Pricing (and accurate market planning) is typically the best lever for increasing profitability.
For the S&P average a 1% increase in price will see EBITDA jump by 9%. All other improvement efforts give lower returns, targeting variable cost at 30% less, adjusting volumes more than 60% less and targeting fixed costs a whopping 80% less impactful on EBITDA.
But pricing is complex. All but the simplest businesses have many different geographies, kinds of customer, levels of market volatility and influences from government regulation to competitors. And it is dynamic with an organization having to constantly sense and adjust to changes in the market including any dynamic pricing related to business closes in B2B models.
Pricing Models can be:
- Strategic (pricing models of subscription, usage, freemium etc),
- Product related (competitive positioning, value mapping and pricing variations related to specific features or benefits) or
- Transactional – decisions at point of sales or point of deal
Market Planning is usually performed well in advance of product launch and needs to be constantly adjusted in the face of changes. And of course, the highly skilled personnel who have the knowledge to be able to support pricing planning and market planning are scarce and put constraints on a business’ ability to be as agile as desired. This combination of complexity, agility, the scale of attributes to be considered and with a need to give your scarce personnel tools to help them be better at what they do and be able to do more of it, makes an ideal application for AI solutions.
Price-It-On is an application built on EazyML, one of the most innovative AI platforms. It brings AI, ML, Natural Language and Gen AI technologies you can trust to meet the Pricing and market planning challenge, proven over 9 years and 1000’s of clients worldwide in global to local companies.