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Taking a Test Drive: How to Set Up Pilot Programs for Pricing Intelligence and Dynamic Pricing

Mihir Kittur, Co-founder and Chief Innovation Officer, Ugam,


Price Intelligence, pricing intelligence, Dynamic pricing, price intelligence pilot As with any technology platform, when evaluating a pricing intelligence vendor, it’s important to set up a trial period to test which vendor will best respond to your needs and determine whether they are the best long-term partner for meeting your business goals.

Here are some helpful steps for setting up a Dynamic Pricing pilot program:

STEP 1: Meet With Your Vendor to Define Your Goals
  • Outline problems, current practices and pain points around pricing.
  • Determine budget and goals.
  • Evaluate capabilities of the current system.
  • Determine scale needed for the program (e.g., how many competitors, how many SKUs).
  • Select which Key Value Items (KVIs) or which products would be best for evaluating vendors’ effectiveness at collecting pricing data.
  • Determine which products might bring you more traffic.
  • Determine the ideal crawling frequency (i.e., checking KVIs daily or even multiple times a day during holiday season).
STEP 2: Examine Diagnostic Results (about 4-6 weeks later)
  • Crawl your competitors’ pricing and stock data and your own data for analysis and to generate pricing recommendations.
  • Consider crawling social likes, product reviews, ratings and page ranks to measure the market demand.
  • Share and review potential pricing opportunities and possible impact.
  • Define Dynamic Pricing goals and measures of success.
  • Develop pricing recommendations based on competitor price, stock status, and internal data such as Weeks of Supply (WOS), closeout dates, sell-through percentage and conversion rates.
STEP 3: Implement Dynamic Pricing Pilot (about 8-12 weeks)
  • Launch pilot program and review performance.
  • Modify approach as applicable.
  • Test the vendor’s recommendations by:
    • Pricing more aggressively if more than four competitors are in stock.
    • Adjusting prices when competitors’ prices are lower but the product is out of stock.
  • Price higher or increase margins if less than four competitors are in stock or if Amazon.com is not carrying a particular product.
  • Once recommendation rules are created, generate them multiple times a day.
  • Periodically assess the effectiveness of the program.
STEP 4: Evaluate Success or Failure and Determine Future Path
  • Measure the impact of pricing recommendations based on change in sales and social signals over at least a few months.
  • Determine whether to proceed, end the program or expand the scope of your tests.
  • If moving forward, define the scope of a full Dynamic Pricing program.
  • Define the terms and finalize your contract.
To learn more tips for how to get started with a pricing intelligence technology solution, download a complimentary copy of our new eBook, “Pricing Intelligence 2.0: The Essential Guide to Price Intelligence and Dynamic Pricing,” for retailers and brands.

Download your copy today!



The Author:
Mihir Kittur is a Co-founder and Chief Innovation Officer at Ugam. He oversees sales, marketing and innovation and works with leading retailers and brands with insights and analytics solutions around their category decisions to improve business performance.



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