Pricing manually? It's a bold move
For fuel and convenience retailers, unexpected volume demand volatility caused by the ever-changing pandemic presents new threats to your market share, particularly for networks with complex trading nuances and considerations.
When costs or demand changes dramatically, manual pricing offers a quick fix to get prices out to market, protecting your brand when standard price generation settings aren’t applicable.
It may be timesaving, but pricing using manual tactics makes it difficult to know if decisions are the right ones – especially if your pricing strategy factors in competitor behavior. You may not be taking into account all of your typical objectives.
Effective pricing relies on a well-documented decision-making process. Why was that price change authorized? Can you justify a price that has fallen outside of the feasible or permissible range? How long can your performance tolerate pricing in this way?
One or two manual pricing decisions are exceptions, but sustaining a manual approach presents significant challenges to maintaining alignment with your overall pricing strategy.
Fortunately, there are actions you can take to ensure your pricing stays in line.
Encourage visibility across your teams
Establish a periodic local market review, not forgetting to partner with your operations team to get the most up-to-date information about the competitor landscape. Pricing data ages fast, so foster a culture of shared information between pricing managers and colleagues based at the fuel sites, to ensure that valuable information about your market isn’t siloed from those that need it.
Protect your brand
Revisit your local market delta settings for key competitors. If the competition is pricing out of the ordinary, tweaking your settings to reflect this will sustain your brand’s position within its competitive environment.
Ensure data is high quality
You should actively pursue data completeness and accuracy. That includes ensuring cost data behind margin calculations is up to date and performance targets reflect the new normal – you can’t accurately measure performance without the full picture.
Look back and assess
Commit time to analytics by balancing business as usual with learning retrospective insights on performance outliers. In today’s unpredictable times, it’s never been more important to learn lessons from all the insight available to your organization.
Change your settings, not your prices
Allow any anomalies to point you in the direction of manual strategy intervention, instead of manual price intervention.
Strategy parameter management ensures you have a routine in place to manage your pricing settings, and ensure alignment with your objectives. If anything changes, this approach means your response is to manipulate your settings, rather than your pricing, to represent the new needs of your business.
Avoid large overhauls in future by making small, informed adjustments as you work. After all, maintaining stability and predictability is the key to ensuring your brand remains consistent in the eyes of the consumer.
Kalibrate Pricing offers functionality to supplement and support a manual approach; whether it be general price changes (or network-level moves) using a range of controls, competitor differentials management, charts, and intel to expose competitor deltas or network segmentation and volume sensitivity. In addition, all types of prices are stored for auditing, providing total decision transparency to aid strategy parameter management.
Why not speak to a Kalibrate Pricing expert? We’d be delighted to demonstrate how the platform can combine manual pricing by exception, while automating price generation using tolerances with brand preservation in mind.
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