The price that will make you win

What is a Price to win strategy?

A Price to Win strategy aims to determine the lowest possible price to win the contract while ensuring a reasonable profit margin for the company.

The process involves analyzing the situation, adjusting the price, and analyzing it again until the business finds the best price to bid. When deciding, they consider the customer's budget, competitors' charges, and costs. By doing all this, they can increase their chances of winning the contract and making a profit.

How is this relevant to my business?

This strategy can be applied in various business scenarios. For instance, companies in the commercial sector often use Price to Win strategies to price their products or services while ensuring profitability competitively.

You can use Price to Win strategies to optimize pricing in a competitive bid or tender process. This involves understanding your competitors' pricing, evaluating cost structures, and determining the most effective pricing strategy to secure a contract or sale.

Moreover, Price to Win can also be employed in product development to establish the ideal pricing for a new product. Companies can select the optimal price point that maximizes sales and profitability by analyzing customer needs, market demand, and competitive pricing.

When is a Price to Win strategy good to use?

Price to Win combines competitiveness and profitability. However, is the strategy best for you to use in the following three scenarios:

1. When entering a bidding Process: In situations where pricing plays a critical role, this strategy aids in developing a competitive pricing approach that enhances your chances of success.
   
   
2. When launching a new product: The strategy allows you to determine the optimal price by analyzing customer needs, market demand, and competitive pricing. This ensures you maximize sales and profitability.
   
   
3. When having competitor pressure and Market Changes: If your business faces pricing pressures from competitors or experiences shifts in market conditions, the Price to Win strategy assists in reviewing and adjusting your pricing strategy. This enables you to remain competitive while still being profitable.
   
   
4.  When the ideal price needs to be determined for acquiring a target company. Analyzing the target company's financials, competitive landscape, and market conditions, this analysis supports acquirers in determining a fair price.

What is essential to be aware of when using Price to win strategy? 

Considering the long-term implications of a Price to Win strategy is essential, as it may lead to a race to the bottom and ultimately hurt your profitability. It is crucial to consider your overall value proposition and brand image and not solely rely on your price as the key differentiator. The important factors to be aware of besides price is: 

1. The strategy is only as good as the data that goes into it. It is important to have accurate and up-to-date information on customer requirements, competition, and costs.
   
   
2. The strategy should be based on thoroughly understanding the customer's needs and priorities. This includes price and technical capabilities, past performance, and quality.
   
   
3. The strategy should be realistic and sustainable. Winning a contract or sale at an unsustainably low price can damage your reputation and profitability in the long run
   
   
4.  The strategy should be flexible and adaptable. Circumstances can change during the bidding process, and it is important to be able to adjust your pricing strategy accordingly.
   
   
5. The strategy should comply with relevant laws and regulations, including pricing, ethics, and contracting.
   
   

How can PriceShape help with a Price to Win strategy? 

PriceShape can help you develop a data-driven Price to Win strategy informed by market conditions, competitive pressures, and customer behavior. We can help your business with the following when doing a Price to Win strategy:

1.  We can provide detailed market analysis, including information on competitors' pricing, market trends, and customer behavior. This information can you use to develop a Price to Win strategy that is competitive and tailored to your needs
   
   
2. We can run a scenario analysis to help you evaluate pricing strategies and their potential impact on sales volume, revenue, and profitability. This can help you to develop a Price to Win strategy that balances competitiveness and profitability
   
   
3. We provide real-time pricing information, allowing you to adjust pricing strategies in response to market conditions, competitive pressures, and customer feedback. This flexibility is critical for developing a successful Price to Win strategy
   
   
4. We can analyze historical data to identify pricing patterns and trends, allowing you to develop pricing strategies informed by past performance

How to optimize your price position on Google Shopping

Competitive pricing on Google Shopping refers to pricing your products to make them more appealing to potential customers than similar products your competitors offer.

To achieve competitive pricing on Google Shopping, you should research and compare prices of similar products your competitors offer. This can be done by analyzing data from the Google Shopping platform or, more efficiently, from our PriceShape platform. It is also possible to take immediate action on the data - changing prices and allocating marketing spend on the correct products from PriceShape.

Based on this research, you can then adjust your prices to be more competitive while still maintaining a profit margin. Consider offering discounts, promotions, or bundle deals to make your products more attractive to potential customers. Another strategy for competitive pricing on Google Shopping is to focus on offering products with unique features or benefits that set them and your webshop apart from your competitors. This can justify a slightly higher price point and attract customers who are looking for something specific.

Ultimately, competitive pricing on Google Shopping aims to attract more customers and increase sales while maintaining profitability.

Traffic before conversions

If you have positioned yourself too far from your competitors’ price points, you will experience a fall in the number of exposures, as the article in this blog shows you. Products placed under the average market price perform significantly better than those above the average market price. You don’t have to sell all your products at a low price, but you need to figure out to be competitive at the right time, generate traffic and sell products with the right profit. It can be difficult, but it doesn’t have to be it. 

Get to know your price position and optimize your marketing spend

If you want to optimize your price position and spend on Google Shopping, the only thing you have to do is send your Shopping feed in our direction. Then we will take care of the rest and identify and show you where in the market you are competitive to let you spend your budget on the right products at the right time.