Determining profit-maximising prices for products and/or services
Organisations with World-Class Advanced Analytics & Price Setting Competencies:
Routinely conduct detailed pricing & profitability analytics on historical data to understand performance and its drivers at the transaction level
Have pricing structures and levels that are consistent with broader business goals and constraints
Incorporate an understanding of variations in both underlying cost structures and customers’ “willingness to pay” across geographies, products, distribution channels and customer segments
Predict the impact of price changes on business volume and benchmark actual performance relative to those predictions
Use predictive modeling to improve profitability by focusing on key profit levers such as pricing, customer retention and collections effectiveness