The freedom of flexibility is why a dynamic pricing strategy is the solution you’ve been waiting for to take your business to the next level.
Dynamic Pricing Strategy
Businesses are now more adaptable and intuitive when it comes to revenue management, thanks to well-organized strategic systems. Supply and demand is a constantly fluctuating process. Adapting to unstable pricing is essential to maintaining the success of your business and customer satisfaction.
What is dynamic pricing?
Simply put, dynamic pricing is selling the same products and services to consumers at different prices based on current market demand. Unlike fixed pricing, which generally remains constant on a daily basis, dynamic pricing varies by day. This then increases across multiple price points based on the capabilities of the e-commerce platform.
Example of dynamic pricing
A great example of dynamic pricing is the hospitality industry. It’s no secret that many of the factors affecting the hospitality and service industry reflect the ongoing need for price flexibility. Think Booking.com or Airbnb where room and service availability are affected by the time of year, supply and demand, or season. Then all the extras offered by the host add up.
When someone wants to book a vacation rental, factors such as location or season change the pricing, which can then be adjusted to the per-night rate the person is willing to pay or add breakfast. However, allowing for customization of the booking or “dynamic pricing” results in a higher booking and confirmation rate.
If this sounds like a strategy you’ve been looking for that will change the way you run your business in the future and ultimately improve your profit margins, then Boardfy Dynamic Pricing Tool This is the solution you’ve been waiting for. It will help your marketing team ensure the most accurate pricing strategies are implemented across your various marketing and sales channels.
What’s even better is that if you don’t necessarily want automatic price updates yet, its ability to adapt to predicting the results in case you create automatic price changes can be seen from the indicative data collected. It’s a win-win situation.
How does dynamic pricing work?
If making money in the long run is part of your business plan, dynamic pricing is the way to go. The tool monitors your competitors’ activity as well as market price fluctuations, then makes adjustments to your pricing so you can stay competitive but also make more profit.
Dynamic Pricing Tool
A game-changer for the future of business success and staying one step ahead of the crowd. This data analytics tool is the solution to your stress. Working with a revenue management platform that specializes in making your business the best it can be, helps turn your dream of a successful business into reality.
Advantages of Dynamic Pricing
While the list of pros is long, this curated list of benefits is sure to help you in your decision making process to use a dynamic pricing strategy for your company’s anticipated future;
- Increase profits
- Flexibility
- Competitive adjustments
- Increase sales
- Allocate different positions
Disadvantages of dynamic pricing
However, this does not mean that it is completely flawless and failure-free (yet), but if you are aware of the other side of the coin, you will be less reactive and more responsive when a wrench is thrown into the works.
- Competitive Price Wars – Because you didn’t think your competitors would take advantage of your success, did you?
- Customer distrust – Feeling unsure of your company’s position can leave them confused, frustrated and in many cases unsure of the brand.
- Pricing seems unreliable and complex to customers.
Dynamic Pricing for E-Commerce
It’s no surprise that the online marketplace is saturated with products and services, so making money and increasing sales and revenue takes work. Therefore, your prices need to be just right for your customers so that they can get the best products at the best deals, and you can still make money. A dynamic pricing strategy can do this so that everyone comes out a winner.
Dynamic Pricing for Big Data
Succeeding in these highly competitive online markets means being well positioned and using your data analytics to be as sound as possible. This creates a customer-centric perspective but also creates a powerful pricing tactic for the company.
Amazon Dynamic Pricing
As one of the largest brands in the world, Amazon is the poster child for successful and effective dynamic pricing strategy techniques. Prices are constantly changing and adapting to market price competition including supply and demand. Price points often fluctuate which means that not only do they keep up with market trends, but customers know they are getting the best deals at that moment in time.
All factors taken into account
Providing service and value to your customers shouldn’t prevent you from adjusting your prices to ensure you stay within profitability. And when you have a pricing tool that automatically calculates prices and does the work for you, that’s even better.