”Autodynamic pricing should be on the agenda of every CEO”, said the CEO of one large company, when I met him a few weeks ago. He mentioned the fact that he continuously came across stories about how dynamic pricing was utilized in different companies. His, and most other company leader’s biggest challenges include figuring out how autodynamic pricing could be utilized in their particular business, and how to get started.
If your company is considering shifting to autodynamic pricing, the study by Bain & Co, suggests that you take at least the following issues into account:
- Data – How is pricing data currently utilized?
- Tools – In addition to Excel, what other tools are in use?
- Current IT-systems – are those suitable for dynamic pricing?
- Processes – are pricing processes designed to make it possible to update prices without manual work?
- Competences of the personnel – How competent are the people in charge of pricing in applying dynamic pricing?
The most sensible way to start bringing autodynamic pricing into use is to model current pricing processes and to test historical pricing data by feeding it into an algorithm. You should also consider tools and interfaces and encourage the revenue managers to run experiments. It is not necessary to include all your products or services to be dynamically priced at once. Autodynamic pricing can be applied gradually.
If you would like to hear more, please contact us!
Tiina Laisi-Puheloinen, CEO, Priceff