Introduction
How well do you know your competitors’ pricing strategies? Are your pricing strategies competitive for the market you’re in? How quickly are you able to adapt to changes to your competitors’ pricing?
90% of customers turn to the internet to find the best-priced product. While the UK continues to face a cost-of-living crisis. Price-consciousness amongst consumers requires a smart and often quick thinking when it comes to setting and adjusting prices.
Effective pricing can be the difference between your market share growing or shrinking. It can affect the way consumers think and feel about your products and services, particularly in comparison to others. Your price point can give your brand a sense of prestige and desirability. It makes it feel like the best value in a crowded and competitive market.
Changes to product pricing can create fluctuations in the market too. If one of your competitors drops their price or introduces promotional-based pricing, for example, consumers may switch brands, impacting your revenue.
Understanding the pricing landscape can offer you a big advantage. While a lack of understanding can lead to slow reactions that leave you playing catch up.
Introduction To Competitor Price Tracking
In recent years, competitor insight (or competitor intelligence, as it’s sometimes referred to) has been adopted by businesses large and small as a way to understand what competitors are doing in the market and how they compare. One of its most valuable capabilities, alongside monitoring product development and marketing activity, is competitor price tracking.
Understanding how your competitors price their products or services gives you a strategic advantage, allowing you to make informed decisions about your own pricing strategy.
Competitor Price Tracking For Businesses
Competitor price tracking is the process of monitoring the price points and price changes of identified competitors and competitor products.
Traditionally, this process was carried out manually. An organisation would ask someone in the team to visit competitor websites one by one to track and compile pricing. This time-intensive endeavour made it hard for organisations to respond quickly and effectively to competitor price changes.
In recent years, this process has been transformed thanks to price monitoring software and automated competitive intelligence software.
The latter tools track competitor websites and other online activity in real-time. They produce live data about competitor pricing, sometimes presented in graphical form, that can be analysed and used to inform your pricing strategies. In a previous article, we compared both types of software within an enterprise setting.
The 4 Key Benefits Of Competitor Price Tracking
1) Understand how your pricing compares
Are you the most expensive? The least? Or somewhere in the middle? How does that compare to your direct competitors – those with products and services similar to yours? How does it compare with new entrants in the market? Or indirect competitors such as those who compete in different territories?
A clearer understanding of the pricing landscape in your market means how you set your price points is fully informed. It eliminates guesswork and the use of inaccurate data, which can incur significant financial costs. It drives you to become more efficient as an organisation, finding ways to reduce costs in order to offer the most competitive pricing.
2) Understand how your pricing compares
If a competitor introduces a new price promotion or adjusts its price in some way, how soon do you normally find out about it? How quickly are you able to respond? And what impact will that change have on your sales in the meantime?
Slow responses – whatever form they take – can put you on the back foot and give your competitors an advantage.
With automated, real-time competitor price tracking, you learn about changes as they happen and see a live picture of the market in real-time.
So, instead of being slow to react, you can adjust quickly. Maybe you have a promotion of your own you can bring forward.
Or perhaps you can watch and learn from their success or failure before making your change. Or change your marketing messaging to promote the extra value of your offering.
3) Identify and plan for trends
Price tracking isn’t just about seeing what’s happening in the here and now. Having a complete record of price changes for competitors over a sustained period of time can make it easier to identify trends you might otherwise have missed.
For example, maybe certain competitors adjust their pricing or launch promotions at specific times of the year. Or are adept at adapting to external factors. Or perhaps there’s a growing trend for more price-based incentives across the market that you’ve yet to partake in.
Whatever it is, having the ability to view price changes at micro and macro levels can inform your pricing strategy. You’ll be able to prepare and get ahead of any trends – as well as the competition.
4) Gain a competitive advantage
While price tracking is growing in popularity, it’s still relatively early in its adoption. Those who haven’t started using it often rely on their own past successes and failures – and sometimes outdated market data – to make their pricing decisions.
By signing up for a competitive intelligence tool and tracking competitor pricing, you can make data-driven pricing decisions that are easier to justify and more intelligent. You’ll be able to adjust faster than others in the market to gain and maintain an advantage when it comes to growing sales and retaining customers.
Competitor Pricing Tracking: The 5 Key Steps
Price tracking works differently from tool to tool. At WatchMyCompetitor, the approach is designed to be simple and easy to follow:
1) Clarify your goals and expectations
Being clear on what you want or need to achieve will keep your approach focused on what matters. That means more time to analyse and draw conclusions from the data and faster response times.
It’s also important to understand what your competitor intelligence tool (in this case WMC) can or can’t do. You may learn about features that could provide you with additional insights that give you more context behind pricing changes that are taking place.
2) Identify who and what to track
As part of the set-up process, you’ll need to define which competitors and what activity you want to track. This should be determined by your goals and market. In terms of competitors, this typically falls into three categories:
Direct competitors – those with similar products or services who compete for the same customers in the same territory.
New entrants – those who may target other customers now but have the potential to become direct competitors
Indirect competitors – those that either compete for the same customers with a different proposition or have a similar proposition but compete for different customers, such as a sector specialist or an organisation in a different territory.
In terms of what to track, this can cover any relevant price points. In some sectors, this is straightforward – there may be a single price to track. For others, the pricing may be tiered or based on the number of users. In addition, you may want to track ad-hoc or seasonal price promotions and discounts for specific groups such as the police and NHS workers.
3) Access and analyse your price tracking data
Once you’ve set the parameters of your tracking, pricing intelligence will start being collected. In the case of WMC, a dedicated market analyst will make sure you only see the most relevant data, cutting through the noise and giving you more time to analyse.
You’ll need to decide who has access to your intelligence dashboard. We recommend keeping this limited but sharing intelligence with as many stakeholders as necessary. The dashboard presents the data in graphical form, allowing for quick conclusions to be drawn.
4) Sharing your price tracking intelligence
Competitor price tracking is only valuable if your intelligence and conclusions are seen by the right stakeholders and they’re mobilised to use it. This could be people from product, marketing and sales teams as well as senior management and the board. Ultimately, the ones who’ll find it most useful will be those who make the key decisions on price and promotional activity.
Find a competitor intelligence platform that integrates with all major communication and data visualisation tools, including Outlook, Slack, Teams and Power BI. That means you can share the intelligence in a format that’s familiar to everyone in your organisation. You can set up period alerts or share manually from the dashboard.
5) Mobilise your organisation to use price tracking effectively
It’s not enough just to share price tracking data and hope for the best. Your organisation needs to be given the processes and permissions to put the intelligence to good use. Setting expectations around the need for data-driven decision-making is often key.
Your price strategy should be built on data, so that there’s clarity and consistency around the decisions taken. Important competitor pricing changes should be communicated quickly, while periodic reports with conclusions should be shared with relevant stakeholders.
Price tracking can help you become a smarter, faster-acting organisation so that you’re better placed to protect and grow revenue.
FAQs
1) How can competitor price tracking benefit my organisation?
Competitor price tracking gives you a competitive advantage. By monitoring changes to competitor pricing in real-time, you’ll be able to make smarter decisions faster and react positively to trends.
You’ll be able to make your price points more competitive or even just tailor your brand messaging to reflect the extra value you provide. All of this will help you to grow your customer base and sales, increasing revenue and profitability.
2. How does automated competitor price tracking work?
Automated competitor price tracking uses software that monitors your competitors’ websites and online activity. These tools collect real-time data on competitor prices, which can be presented in graphical form for analysis. By automating the process, you can save time and resources compared to manual tracking methods.
The software provides you with up-to-date information on competitor pricing, enabling you to make informed decisions about your own pricing strategy.
3. Can competitor price tracking help me identify pricing trends?
Yes. By tracking competitor pricing using intelligence software, you’ll build up a clear picture of pricing across the competitive landscape. Alongside individual pricing strategies, you’ll be able to identify trends such as increases and decreases in pricing, promotional pricing and other changes.
By setting your competitor intelligence platform to track other market insights, you’ll also gather the context that may be informing any price changes as well as understanding how consumers are responding to them. All of this will help you to adapt and optimise your sales, marketing and pricing strategies.
