Every product and service that enters the market has its perfect price – the price that precisely balances perceived value and customer price sensitivity in a way that maximizes sales, enhances demand, and ensures success against competitors.
Finding this price is a critical step in any go-to-market strategy, but the process can be challenging without the right strategic approach.
In this article, we’ll take a closer look at the most effective price optimization strategies, why they’re important, and how to incorporate them into your go-to-market strategy.
Price optimization is a predictive market research approach that aims to determine the ideal price point for a product or service. Using a variety of methodologies and data-driven insights, market researchers calculate the price point that will maximize sales by perfectly balancing consumer price sensitivity and perceived value, while optimizing profitability.
The price optimization process tests various price point and product or service feature combinations among target consumers and key market segments to determine the price that is most likely to drive purchase. This ideal price should factor in product or service costs, competitor pricing, market demand, and broader economic considerations to predict which price point will capture the most value.