What is Price Intelligence and Uses of Price Intelligence for Your Business

In the past, when there was no existence of digital marketing or stores, companies used to track their competitors’ prices by sending in their men and through surveys. This arrangement was quite effective due to the lack of mass-scale globalization and the number of competitors. 

But today, with the growth of eCommerce, the number of competitors and the scale of operations have increased to their massive sizes. To sustain a business in this competitive market, your business needs price intelligence. 

Although the name “price intelligence” is pretty self-explanatory, there’s more to it that you must know. 

What Is Price Intelligence

Intelligent pricing is not something new. Businesses have always been setting their princely smartly by assassinating their competitor and market behavior. But price intelligence is a relatively new concept that requires “Big Data” to facilitate. 

It also requires data scraping to harvest these price dynamics and train the machine learning model. However, you don’t have to understand the technical part as much as you need to understand the business implications. 

In easier words, price intelligence is automating the process of changing your product prices according to your competitors’ real-time price information.

If you don’t have multiple products and numerous competitors, you may not understand why you need this kind of automation. Moreover, when you’re dealing with a product or two, you can effectively change prices according to the market. But when you have more, the issues start to surface. 

The price-changing requirements start to emerge more frequently and you’re left with no choice but to either take on a huge loss or go data mining. For instance, Amazon utilizes price intelligence every 10 minutes throughout their databases to remain competitive. 

How to Employ Price Intelligence

We don’t assume that you’re as big as Amazon or even eBay for that matter. For a small or medium-sized business like yourself, there are 4 main steps towards building a price intelligence model and strategy. 

1. ourcing the Machine Learning Model

Several competitor price monitoring tools are available to get started with price intelligence. But if you are lenient toward building a more permanent and customizable solution, you can develop your own effective model despite the investment and time it requires. 

2. Data Mining

Irrespective of whether you’ve built your model or have determined to go with a tool, you need to mine or scrape data from your competitors’ websites to feed the intelligent solution. But, while doing so, you may stumble. You may not be allowed to scrape data from the websites. 

What prevents your access is the IP filtering that your competitors may have implemented. You need to bypass this with rotating residential proxies that help you hide your original IP address and scrape the websites as legit users. 

A superficial issue that may also occur is the price breakdown and coupon details. In most cases, the details of shipping charges and coupon discounts aren’t accessible by these bots without going through the checkout process. Thus, you must mitigate it strategically. 

3. Training the Model

With enough data, you can train your model to react in the desired way when price changes are noticed. You may make it less or more sensitive depending on the type of product you sell. But, through the first few real-world runs, do keep a keen eye on its behavior before accepting the price change suggestions.  

4. Professionally Assessing the Changes

Always remember that your price intelligence model changes are only suggestive. You have to assess the recommendations very professionally and if possible, assess manually. If you see a major disregard for your policies or even a small mistake, don’t forget to use it as a training wheel.  

Benefits of Using Price Intelligence

Price intelligence can benefit a business in several ways. Although most of it’s related to making more money, some of them can be associated with a positive image of the company.  

Smart Pricing Boosts Sales

Let’s get the obvious out of your way first. 

In most cases, price intelligence recommendations are quite beneficial. Setting an optimum price can and will drive your sales higher; given that your product quality and marketing are equally adequate. 

However, price intelligence often recommends something that can be destructive to the brand image or profit. Do check that out before accepting the new prices. 

Price Intelligent can Increase Profit

More often than not, you lose out on profit by setting your product prices outrageously lower than your other competitors. The profit loss may come in the form of distrust or raw arithmetic. If your prices are too low, your customers may start distrusting your products, or you start to lose money for not charging enough. 

Price intelligence can mitigate the issue by recommending prices for your products that are both competitive and profitable. 

A Better Search Engine Ranking

It may come as surprising, but modern search engines take pricing very seriously to rank eCommerce websites on their shopping search results. It may not affect how your website ranks on normal search results, but if your product prices aren’t reflective of your quality or services, it may lower the ranks. 

With better price optimization, you can reach more customers through search engines. 

Product Addition and Deletion

No, your pricing intelligence model won’t recommend products that need addition or deletion. But, it can contribute to data analytics by generating pricing data that is a direct reflection of the current market scenario. 

If the demand for your products is gaining traction, it may suggest an increased price. And that should tell you if you need to introduce a new model in that segment to increase the profitability. 

If the price recommendations keep decreasing, you might have to delete the products from your inventory. 

Although it all comes down to operational decisions, price intelligence does help. 

The Bottom Line

Price intelligence is a smart pricing solution that recommends optimum prices for your products by assessing your competitors’ data. To employ price intelligence, you need a price monitor tool, enough data, and model training. It can benefit your business by boosting sales, increasing profit, enhancing search engine ranking, and managing inventory.