Many companies spend so much time analyzing their internal processes that they forget the importance of being aware of competitor actions, action and price monitoring. This view helps to understand how companies are positioned in the market, how they behave at different times, such as the crisis, enabling new processes to improve or match business performance in relation to other players.
Of course, in addition to competitive price monitoring, other points must be noted – if a customer praises the services of a competing company through an appraisal, this is a sign that yours may adopt a similar process. On the other hand, if they complain about the competition, you can focus on providing solutions that address this deficiency. The important thing is to keep an eye on staying competitive!
Here are some tips for improving your performance within the marketplace:
How to monitor competition prices
When monitoring competitors, it is essential to do so as if you are analyzing your own company. Therefore, the first step is to define which points will be evaluated: how do the marketing actions, how does it build customer relationship, which social networks are present, which are its main customers, among others.
In this way, it is possible to gather a volume of information to understand what the competition is doing. It is also to evaluate what should be done to improve internal processes in order to improve results and ensure the satisfaction of old and new customers.
The importance of competitive price monitoring
In both physical stores and e-commerce, the purchase decision of many customers revolves around the price practiced by the shopkeeper. After all, potential consumers today can search through different websites, list which ones make the best offer, and choose who offers the cheapest value.
Given the importance of price when it comes to selling, you should have control over price relative to the competition. When you have few products and low competition, it is easy to do this analysis. But when it comes to many products in a highly competitive market whose prices are constantly changing, you need to have business analytics tools.
Business analytics tools for price comparison
Business analytics tool is a type of application which retrieves data from multiple business software and combines the data at one place to be examined and analyzed. Some organizations use multiple business analytics toolssuch as spreadsheets with applied functions, statistical tools, complex data driven tools and analytical modeling software. At the same time, these analytics tools offer the enterprise a full outline, important insights and business thoughtful idea, so, they can make smarter business decisions regarding corporate operations, customer transformation and so on.
Using this tool is the easiest and fastest way to know what values are being practiced for a particular product or service. Hiring business analytics toolsto monitor competition can bring more complete and comprehensive results, such as:
- Positioning your products against competitors, as well as what are the highest, lowest and similar prices;
- Price increases and decreases over time due to market changes or new trends;
- Which products does your competitor offer exclusively, which ones do not have stock, etc.
- Based on this information, you can more assertively decide what is the best price margin to work on so that it is not too low to hurt profits, nor too high to scare the public.
Knowing these points is also essential for defining catalog changes or negotiating with suppliers.
Other points that should also be analyzed
Price is important, but not everything. You also need to consider other points that differentiate you and your competitor within the marketplace, for example: how often does it launch new products or lines, how complete is your mix, what are your payment terms, if freight rates are more attractive than yours, among others that may influence the customer’s purchase decision.
So start this analysis by looking out for competitor promotions. Retail shopkeepers often take advantage of holiday dates to sell more. So, you should also be aware of these opportunities. However, don’t do exactly the same as the other store does, invest in something different.
Check what keywords your competition is using and include them in your channels like websites and blogs.
Browse competitor sites and drill down to see how they expose your offerings, which visual languages they use, which products stand out, and which ones appear least. Checking all of this can bring ideas to apply to your store. However, do not devote much of your time to this; one hour per week is more than enough. After all, the focus of the job should be on your services and meeting the needs of your customers.
With all these price monitoringactions, you can have a competitive advantage over your competitors in the marketplace. If customers strive to discover the differences between you and your competitors before making a purchase, you should make even more effort to know in which context your business is located, and thus be able to make the best decisions for your business.
The importance of monitoring competitive prices
What determines the price charged on products and services? The raw materials, labor, infrastructure and energy used in manufacturing; the taxes paid; exchange rates; market demand and of course profit margins, right? For in this relationship, there is still a very important factor: the values practiced by competition, especially when it comes to e-commerce.
Consider this: If the market is already fierce in traditional commerce, the competition among online stores is even greater when it comes to price, since the customer who visits your site is just a few clicks away from other e-commerce.
Of course, your service and the quality of what you offer are also evaluated by the consumer, but in the digital market, penny differences or payment terms are decisive for the customer to choose the “next door” business.
In addition to ensuring a good conversion rate, keeping an eye on competitive prices is also a great strategy for understanding why consumers aren’t buying with you, aligning your prices with the marketplace, and finding new business opportunities. Therefore, understand the importance of implementing competitive price monitoringin your company.
Practice pricing compatible with your market
Very high prices often scare away online consumers, especially those who have never bought from you and therefore do not know your business. However, offering prices far below those of competitors can be a hit in the foot, as you destroy the value of your brand. This requires knowing the “recommended” minimum price for products and services in your area.
If your price is in line with that of competitors, you will not lose sales or disaggregate value to your business.
Know your competitors and the most price sensitive products
In addition to price, other factors influence the customer’s choice of their online store or their competitors. So by knowing the prices of other companies that work in the same market as you, you can know exactly who your direct competitors are, that is, those who are focused on the same type of consumer and work with a product mix similar to yours. It is with these businesses in mind that you must devise strategies to earn by price.
It is also necessary to identify which products are worth cheapening, as they are more price sensitive. This is because some goods, however small the amount offered, may not generate an increase in sales.
Identify ground rules for lowering or raising prices
In competitor price analysis, in addition to recording market values, you should also consider promotions, payment terms and the product mix of competitors. These factors will help you identify the best time to raise or lower your prices and which products.
For example, if you find that one of your competitors is out of stock, then this may be the time to raise the price of this item in your store. The idea is to earn a little more in the profit margin. Generally, when a product is out of stock, a 20% to 30% higher readjustment in the price of the item is common.
Another important point is that by knowing when your competitors launch offers or discount campaigns, you can anticipate potential losses and work with promotional actions as well. Just be aware!
Reduce operating costs
There is no need for a dedicated team today to gather competitive price monitoringinformation, just have smart business analytics tools.
The measure reduces operating costs and ensures more agility, especially in online retailing, where, depending on the niche, e-commerce may readjust the prices of various products more than once a day.
The business analytics toolsalso help you negotiate with suppliers, as you have more neat competition data at your fingertips, and you can tell, for example, if it is burning prices or missing items.
To have competitively priced products and services in the market, be sure to look at the competition. If you don’t have a pricing strategy and tracking tool yet, don’t waste any more time!