Price Optimization & Sensitivity Analysis

Price optimization is the use of statistical analysis and modeling to determine how customers will respond to different prices for its products and services through different channels. It is also used to determine the prices that the company determines will best meet its objectives such as maximizing operating profit. Can Market Research help me with pricing decisions? Absolutely! And, in a major way.

Techniques now exist to create models to simulate the purchase decisions of customers faced with a choice of features and price points for your product based on a branch of statistics known as Discrete Choice Modeling & Conjoint Analysis. 

Silicon Valley Research Group has been on my forefront of applying these techniques to solving complex pricing problems for technology products and solutions including Hardware, Software licensing and SaaS based consumer & business "freemium" models.

One of the most powerful outputs of our work in this area is the development of a powerful market simulator for our clients. This tool lives on longest after our initial pricing research project is completed and we have answered our clients' pricing questions. Our clients use the simulator to ask "what if" questions, predict market response to competitors pricing moves and equip their sales force to respond in real time with appropriate strategies & tactics.