It comes as no surprise that when you’re operating in a crowded business landscape you need to pay attention to your competitors’ product offerings and pricing strategies. Even if you don’t have many direct competitors with your exact value proposition, you need to think in relation to your customers’ next viable alternative to your offering. If you’re not actively tracking the state of your industry, you can price yourself right into irrelevance.
Whether your selling products through your e-commerce platform, offering an innovative new SaaS solution, or running a rental car agency, your pricing strategy will depend on several key factors (ie: cost of goods sold, supply chain, distribution, customer segmentation, etc). However, an oft-overlooked element of your pricing strategy is the impact a competitor may have on your sales. If you’re competing on price or other less differentiating factors, a one-time promotion, seasonal sale or price dump in your category, the longer it takes for you to figure it out, the more revenues you stand to lose.
Imagine for a moment that one of your direct competitors added a new package option to their pricing page, what’s the first thing you want to know?
You want to know WHY, right?
Perhaps because they uncovered a hot new segment or recognized a gap in their current pricing model that immediately bumped their revenue. You may not rush right into your website and update your pricing strategy, but it should be at the top of your agenda for your next team meeting. By staying alert to the changing market conditions, competitor offerings and their pricing strategy, you protect your revenues and ensure your long-term strategy remains sound.
Let’s take a example in the image bellow. You can see how Acme updated its pricing page by adding a new plan named StartUp, which fills a gap between their existing Free and Basic packages. But the question remains: WHY?
Maybe they were facing too many users who didn’t want or need as many Alerts as the Basic plan included. Maybe they realized they can convert more users from their free plan to a paid plan by adding an intermediate one. You may not know for sure, but if Acme decided to create a new plan they definitely had a reason for it. By spotting the update early, you can react faster, investigate deeper and take the proper action to stay competitive.
The real reason why competitor price tracking and pricing strategy is so critical is due to the speed of business in 2016. The digital landscape is littered with the carcasses of companies that didn’t keep an eye on their competition or closest viable alternative. They may have even had the best product in their class but their lackadaisical attitude towards their competitive landscape ended up becoming their reason for their demise.
The technology and business worlds are only going to move ever faster so you need to be even more attune to the dynamic conditions in your industry. Manually checking all of your competitors’ websites, landing pages, search ads and social media profiles for updates could take a small army.
If you haven’t already, it’s time to take Kompyte for a test drive. When you put Kompyte to work for you and set your competitor analysis on auto-pilot, you’re free to focus your creative energy to more inspiring objectives, like staying on the offensive and driving innovation in your field. So get off your heels, keep your eye on the prize and let Kompyte do what it does best: track your competitors in real-time and alert you to any relevant changes.