Competitor prices monitoring: how to make price strategy for your business
Competitor prices tracking tools: software and other stuff.
Pricing strategy for your business can be built in two ways:
- From the commercial strategy (top-down);
- From your transaction, competitor and customer data (bottom-up).
The first way implies that you calculated all your expenses, associated with the product, and made a selling plan with the certain prices included. The second way is more flexible. You analyze the selling statistics, customer behavior and competitor prices to define your price strategy.
As a rule, most of your customers compare prices of different distributors and sellers. It doesn’t takes not much time nowadays to open several a few browser tabs and make run a quick search onf a product you need on different marketplaces. Besides, each of your customers has likely had the experience of buying the same product some time in the past. It means that people always have some expectations about products and prices; they already keep a good, normal or average price in their consciousness before buying. If your current price fits their idea of a good price for this product – congratulations, you just made another sale!
If this logic is correct, our key question is to find out how do customers perceive the price and the value of a specific product. Here the competitor prices monitoring comes into play.
By monitoring competitor prices we see the same things as our customers and get the same information they do. In the aggregate, it helps us to get a better understanding of what is a good price for a product in a mind of our customer is.
Competitor prices tracking tools
Before you start searching the for appropriate software for scraping prices, you need to formulate and describe your current pricing model. What is your marketing niche? If you sell Volvo, you definitely don’t compete with Lamborghini. If you sell used computers to the offices nearby, you do not compete with the sellers of top-gaming platforms at in your area. Find out who is your true rival at in the marketing warfare is.
Next, decide what aspects having influence on prices should be involved into your research to draw the most realistic portrait of your rivals. Describe your competitors:
- How do they build customer relationships?
- What marketing actions do they start?
- Who are their main customers?
- Which social networks are presented among their marketing tools?
You always need to keep in mind the answers to the same questions for your company, so take into consideration the general information about your competitors too.
Compare your product assortment line-up against competitors’ listings. Especially pPay specific attention to the products that were recently added to their stores. Figuratively speaking, Iif everyone is selling Tesla and your warehouses are full of Volvo, maybe you have already missed some trends.
And finally, compare prices. Make a selection of your key products and calculate the price index for each of them. To measure the price index for a certain product – let’s say Volvo XC90 – divide the cost of the competitor’s Volvo XC90 by the cost of your store’s Volvo XC90 and multiply it by 100.
The set of relative rates – price indexes – will help you change your prices reasonably. It doesn’t always mean always and only reducing the price. You may find out that your price is too low comparing to your competitors’ and it can be increased without prejudice to your business.
Here are some more ideas to calculate and think of:
- The price index over the entire market and your deviation from it;
- A common rate of price index change in the historical courseperspective;
- Your price ratio of price to the number or to the gross amount of sales.
And don’t forget that there is no rule telling you to keep the average price or the lowest price as possible. A lot of circumstances affect your pricing strategy, not only naked numbersbare figures, math and statistics.
H2. Competitor price monitoring software
There are several options to choose from if you want to solve the issue of competitor prices monitoring automatically. The criteria of software choice are the following:
- Price – it is assumed that you get the constant access to a price monitoring service, so you can compare the monthly costs of different solutions. Commercial information is expensive, so costs may range approximately from 70 to 400$ per month depending on the certain software, scraping speed and amount of data you need.
- Data volume – how much data you need is a rhetorical question. On the one hand you may take the information from a couple of the most popular online stores, that covers 80% of the market, and it will be more than enough for prices monitoring. On the other hand more data will enable the better-informed pricing decisions.
- Accuracy – sometimes data crawlers make mistakes as they deal with thousands of cases and formats of data presentation. Error processing and data verification is an important part of price tracking.
- Speed – depends on the technology of data crawling, but the common rule is that faster data extraction requires extra costs for the service. They should pay for proxy servers (IP changing) and high performance computers to work in a hundreds of parallel threads; therefore they raise the prices for the data you want to get faster.
- Assistance in making decisions – by solving the problem of getting the prices data from different sources you find yourself facing a new issue: how to deal with the millions of data rows you paid for? The ability to make data slices, to get the precious information from the endless stream of data – that really helps to make management decision considering your pricing strategy. That is the thing you actually pay for. Necessarily and It is always necessary to think about the connection between the dataset at hand and the reality of your business and to find out beforehand how the software will assist you in this case.
- Safety – if the service uses your authentication data or any secure information from your side, try to make sure that it will not become the property of third parties. Chose the reliable solutions with a good reputation.
Below is a short overview of some competitor price monitoring software.
Brainbi – competitor monitoring tools for advance price analytics. It scrapes products data, shows you the dynamics and sends notifications on to your email if the competitor’s price changes.
Octoparse – modern scraping software that allows you to keep an eye on all products of each competitor and extract data from different web sources by schedule.
Import.io – software solution for to automatically and routinely gathering of reliable and accurate data from any e-commerce website.
As well as analyzing your internal business processes, competitor prices tracking makes your company competitive, especially during a crisis. Working with modern data extraction and prices analytical software helps you to improve the effectivity in relation to other players and take a confident market position.