Leveraging Marketing Intelligence to Drive Pricing Analysis
Alcohol sales are one thing that have not been heavily impacted by the shaky economy, a fact reported by many (including CNN Money) since 2008. As one economist put it, “I wouldn’t call it recession-proof… But people will continue to drink, regardless.” So what might alcohol brands have to worry about since sales have remained healthy? One area of opportunity for improvement is strategic pricing. According to Forrester, “A challenging global economy has led consumers to value price ever more steadily, with 52% of American consumers agreeing that ‘price is more important than brand names’ in 2011, up from 41% in 2000 and 44% as recently as 2008.”
Forrester says that pricing models should be based on the 5 C’s, which are customers, competition, commercialization, costs, and communication. For the sake of brevity, however, I would like to focus on the importance of the first two C’s–customers and competition–and how these areas can be better leveraged with the help of marketing intelligence and business analytics.
You have undoubtedly heard about brands that have tried to increase their prices and been met with extreme backlash from their customers (think Netflix when they tried to charge double for separate services). What the customer thinks is important to the success of your business, especially in the age of social media when your brand’s message can be accepted, denied or acted against quite quickly. The power lies with the customer, so it is important that they are happiest.
So how might you assess what your customers want from your company? With the power of social research, it’s easy. You can find out what your customers are saying about the spirits industry, including your brand and your competitors’ brands. How do they assess the value of their alcohol? What outside forces impact their decision-making to buy your product or service? What variables can you control in order to help the customer convert? What assets or added value can you provide that will help you sell to your target audience? Finding out what is most important to them through social research can help provide you with actionable insights that you can use to positively impact your business.
Competitive research is the cornerstone of a great digital marketing strategy. It’s not about looking at their pricing models once. It’s about continuously monitoring your product value and pricing to be competitive in your industry. You now know, thanks to social intelligence, what your customers want. How can you use this information to upstage the competition? Perhaps you find out that most customers search for your products on search engines (which is true for most businesses).
When you do competitive research, you realize that your competitors are bidding on high-funnel keywords like “champagne.” You see an opportunity to marry mobile and search with a hyperlocal strategy to show people where to buy your champagne in their specific markets. Perhaps your customers want the option of being able to buy their spirits online. How can you enhance their user experience? Shipping discounts? 1-click purchasing? Specials, promotions, and limited edition bottles? All of these ideas can be generated from a little investigative research into the competition.
By marrying historical data and industry trend analysis, you can create a predictive model for the spirits industry. You can leverage this information to optimize your pricing on various spirits throughout the year. For example, everyone knows New Years is a huge time for champagne. But how can you capitalize on other times of the year when champagne might be popular, such as wedding season? Predictive analytics can show you where the opportunities for improvement lie and allow you to make pricing and inventory decisions based on data.
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