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Steps to Optimizing Price with Pricing Software

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 1. Define Your Scope

First you need to work out whether you are going to optimize prices for your entire portfolio or just a subset. For all customers or just some customer segments. For all markets or a selected few.  

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It’s important to think about this step with care, again, the purpose is not just to find the price that will drive the most volume out the door, we need to have a strategy alongside a pricing optimization initiative. 

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Even though we talk about “price optimization” the reality is that price is a lever we will be using to achieve the goal of optimizing the real objective, and as mentioned previously, said objective can take many forms, and quite often it can take multiple forms at once.

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Is It Possible to Optimize Prices Without Software?

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Yes… and no. 

There are many companies doing their pricing in Excel where they’re able to build very simple optimization or linear programming models that allow them to find a solution to a particular problem. While Excel presents some constraints, it’s not rocket science. So yes, technically you can. But… 

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Who Should Be Implementing Price Optimization Software? 

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Organizations mostly likely to succeed with pricing software will have a genuine interest within leadership on understanding where the potential of price optimization is who then champions the transformation from the top. 

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