It seems simple to determine when we should reduce the price of our products; we sell at a price much higher than the competition and we must reduce them, but when we can increase them?
To choose the right time and maximize our profits, we will need to use competitive monitoring software, also known as Pricing Intelligence Software.
This software will present us with a comparison of our prices with our main competitors, indicating the percentage difference between each one. In addition, we will be able to consult other data such as the availability of the product.
So when can we increase our prices? Let's see what our pricing strategy should b like:
- If a product is no longer in stock in our competition, we can increase its price.
- If we have the lowest market price for a product, we can increase it up to slightly below the next immediate competitor. Selling cheap does not mean selling more.
- If the monitoring tool tells us that competitors are constantly raising the price of a product, we will respond in the same manner but placing ourselves slightly below.
- If a product has very different prices, and the difference between the lower and higher price is very large, we can increase our price to an intermediate value.
In conclusion, monitor and analyse your sales until you find the maximum price that your customers are willing to pay for your products.