Price optimization enables companies to move beyond cost-plus pricing and determine the range of prices that could be charged for a variety of customers and products. Price optimization can increase current operating income by 1 to 4% of sales, which in many cases will translate into a 20 to 50% increase in operating income.
The most sophisticated optimization models available utilize highly sophisticated statistical tools and often, big data. You can buy pricing software that uses those sophisticated tools to help increase your profits. However, that pricing software can be expensive.
The good news is that you can improve your profitability with somewhat simpler tools and using smaller data sets. This e-book will help you get started.
Strategic Pricing Solutions – 2016
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8 Keys to Price Optimization