Why Is It Important To Start Doing Some Competitor Price Monitoring?
Competitor price monitoring is the only way you can be sure your business is not failing to keep its finger on the pulse of your market
. When trends arrive or when seasonal goods fall in and out of favour price trends follow suit. By analysing and monitoring the market as a whole and the prices that go with it, you can build a picture of how and when to raise and lower your prices.Lets use the holiday market as an example. Accommodation in a British seaside town has a range of pricing structures, which come into effect at different times of year.
Why?
Because competitor price monitoring shows that everyone else drops and raises their prices according to season. So if you dont, no one will come and stay with you except in the height of summer.
And increasingly, in the holiday industry, its an ability to pick up all the traffic that comes in when it isnt summer which really raises your overall profitability. So you keep an eye on the wider business environment in which you trade and you drop your prices in accord with everyone else. If youre clever, you drop them slightly more than everyone else or you introduce offer also based on competitor price monitoring which allow you to get the edge.
For instance you can waive any car parking fees in low season. Monitoring your competition you can see who drops his or her price to the lowest levels then match it but throw in a waived car park charge to get the interest of the consumer.
In this industry, as in any other the old adage applies you can think your pricing is right as rain but if you have an empty campsite youre doing something wrong. Competitor price monitoring is intended to ensure that you dont fall into the trap of complacency of assuming that this years prices will hold next year. Next year might be a harder year, weather wise. Or the economy may have dwindled, meaning people feel less happy about spending and when they do spend they count every single penny.
You can spot trends like this in advance, by listening to the news and keeping your eye on all the external factors that impact on your business and your service provision. But to keep your prices agile within your market, you must then align what you have seen in your wider research with a competitor price monitoring program. If you fail to do this, you can have all the knowledge you need except the key piece how has the competition reacted to the environment you have identified?
The longer you analyse for, the better your pricing system will become. Because year on year analysis of the factors affecting your business (and that includes the prices the competition is setting) helps you to get a clear picture of overarching trends and long term fashions.
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