s, which is the current scenario by the way. But then mining profitability drops and the prices for the GPU’s drop as well. So who’s going to adjust all of this every single day if not the software? You’ll go crazy trying to keep up with the changes, and if you don’t change the prices and adjust them according to the market, you’ll chase away the customers.
By adapting your prices according to the market you’ll drive traffic
Nothing speaks professionalism more than prices that adapt according to the latest market changes. If you are lagging behind with something the customers will notice it, and then they’ll think your other prices are simply not right as well. You don’t want to leave a bad first impression when someone enters your store. But, that’s not all. By adapting prices with automated software you also optimize your profit, minimize your losses and nullify your risk. Experts describe diving into the world of online retailing without such software as playing darts but blindfolded. Your price choices will eventually hit something but it won’t be the board. You want to learn more about the technical part? Let’s take a look at these benefits.
What actually the price optimization software does in the background
These are the things that are crucial for the success of your online retailing business, and they are all provided to you by the software for a real small investment price that’s a total game-changer later on.
- Machine learning outputs
- Customer survey data
- Previous sales and price tracking
- Operating costs and demographic data
The best thing about it is that you can pay for a subscription that can last only a month, and if you don’t like it you can cancel at any time, although there’s barely even a chance that you won’t see increased profit by utilizing technology in your workflow.
Still not convinced? Let’s take a look at these statistics.
According to a research done a few years ago, the average company spends only about twelve to twenty hours per year for their price optimization strategy, which is nowhere near enough for a successful business. But, that’s still better than the other part, those who simply try to guess the price instead of doing research and basing their decision on accurate data.
Avoid the cliché “high price then discount” strategy, it doesn’t work
Companies that don’t dedicate any time and effort to price optimization tend to overprice their products thinking that’s what’s going to yield the most profit. When they see that their strategy isn’t working at all, they start relying heavily on discounts, which is another awful thing to do. First, your customers will already be someplace else, and second, you’ll sell your products for much lower due to the discount compared to if you simply used accurate data to optimize the price on time.
Knowing your customers is fifty percent of the optimization
Knowing your customers, what they want and how much they are willing to pay for it is crucial for forming the right price. But, this data also cannot be gathered by a person. We need computers and we need tons of calculations as well as tracking. But even the “perfect” strategy isn’t as perfect when you see it in action, which is why you need to be constantly tracking the progress of your business, your profits and your losses on those bad days. And who’s going to do that for you? The computer, of course.