Companies that want to make it in the modern world should be keenly aware of all the intertwining factors that make them competitive. That means developing the best product possible, paying attention to customer needs, and marketing what you offer strategically so the news reaches those most likely to bite.
Pricing strategy plays a pivotal role in determining and improving your market position. Setting prices haphazardly or being the last to pick up on a brewing trend will leave even innovative and respectable businesses behind.
This article will introduce you to price monitoring, its advantages, and the tools to leverage its adaptability and predictive powers in your business’s favor.
What Is Price Monitoring & Why Do You Need It?
Regardless of its area of focus, every business operates in a dynamic and interconnected environment. There are competitors even in the smallest niches, and all vie for more profits and a larger market share. A comprehensive and agile pricing strategy is essential for better market positioning. Not having one means you’re blind to inefficiencies and can’t compete on a level playing field.
Price monitoring helps by providing systematic, actionable intelligence on competitors’ pricing strategies. It hinges on collecting countless data points on current and historical prices, past discounts, etc. With that knowledge in hand, you can react to changes in the market before they start eating into your profit margins. More importantly, price monitoring can highlight future trends (like special occasions such as Halloween) others might not be ready for. You can capitalize on such trends first and improve your standing considerably.
Price monitoring benefits
After a broad overview, here are some more concrete examples of how continued price monitoring can help you grow.
Faster data-driven decisions
Having real-time insights into competitors’ prices lets you adjust your strategies on the fly and remain competitive. You might not be able to match their price each time. However, you could prepare for a competitor’s price drop by offering something extra or more perks for returning customers to blunt their advantage.
Customer retention
When choosing their retailer, most customers value a combination of product quality and optimum prices the most. You can ensure the latter by being consistent with your pricing strategy. This doesn’t mean you have to undercut the competition for every product. Rather, you can gain renown by becoming a reliable business known for consistent and fair pricing regardless of market whims.
Balancing profits and incentives
Knowing how far you can push your profit margins while remaining competitive is among the greatest benefits price monitoring brings. For example, monitoring could uncover that you are offering the lowest prices for a product. Based on these findings, you might have room to raise the prices yet continue to undercut the competition.
The opposite can also be true. Let’s say you’re struggling to sell a product at its current price. Price monitoring can help you figure out how much you can discount it and when to not make a loss.
Setting Up Effective Price Monitoring
The digital age has made price monitoring more accessible, streamlined, and accurate. Even so, you’ll want to develop a comprehensive strategy to get the most useful results.
Before anything else, you have to establish your company’s market positioning. No one does business in a vacuum, and each competing business has a unique position. Some can offer lower prices and get away with it since their products or services are lower quality.
Conversely, others may have enough mindshare to charge more while offering comparable quality to yours. Figuring out where you stand will let you formulate pricing strategies without compromising brand perception.
Next, it’s time to choose which competitors to focus on. You’ll get more refined results by examining a few players rather than spending resources on tracking the entire market. These should fall into several categories to gain a complete picture. For example, it’s prudent to keep tabs on the market leaders as well as companies whose position you want to be in the short- to mid-term.
Concentrating on a handful of products first to get a feel for the process is similarly beneficial. You can then test the waters by adjusting prices for these products only. Such a trial run helps expose incomplete data or other problems. It lets you address them and tweak your tools while keeping consequences minimal. Once you’ve refined the monitoring process, you can expand it further.
Price Monitoring Techniques & Tools
With so many benefits, it’s unsurprising that companies are adapting price monitoring as a core part of their business strategy. They use different tools and strategies to do so, with varying degrees of success.
Monitoring prices manually is straightforward and not particularly effective. Even though an employee can carry out complex targeted searches, they’re slow and may not get access to the full range of data you need. Plus, such work is tedious for humans, so there’s a high possibility of error.
It makes more sense to automate such information gathering. More importantly, successful monitoring hinges on tools that help interpret as well as collect the data.
Web scrapers are among the most frequently used price monitoring tools. They’re intuitive since their interface lets you refine your search and pick which parts of a website to scrape. For the webs that restrict scraping and are especially difficult to get information from, some providers have website unblockers.
Raw pricing data takes priority, but they also make it possible to gather info like customer reviews. These make for a valuable secondary source when determining what you can charge while remaining on the customers’ good side.
Some websites and apps offer price monitoring as a service. They’re easy to use for beginners and may help you identify emerging competitors you weren’t aware of. Using them is a step up from searching manually. Still, nothing beats web scrapers when it comes to the scope and granularity of their results.
Regardless of the tools chosen, operating securely in the digital space is paramount, especially when handling sensitive competitive data gathered through price monitoring. Managing logins for various services—be it monitoring platforms, analytics dashboards, or internal systems—requires robust security practices. A fundamental aspect of this involves using strong access control.
Understanding what is needed for secure credential management is key; knowing what is NordPass, for example, reveals a tool specifically designed to help securely generate, store, and manage complex logins across different platforms. Ultimately, ensuring secure access to your price monitoring tools and the resulting data is just as crucial as the monitoring process itself.
