In business we’re wired to keep the things that give us a competitive advantage very quiet–especially from competitors. If they find out about it and do it too, the competitive advantage is no longer an advantage, right?
Well…that’s not always the case.
Here at PricingBrew, we’ve been researching various pricing technologies. And one technology in particular seems to have a mystery that surrounds it–in no small part because quite a few of the companies that use it don’t talk about it. Why? They seem to keep quiet because they’re fearful of losing the competitive edge that the technology can provide.
All this silence seems to have worked. So much so that it’s helped to create an air of mystery and misconception about price optimization technologies. That’s why we’ve worked to expose the truth behind some of the biggest misconceptions in Six Price Optimization Misconceptions Exposed.
But we also found that keeping quiet about using price optimization might not be as beneficial as these companies think.
You see, price optimization technologies strive to find the optimal market-aligned price for each quote. That helps the companies that are using these technologies grow sales and increase margin dollars. Often these increases can be quite significant–margin lifts of 6% to 10% are not uncommon.
When you find a technology that can provide an advantage like this, the natural reaction is to keep very quiet about it. But our research has shown that the smartest companies using price optimization don’t keep it a secret at all.
These companies seem to recognize that when a competitor is out there quoting prices that aren’t based on market reality, every company in the industry can find itself racing to the bottom in a price war. Yet when each company is intelligently quoting prices that are aligned to each selling circumstance and the reality of the market, the market is more fair for everyone—customers and competitors alike.
Keeping your use of price optimization well hidden from your competitors certainly won’t put you at a disadvantage. But it’s one instance where a competitive advantage can be even more advantageous when your competitors adopt it as well.