Price optimisation finds the balance between ‘value’ for your customers and profit for your business. It’s about identifying what your customers are willing to pay, whilst ensuring you remain competitive and profitable. There are various pricing structures which can benefit from pricing optimisation, including initial pricing, discount pricing, and promotional pricing.
Understanding and adapting to changes in the market can be difficult when trying to define the optimal price for your products and services. This is often an ongoing battle for most companies. Setting a price too high can lead to slow stock (or services) turnover, whilst a low price means the business will miss out on potential profit.
Transactional data is key to developing and building a view on how your company currently prices various products/services. Our team will take time to understand your business process and the reasoning for your historical and current prices. Once we have this understanding, we begin to build features to feed into our AI System to optimise your pricing, which we can tailor to be product/service and customer specific.
THE TECHIE BIT
Peak’s AI System ingests your historical data, unifies the datasets, and builds a bespoke machine learning model, to predict the best price, unique to your business. The mathematical models can vary in methodology, and utilising a variety of techniques such as supervised and unsupervised machine learning algorithms, generalised additive models, ensemble methods, and more. We also look at price elasticity to evaluate how the demand will adapt to changes in the price. At Peak we, pride ourselves on our ability to explore different modelling avenues, in order to compute the optimal pricing prediction model.
Using your historical data and understanding your company’s previous transactional data, coupled with other data sources which capture changes in the market, a model is established to provide the optimal pricing structure for your products or services. Our AI System can retrain your model using real-time data, enabling you to provide the most up-to-date prices for your customers, helping you meet objectives and maximise your operating profits.