Are your prices good enough to bring in customers, or are they too low, causing you to lose money? On the other hand, are they too high, making your customers go to your competitors instead?
Getting your prices right is essential to attracting customers; manually setting prices by adding margins on top of cost may work in the beginning, but as you grow, so does your cost. Raising prices to protect your profits can push customers away, but lowering them too much might not be sustainable for your business.
That’s where competitor price monitoring can help. By checking what your competitors are charging and what promotions they’re running, you can get valuable insights that allow you to adjust your prices and stay competitive.
Competitor price monitoring involves keeping track of the prices your competitors set for similar products. By collecting information on their pricing strategies, promotions, and customer interest, you can better understand how your business compares in the marketplace.
Competitors’ pricing data is collected, collated and compared against your products. You can then make informed pricing adjustments to ensure you stay competitive and profitable.
83% of consumers will compare prices before they make a purchase. A slight difference in price between your product and a competitor’s could mean the difference between winning or losing a sale.
By monitoring your competitors’ prices, you can quickly respond to changes, such as a competitor running a promotion, and adjust your pricing accordingly to stay in the game.
Competitor price monitoring enables you to price your products more effectively. It ensures that you’re not underpricing (leading to loss of profits) or overpricing (risking losing customers). With the right data, you can strike a balance that maximises your profit margins while still offering value to your customers.
Tracking your competitors also helps you spot trends and opportunities. For example, there is a popular product that you and your competitor both sell, but your competitor has run out of stock or ended a promotion early. In that case, you can take advantage by launching your own promotion, making the most of the situation, and diverting customers to your store instead.
You can build your reputation and establish yourself as a leader in your niche by providing value to your customers by consistently offering good deals and competitive prices.
Even though price monitoring is straightforward, there are a few common pitfalls to avoid:
It’s essential to keep an eye on competitors, but don’t lose sight of what makes your business unique. Your pricing should reflect the value you bring to customers, not just the prices your competitors offer.
Some fail to factor in competitor promotions or limited-time offers when checking competitor prices. Some brands have regular sales and promotions, having loss leaders and dropping their prices for a limited time then putting them back up again. You need to consider this when working on your pricing strategy.
Pricing trends change quickly. Without regular updates, you risk basing your decisions on outdated information.
Having competitive prices and having the cheapest prices are not the same thing. You may have unique offerings like superior product quality, customer service or exclusive deals. In that case, you can mark your prices higher, but price monitoring can help you make sure you don’t mark them too high.
Competitive price monitoring provides a data-driven extension to your business and provides insight into your competition and your customers. It helps you make informed decisions that provide value to your customers and optimises your profitability.
However, collecting and analysing all that data can be time- and labour-intensive. By partnering with a reliable price monitoring service like Spesh, you’ll get dedicated price monitoring specifically for you without the heavy lifting, saving you both time and effort so you can focus on running and growing your business.