How to Track Competitor Pricing: A Comprehensive Guide for Businesses
It may be displayed in fine print or on a small piece of paper but the significance of price is a hundred times more than its diminutive size suggests.
Price can make or break a business. It can be the final push that gets your customer to check out their cart or alternately, to click exit and stay away from your store for the near future.
That’s why business owners should be careful when pricing their products.
It’s too easy to fall into the pitfall of being too greedy and driving customers away with premium prices or being too cheap, thinking the lower the price, the better, thereby repelling customers who think your pricing indicates an inferior product.
Price affects consumer behavior and brand perception. Lower prices appeal to customers who are pragmatic and looking for a deal.
Meanwhile, higher prices influence customers emotionally and create a feeling of exclusivity or luxury–things people are willing to shell out more money for.
In this article, we’ll talk about how to understand pricing and competitor price tracking.
You’ll find answers to questions like “Why do I need to track my competitor’s prices?” and “How can I effectively track my competitor’s prices?”
We’ll also talk about tools that will assist you with tracking pricing strategies and then what to do with the data you’ve gathered using those tools.
You’ll also know the mistakes to avoid when pricing your products and how to analyze competitor pricing data.
By the end of this article, you’ll know how to apply this information to your business and price your products just right so you strike a sweet spot between competitiveness and profitability.
Essentially, I’ll teach you how to make an offer your customers can’t refuse. Without further ado, let’s dive in.
Tools and Tips to Track Competitor Pricing Like a Pro
- Understanding the Need for Competitor Pricing Tracking
- What is price monitoring or price tracking?
- Why you should track your competitor’s pricing
- Methods to Track Competitor Pricing
- Manual
- Automated Software
- Top competitor price tracking tools
- Panoramata
- Price2Spy
- Prisync
- Omnia Retail
- Competera
- Responding to Competitor Pricing
- Common Mistakes to Avoid When Monitoring Your Competitors’ Pricing
- Over-reliance on Competitor Pricing Data
- Ignoring Other Factors like Quality and Brand Value
- Failing to Comply with Legal Standards
Understanding the Need for Competitor Pricing Tracking
What is price monitoring or price tracking?
Price monitoring is the process of continuously tracking and analyzing the prices of products or services offered by competitors.
This involves keeping a close eye on what competitors are charging for similar items, as well as noting any discounts, promotions, or pricing strategies they employ.
By doing so, businesses can gain valuable insights into market trends, identify pricing patterns, and make informed decisions about their own pricing strategies.
Why you should track your competitor’s pricing
1 - Understand your market better
Knowing your competitor’s pricing is helpful when considering how you can price your products more attractively.
For example, after examining your supply chain, you discover that you’re able to offer the same product at a lower price than your competitors. For customers, that price is undisputedly the better deal when they go comparison shopping.
However, you need to know your competitor’s pricing first to arrive at the right price. Your pricing strategy can be led by historical data instead of intuition when you monitor your competitors.
You can stay abreast of industry trends and patterns and offer lucrative discounts and dynamic pricing schemes.
2 - Stay competitive
Competitor price tracking ensures you stay competitive no matter what industry you’re in.
You can extract insights from your competitors’ strategy and benchmark your products’ prices against competing products and adjust your pricing based on the intelligence you’ve received.
Customers are hunting for great deals and will hop on different websites to find the best price. It’s a no-brainer to adapt your pricing based on your competitors’ prices while also considering market demand and the time of the year.
You can also strike when the iron is hot and grab customers from your competitors if their inventory is low, as an example.
3 - Increase profitability and market share
Margins can be thin so you need to take care to maximize profit when you can. This goes beyond production and extends to your pricing strategy.
When you monitor competitor prices, you can set competitive yet profitable prices and increase your margins. You can better understand your unique selling proposition and how your product is different.
Couple that with research on your market, and you’ll be able to understand your customer’s mindset and what they’re willing to pay for.
You can even undercut your competitors if your target market values affordability more than anything and if your products are very similar to your competitors.
Methods to Track Competitor Pricing
There are two methods to track your competition’s pricing strategy: manual and automated.
Manual
Manual competitor price monitor entails visiting your competitor’s websites regularly to check for price updates. You also need to note seasonal and other price changes during promotions and holidays.
Aside from websites, you need to take a look at your competitor’s newsletters regularly by signing up to their email list. This way, you can receive timely updates on their promotions and new products.
Other places to research pricing include reseller and partner sites, government sites, minutes of your competitor’s board meetings, review sites like G2 and Capterra, and internet forums like Quora.
Lastly, you can visit your competitor’s brick-and-mortar stores so you can see their pricing and promotional strategies.
The advantage of in-person monitoring is that you can talk to the store personnel to gather more information. The disadvantage is that it’s impractical to do this regularly and takes more time than just online price monitoring.
Automated Software
Using automated tools for tracking competitor pricing offers several advantages, but it's important to weigh these against potential drawbacks. Here are the key pros and cons to consider:
Pros
Efficiency
Automated tools streamline the process of tracking competitor prices by continuously collecting and updating data in real-time.
This saves significant time and effort compared to manual tracking, allowing businesses to focus on strategic decision-making.
Accuracy
These tools reduce human error, ensuring more precise and reliable data. With features like price alerts and detailed analytics, businesses can confidently make informed pricing decisions.
Scalability
Automated tools can handle large volumes of data across numerous competitors and products. This scalability is particularly beneficial for businesses with extensive product lines, enabling them to monitor prices comprehensively and efficiently.
Cons
Cost
Many automated tools come with subscription fees or usage costs, which can be a significant investment for small businesses.
While the benefits often justify the expense, it's crucial to assess whether the cost aligns with your budget and expected ROI.
Learning Curve
Implementing and utilizing automated tools can require time and training. Team members may need to learn how to effectively use the software and interpret the data it provides.
This initial learning phase can be a hurdle for businesses looking for immediate results.
Dependence on Technology
Relying heavily on automated tools means that any technical issues, such as software glitches or data inaccuracies, could disrupt your price monitoring efforts. Ensuring you have reliable support and contingency plans is essential.
Automated tools for tracking competitor pricing offer significant advantages in terms of efficiency, accuracy, and scalability.
However, businesses must consider the associated costs and the learning curve involved. By carefully evaluating these factors, you can decide whether automated tools are the right fit for your pricing strategy needs.
Top competitor price tracking tools
Now that you tackled the pros and cons of price tracking tools, here are the best ones to consider.
Price2Spy
Price2Spy is a price monitoring software worth considering because of its ability to generate custom reports out of the pricing data it gathers for you. They dub themselves the all-in-one solution for dynamic pricing, price monitoring, and price optimization.
Price2Spy’s features include price change alerts, analytics, a price matrix report that gives an overview of all available prices, and historical report that tracks each competitor’s price changes.
Prisync
The next price tracking tool on the list is Prisync, which tracks unlimited competitors and has price monitoring and dynamic pricing features. The platforms it monitors include Shopify and Google Shopping.
Prisync displays this information on one dashboard so you can see price changes at a glance. Users especially like its customer support, which they say is quick and attentive.
Panoramata
Panoramata is a competitor tracking and benchmarking platform that also has price monitoring features. It’s primarily geared towards ecommerce businesses who want to keep tabs on their competitors marketing strategies.
You can look up your competitor and access their brand page containing all their activity from ads to emails. This also includes their product catalog and its price change history since Panoramata started tracking it.
Omnia Retail
Another price monitoring tool to add to your list of tools to consider is Omnia Retail (also called Omnia Dynamic Pricing). With this automated software, you can implement pricing rules easily without web development or IT know-how.
Its capabilities include data collecting, pricing insights, and setting of custom repricing rules. This software is best for mid to large-sized companies because of its high price tag.
Competera
Lastly, we have Competera, an AI-based price tracking tool that has been trained on real purchases. It can be used in any industry and by multiple types of businesses, whether online, offline, omnichannel, or multi-brand retailers.
It excels in automating pricing decisions and collecting real-time market data. This is great for making strategic decisions based on real data.
Responding to Competitor Pricing
Adjusting prices based on competitor data can significantly enhance a business's market position.
One effective approach is dynamic pricing, where prices are adjusted in real-time based on competitor prices, demand, and other market factors.
This strategy ensures that your prices are always competitive, helping to attract price-sensitive customers and maximize sales during peak demand periods.
Another approach is penetration pricing, where businesses initially set lower prices to enter a competitive market and attract customers. This strategy can quickly build market share and brand recognition.
Once a loyal customer base is established, prices can be gradually increased.
Balancing competitiveness with profitability involves a strategic approach.
First, understand your cost structure to ensure that any price adjustments still cover costs and desired profit margins.
Use competitor data to identify the lowest price point at which you can remain profitable while being competitive.
Additionally, consider the value your product offers compared to competitors. If your product has unique features or higher quality, you can justify a higher price point.
Regularly review and adjust your pricing strategy to reflect changes in the market and competitor behavior.
By combining competitive pricing strategies with a focus on value and profitability, you can maintain a strong market position while ensuring sustainable business growth.
Common Mistakes to Avoid When Monitoring Your Competitors’ Pricing
When monitoring competitor prices, it's essential to avoid several common mistakes to ensure your strategy is effective and sustainable:
Over-reliance on Competitor Pricing Data
While competitor prices provide valuable insights, basing your entire pricing strategy on them can be risky.
Market conditions and business models vary, so it's crucial to also consider your cost structure, target market, and business goals.
Ignoring Other Factors like Quality and Brand Value
Price is just one aspect of a product's value proposition. High-quality products or those with strong brand recognition can command higher prices.
Focusing solely on matching competitor prices can undermine the perceived value of your offerings, leading to a potential loss in brand equity.
Failing to Comply with Legal Standards
Engaging in unethical pricing practices, such as price-fixing or collusion, can lead to legal consequences.
Ensure your pricing strategies comply with antitrust laws and other relevant regulations to avoid legal trouble and maintain fair market practices.
By balancing competitor pricing data with your unique value proposition and legal compliance, you can create a robust and effective pricing strategy that supports long-term business success.
Final Thoughts on Tracking Competitor Pricing
Tracking competitor pricing is crucial for maintaining a competitive edge in today's dynamic market. By understanding how competitors price their products, businesses can make informed decisions, optimize their pricing strategies, and attract more customers.
This practice not only helps in setting competitive yet profitable prices but also provides insights into market trends and consumer behavior.
I encourage you to start implementing these strategies to monitor your competitors' prices. Use a combination of manual methods, automated tools, and regular analysis to stay ahead of the competition.
This way, you can ensure your offerings remain attractive to your target audience while maintaining profitability.
Don’t forget that maintaining a competitive edge requires ongoing effort.
Regularly conducting competitive analysis, staying updated on market trends, and being responsive to changes in the competitive landscape are key to long-term success.
By integrating competitor pricing tracking into your business strategy, you'll be better equipped to navigate the challenges of the market and drive sustainable growth.
