Maximize profits with Smart pricing and Discount Optimization
Leverage Supervised Machine Learning to Enhance Margins and Maintain
Sales Volumes
This use case illustrates how businesses can leverage pricing and discount optimization strategies to maximize profitability and customer satisfaction. By analyzing market dynamics, customer behaviour, and competitor pricing, companies can develop data-driven pricing strategies. This approach helps in determining optimal price points and discount levels that balance profitability with customer demand.
Key Benefits
For an online health retailer, we built a churn model which allowed for highly targeted win-back campaigns resulting in churn reduction by 8% from an average of 27% to 19%, increasing sales by $675K annually.
Business Challenge
An online health retailer faced customer churn issues, particularly with subscribers not renewing their subscriptions.
To retain these customers, the retailer had to resort to sending offers, impacting profitability negatively.
The CRM team lacked insights into effective customer retention strategies.
Our Approach
Analyzed their data to assess the extent of the churn issue, revealing an average churn rate of 27%.
Identified that the cost of retention offers decreased profitability from £250 to £150 per customer.
Explored available data to pinpoint indicators of subscription non-renewal and strategized with the CRM team on effective retention tactics.
The Solution
Developed a churn model integrating data from website and app usage, postage costs, delivery times, transaction history, account activity, and customer feedback.
Achieved 61.3% accuracy in predicting churn across the entire customer base and over 90% accuracy in the top three deciles.
Identified customers likely to churn after their first month of subscription, enabling targeted retention efforts.
Business Outcomes
Enabled the CRM team to selectively send retention offers only to high-risk churn customers, resulting in a 30% reduction in churn rate from 27% to 19%.
Increased annual sales by over $675K by retaining customers who would have otherwise churned.
Significantly reduced costs associated with acquiring new customers to replace churned ones, further enhancing overall profitability.
Features and Capabilities
Supervised Machine Learning Algorithms
Precision in Pricing Decisions Infohensive’s Pricing and Discount Optimization solution harnesses the power of supervised machine learning algorithms to analyze historical sales data, customer behaviour patterns, market trends, and competitor pricing. This approach allows us to predict customer responses to various pricing strategies accurately. By continuously learning and adapting, our algorithms help you set optimal prices and discounts that maximize profitability while maintaining sales volumes.
Dynamic Pricing Strategies
Adapt to Market Dynamics Our solution enables the development of dynamic pricing strategies that respond in real time to changes in market conditions, demand fluctuations, and competitive landscapes. Whether adjusting prices based on inventory levels, seasonal trends, or customer segments, Infohensive empowers you to stay agile and competitive in the market. Dynamic pricing ensures that your offerings remain attractive and aligned with customer expectations, driving sales and profitability.
Margin Improvement
Increase Profitability Infohensive’s Pricing and Discount Optimization solution is designed to enhance profit margins by identifying opportunities to optimize pricing across your product or service portfolio. By pinpointing the most effective pricing points and discount levels, our solution helps you maximize revenue per transaction and overall profitability. This strategic approach ensures that every pricing decision contributes positively to your bottom line.
Profitability Enhancement
Achieve Sustainable Growth , With Infohensive achieve sustainable growth through strategic pricing and discount management. Our solution not only focuses on short-term profitability gains but also lays the foundation for long-term success by fostering customer loyalty and market competitiveness. By aligning pricing strategies with business objectives and customer expectations, we help you achieve consistent profitability and drive business growth over time.
Scalability and Security
Grow Securely Infohensive’s solution is built to scale with your business as it grows. Whether you operate in a small market or on a global scale, our platform adapts to handle increased data volumes and transaction complexities without compromising performance. Security is paramount; our solution includes robust data encryption, access controls, and regular security audits to safeguard your sensitive pricing and customer data. Trust Infohensive to protect your business interests while providing the flexibility to expand and innovate.
Reasons to Choose Our:Pricing and Discount Optimisation (Supervised Machine Learning)
Potential clients choose our Pricing and Discount Optimization solution to improve their business performance because it:
- Maximizes Profitability: By analyzing market dynamics and customer behaviour, businesses can set optimal pricing and discount levels to enhance profitability.
- Enhances Customer Satisfaction: Tailors pricing strategies to meet customer expectations, boosting satisfaction and loyalty.
- Optimizes Resource Allocation: Uses advanced analytics to forecast customer response to pricing changes, optimizing resource allocation and marketing spend.
- Improves Competitive Positioning: Enables businesses to stay competitive by offering compelling pricing and discount strategies that attract and retain customers.
