Price optimization is an essential part of running any small business. Just a 1% improvement in price can increase operating profit by 11.1%. Price optimization is the practice of utilizing data to help maximize profitability and predict how customers will respond to changes in price. That being said, what data is needed to start the price optimization process?
Although there are a few different approaches to price optimization, most of the methods require collection information about:
- Collecting historical data such as operational costs, transactional data, and product or service costs related to the product or service.
- Comparing competitor pricing to what is the relative attractiveness of the different price points in your product or service.
Price optimization can bring immediate and long-term benefits to an organization. If you are interested in learning more information, check out the infographic below. It provides more tips on price optimization and the steps to take if you are interested in improving the price of your own business.
Infographic created by Clover Network
