on 09 October 18
Selling is the only way a business can grow. When you talk about selling, pricing of the product or service is very important. Under price a product and you may incur loss, but if you over price the same product you will lose a significant number of customers (some loyal ones too). So, pricing strategy for any business is immensely important. Statistics suggest that even 1% rise in the price can provide 8.7% rise in the profits (assuming that there is no loss of the customer volume). Pricing is both essential and sensitive, both at the same time. Backed by the statistics it can be claimed that more than 30% of the pricing decisions are wrong. When there is a wrong pricing decision the company suffers significant revenue loss.
How important is it?
Though there is a lot of customer related data flowing into a company but the companies fail in analyzing them. They fail to seek useful trends from the data collected from multiple channels. Though analyzing the data flowing in is not as simple as it may sound, it needs experience to make the right predications. When the big data is analyzed well it can gift a company with a profit that would weigh millions of dollars. On the other hand, wrong suggestions can lead a company to its grave. This is why data analytics services are so important for any company.
Why Old Analyzing Methods will not Work?
- A key to success for companies is to understand the optimal price a customer is willing to pay. If he/she is charged more than that amount, the customer would move away.
- It is important to understand the pricing strategy of your nearest competitor. If your competitor is charging a higher price, then what is the company's USP (Unique Selling Point).
- Apart from this there are new players coming into your business sector, they will look to capture the market with their low prices. If you do not tread carefully, they will take over.
- Manual analyzing is a time consuming process. By the time you come up with a valuable insight from the data, your competitors will already have an edge.
- Manual analyzing is very tough; there is a high probability for faulty predictions. When it comes to an important decision for your brand such as pricing there should be no room left for errors.
Age Old Practices used for Price Hiking
There are thousands of businesses that still rely on the age old practice. When they have a thought about price they simply take into consideration the following factors:
- Costs to produce a product based on the economy
- Standard profit margins
- Volume of discounts
- Prices of other similar products in the industry
But these are generic ways to judge the prices of a product. They do not follow the science, which big data provides to the companies. When the customers complain to the companies they have only one excuse: high market prices (which is a lame one).
Tips to Manage Big Data
When you use the data analytics services from a reputed call center you will get best results. You will be able to make an informed decision regarding the price hike. But how does an outsourced call center go about the job? Read on to learn:
Listening to the Murmur: Companies do not have any dearth of data. They simply do not know how to use this data. They are more inclined to manage the data, rather than using it for better decision making. This is where the professional services can help you. The professionals can give you new figures to work with such as the broader economic situation, preferences of products and negotiations done by the sales representatives. They can listen to the murmur of customers from the data.
Technology Implementation: There are many companies who do not want to adopt new technologies. They feel the manual way to analyze data will do the trick for them. What they fail to realize is that there are new channels emerging every day. So, manual analysis of data is both time consuming and very costly. Using automated systems is: ask of the hour. These systems can capably identify the narrow segments, determine the factors affecting the value of products and match these with the historical transactional data. It allows setting of prices backed by the data. Automation makes tweaking data very simple, it can be seen from various aspects.
Infusing Confidence: When there is a price hike, the sales reps cut a sorry figure. They are the ones who have to answer all the questions. At times they have to provide generic answers due to lack of understanding. They have no idea why there was a price hike. With data analytics services you can extract all the data and arrange for a training session. When the sales reps are explained why a price hike was required they will feel confident in answering the customer queries.
Such analytics services are sold by hundreds of companies, but your biggest challenge lies in identifying a reputable outsourced call center and trusting it.
This blog is listed under Data & Information Management Community