At a time when quality and sustainability have taken the lead among buyers, pricing still remains a significant factor in purchasing decisions. Most consumers seek the lowest pricing options wherever possible, and the internet has made it increasingly easy to find the lowest prices.
In such a cut-throat market, several pricing models are not relevant. This explains why price intelligence is essential for businesses to profit while staying ahead of their competitors. It is an indispensable tool for making data-informed decisions about your product/service pricing.
This is particularly true for car rentals that need intelligent solutions to go beyond the norms of a flat fee or rule-based pricing. With a surge in events globally—be it conferences, musical events, festivals, and more, the need for car rentals is mostly on the high.
To become the go-to option for consumers, pricing plays an important part. One has to price the fleet according to actual demand, the market and the company positioning, while ensuring margins are not eroding – which is a big feat to achieve. In most cases, to become the go-to option for consumers, one has to either be among the more affordable options or have an exclusivity in your fleet or services.
With this blog, you can dive deeper into the concept of price intelligence and understand its significance for your profit margins. We’ll also talk about the best ways to leverage pricing intelligence for your car rental business. Let’s get started!
Price intelligence refers to pricing decisions based on data gathered by monitoring competitor information, market pricing data, and many such demand indicators to make informed revisions and updates to existing price values.
This is often done using pre-defined rule based tools or via data mining techniques and AI-based recommendation engines. The pricing options are forecasted to assist businesses prepare for repricing.
A 20% discount on your end and a last-minute 40% discount from your competitor on an identical product can damage your business. Or maybe your competitors have an advertisement campaign promising about free home delivery of the cars on their website. More potential customers will be flocking to their websites while you wonder why your prices aren’t attractive today.
But imagine, what if you had all this information reported to you in real-time? That would be a game-changer. Here are all the reasons why price intelligence is crucial:
1. Stay ahead of your competitors
If you can predict the market demand and monitor competitor data, you will be in a position to plan your pricing well. Early monitor can help a company change their pricing well in advance and create avenues to develop even better strategies.
2. Predict situations and plan accordingly
When you can predict pricing strategies and demand, you will save yourself from situations where you might end up pricing your fleet too low. This can give you significant business, but you can still end up experiencing losses.
At the same time, if you have visibility into several demand indicators and understand competitor behavior well, you can modify your prices accordingly to make more margins. Suppose they face a negative public backlash with several customers backing out of being loyal customers. In that case, you could leverage such situations without decreasing your pricing too much and driving traffic to your site and even invest in marketing campaigns, at the right places.
3. Manage inventory
If you predict real-time situations and track demand, you will be in a position to manage inventory well. You do not want customers arriving at your site because of an ad that claimed a low price, whereas the product is out of stock. Managing this side of sales is also vital for customer experience.
4. Create better advertisement campaigns
You can create nuanced advertisement campaigns when you understand the market and your competitors. If your competitor has a free car delivery offer, you could leverage it and create campaigns that offer unlimited mileage on select car models. Strategies like these are bound to attract users and help your business thrive.
5. Recommend products well to customers
You can better understand your clients by using AI-based price intelligence tools. This means that you can suggest the same car to them the next time they visit your website if they repeatedly browse a product but depart without buying it. You might even suggest comparable goods that are less expensive to pique their curiosity.
Now that we have established why pricing is necessary, it is time to evaluate how a business can gather the information to help its pricing efforts. These are varied but often depend on only a few factors.
1. Identify competitors
While the competition for any business is a large landscape, some primary competitors pose more of a threat than others. Understanding who they are and what level of threat they can pose are essential in identifying your main competitors. The amount of reach they currently have in the market share and their abilities to influence prices are all factors in realizing their threat to your business.
2. Track, monitor, and analyze data
Once you’ve recognized the right competitors, software capable of providing streamlined competitor data will provide real-time price information. You can understand how and when they are increasing or decreasing the prices and how often they change these prices.
Furthermore, whenever there is a significant price decrease, you can infer that a special sale or event is coming up that can drive these sales. You can strategically use this data to align your price points to be better than your competitors.
3. Report and evaluate
Price intelligence tools provide a dashboard to understand data quickly and make informed decisions, with confidence. This makes price intelligence a combined effort between an intelligent tool and a skilled employee to make data-based decisions as opposed to making it a guessing game.
In fleet management, especially where there are several vehicles to manage and utilize. They can plan the inventory of the vehicles based on demand and price according to the latest changes in events, weather, location and competitor pricing data.
Finding a suitable application for anything is often a challenge today. However, this need not be the case for your pricing needs. With a platform like Rev-AI, pricing is a piece of cake. It provides data and ensures actionability. Rev-AI provides pointers, including:
Moreover, the platform uses AI to quickly recommend pricing that is extremely precise. Furthermore, it also enables the distribution of these prices, across all your channels, at the push of a single button, making it highly convenient.
As you read so far, price intelligence is crucial in ensuring you are always one step ahead of your competitors. It also assists you in understanding the market demands better to acquire a more significant market share.
Furthermore, an upfront investment into software that can help you in this process can significantly improve and protect your profit margins and give you a high ROI.
So go ahead and leverage all the information at your disposal to be a pricing wizard that wins your business and grows your profits!