Far too often, we have companies seeking our expertise to ascertain their competitors’ competitive strategy vis-à-vis their pricing, as if this will provide the magical insight they need to help them maximize their own revenues. My advice: save the detective work for Colombo and forget about your competitors! Your bottom line profits should not hinge upon a competitive response strategy that reacts to your competitors’ price moves, where you surrender control over your revenue structure and end up locking your firm into a race-to-the-bottom pricing with the rest of the industry. Escaping this destructive cycle lies in focusing relentlessly on your customers rather than your competitors. If you’ve read the news in the last 10 years, you may have realized that your customers are the most informed consumers in the history of the world! They are utilizing every available resource, from various news and industry websites to trade magazines to word-of-mouth gossip to Oprah to… well, even your price helps them determine their perceived value of your product. They are better informed about their purchases than ever before, but I wonder if you are learning as much about them and how they view your products?
Here’s an example to help you understand the magnitude of the problem your organization is facing: you sell thousands of products to tens of thousands of different customers each and every day, which is equivalent to millions (if not billions) of distinct customer-product interactions every day – impossible for even the most experienced sales managers to analyze individually. Now grab a pen and some paper and write this down: every sale is an interaction whose revenue can be uniquely maximized! Most companies fail to detect the subtle changes in their customers’ preferences over time, leaving significant profits on the table. And hence the reason for the detective work we’re often called to do; companies don’t realize they have all of the necessary data to maximize revenues right under their noses.
The solution here is Scientific Micromarket Management, which makes it possible for organizations to assess how each customer values your product and offer exactly that price every day in every market. Sure, we may be talking pennies and nickels here, but if you multiply these adjustments by the millions of potential customer-product combinations, then multiply these daily adjustments over the course of a year, and you will realize the significant amount of impact this will have on your bottom-line. Capitalizing on these billions of tiny demand shifts with a dynamic pricing system more targeted than human intuition enables companies to finally understand why every single customer buys what they buy from you and what they are willing to pay for it every time. This is far more comprehensive than any pricing strategy; this is a complete revenue optimization solution. Your customers are getting smarter about you, I think its time you got smarter about them.