From Data to Profit: How to Use Insights For a Better Pricing Strategy
They say data is the new oil and the gold rush of the 21st century. And they’re not entirely wrong.
Data cuts through the noise and provides valuable insights into customer behavior, market trends, and operational efficiencies, leading to better systems and less waste. It also helps you discover what’s working and what might need to be restructured (Hint: pricing).
A study by McKinsey & Company found that businesses using data insights effectively can increase their operating margin by 60%. Provided there is no loss of sales volume, a 1% price increase in prices typically translates into an 8.7% increase in operating profits.
The right data (like shipping costs, delivery times, and customer preferences) can tell you more about your business than any case study. Without uncovering these insights, you may leave millions of dollars of profit on the table.
But where do you start?
This blog will discuss how you can use these insights to restructure your pricing and drive your business to success. Let’s dive in.
Insight #1: Shipping Costs
By analyzing your shipping data, you can better understand what it costs to deliver your products and determine what margin you'd like reflected in your prices. Finding the optimal price point for your products and services based on cost, demand, and competition is much easier with Ziing.
Insight #2: Delivery Times
Delivery times are an essential insight to consider for your pricing strategy. If you offer fast delivery times, you may be able to charge a premium for your products. Conversely, if you provide slower delivery times or consolidated deliveries, you may need to lower your prices to remain competitive.
Insight #3: Customer Preferences
In most businesses, customers rule the decision-making. By analyzing their preferences, you can ensure you offer what they want. For example, you may find that your customers are willing to pay more for expedited or eco-friendly shipping options.
You can also run a free shipping campaign to determine whether customers are willing to spend more if given the choice of free shipping. Using this information, you can tailor your pricing strategy to meet the needs and preferences of your customers.
Insight #4: Profit Margins
Some data points may surprise you, and you may need to restructure your pricing strategy to increase your profit margins. By analyzing the overall costs of goods sold and your profit margins, you can identify areas for cost savings, such as optimizing shipping routes, reducing packaging materials, or using alternative shipping options. These changes can lead to lower shipping costs and improved profit margins.
Insight #5: Campaigns and Sales Trends
By analyzing the results of past marketing campaigns, seasonal sales, and discounts, you can better understand the impact of promotions and discounts on sales volume. This information can inform your pricing strategy and help you determine the optimal mix of promotions and discounts to offer in the future.
Ready to Turn Your Data Into Profit?
Data-driven decision-making is the key to success in today’s competitive market. You can start turning numbers into dollars and maximize your profits by leveraging insights from these data points.
At Ziing, we deliver shipments across Canada daily, generating thousands of data points. We can help you get on the path to making informed, data-driven decisions. Other than your shipping costs, we also monitor the following data points:
- Temperature and ambient monitoring data through IOT sensors
- Asset tracking, location, and vehicle data
- Quality control, KPI reporting, and proof of delivery
- Reroute scenarios for diagnostic/prescriptive analytics
These data points are then analyzed to drive continuous improvements to delivery efficiency, security, and quality.
Ready to partner with a data-driven logistics partner that can keep up with the ever-evolving industry and your customers' needs? Reach out to us here.