It’s funny. We always try to stay ahead of the game, or at least, keep pace with technology. Every once in a while though, we realize that technology has left us behind. Sometimes it’s quaint; maybe we write a letter with pencil and paper, lick the envelope, and stick it in the mailbox. Other times, though, staying back can have a detrimental effect on our business.
Pricing is one of those tasks that frequently gets left behind. Pricing managers or small business owners have been doing it their way for so long that they can’t imagine working any other way. I remember working in a specialty neighborhood grocery back in the mid 90s. The owner would print up his order sheets that listed the wholesale price of each item. He’d calculate and handwrite the price of each item on the list and have me and the other employees price the merchandise on the shelves.
Pricing, like everything else, has changed over the years. We’ve developed better techniques based on sales performance, consumer behavior, and competitors in the market. I have no idea if that grocery store owner is still calculating his prices by hand, but I have seen numerous other business owners calculating their prices the same way.
Here are the top 10 signs that it’s time for you to upgrade your pricing methodology:
#10: Manual Pricing
If you’re calculating prices by hand, and manually entering them into your system it’s really time for an upgrade. While your system may have worked for the last 100 years, you’re spending too much time calculating prices when you could be working on other ways to develop your business.
#9: Complex Excel Workarounds
Excel systems were highly effective tools whose time has passed. Every strategic change requires complicated formula changes, and it’s not easy to create pricing strategies across multiple lines of business
#8: Pricing Managers Can’t Keep up
In the race to keep up with online competitors and Amazon sellers demands that businesses change prices multiple times a day. If your pricing managers can’t keep up with all the changes, it’s time you found a new pricing methodology.
#7: Can’t Handle Multiple Currencies
If you’re looking to grow beyond borders, reach new customers and engage with new markets you need a pricing platform that can handle multiple currencies. Otherwise, you risk alienating customers and pushing them to look elsewhere for their purchases.
#6: No Time to Focus on Strategy
If you’re spending all your time making price changes but don’t have a minute to think about fine tuning your pricing strategy, it’s probably a good time to look into alternative pricing systems. Effective pricing tools will handle the time-consuming busy work so you can focus on getting the strategy right
#5: System Limits Strategy Implementation
Some pricing systems were designed for smaller businesses with fewer products, and prevents you from implementing a complex, multi-pronged strategy. If you’re limited by your pricing methodology, you owe it to your products to find a tool that can grow with you.
#4: Pricing System Can’t Speak to ERP
Perhaps your systems never were capable of fully integrating, or perhaps you’ve recently upgraded your ERP system and left your pricing tools in the dust. Either way, it’s vital that these two back end components can tightly, seamlessly and fully integrate with one another.
#3: Loyalty Pricing Issues
Loyalty pricing is a critical component in driving brand loyalty, but some pricing tools lack the functionality to recognize a loyal customer and provision the special prices they need.
#2: Reporting Issues
Price reports demonstrate the effectiveness of your pricing strategy. If your system is unable to generate the reports you need to help guide your pricing strategy, it’s time to move on and find one that can support the needs of your business.
#1: Real-Time
Today’s market demands real-time reactions to prices published by competitors, changes in the market, and shortages or surpluses in your inventory level. Introducing real-time capabilities into your pricing strategy can elevate sales and increase profits
What’s Next
If your pricing methodology is on this list, now is a good time to look into a dynamic pricing model, like that developed by Quicklizard. These models track the market, recommend prices, and ensure that you aren’t spending all day dealing with price changes.
