Have you seen the television game show, “The Price is Right?” Here’s a clip of a Double Showcase winner!
From the Wikipedia: “The Price Is Right” is an American game show centered on the pricing of merchandise to win cash and prizes. The current version of the show premiered on September 4, 1972 on CBS and was hosted by Bob Barker until his retirement on June 15, 2007. Drew Carey succeeded Barker at the beginning of Season 36 on October 15, 2007. TV Guide named “The Price Is Right” the “greatest game show of all time”. The show is well-known for its signature line of “Come on down!” when the announcer directs newly selected contestants to Contestants’ Row.
The original version of “The Price Is Right” aired from 1956–1965 and was hosted by Bill Cullen. While retaining some elements of the earlier generation show, the 1972 revival added many new distinctive gameplay elements, and now has the distinction of being the longest continuously running game show in United States television history, with more than 7,000 episodes aired.
I had a call today with a great group of sales executives discussing pricing. Pricing is a very interesting and important aspect of business, because it can literally make or break a business. There’s a big price for not getting the right price for goods and services that you buy and sell.
How do businesses fare in getting the right price for their products, as they play “The Price is Right” in the real world? It depends; some are good at it, some need coaching. Businesses can call a consultant, like phoning a friend on “Who Wants to be a Millionaire,” or they can rely on wisdom, knowledge, experience, and some analysis, like contestants on “Jeopardy.” They can also ask a computer, like the crew members on “Star Trek” do when they need information and analysis.
I broke my string of game shows with “Star Trek,” but isn’t the “Star Trek” crew’s method of getting an answer from comprehensive, granular, and rapid computer analysis combined with human thinking better than relying on a combination of guesswork, experience, some analysis, and intuition? I think so, and many businesses are in agreement as they begin to play hard ball with getting the price right using price optimization software. Space is the final frontier on “Star Trek,” and price optimization is one of the final frontiers of business intelligence.
Price optimization software helps you segment customers and use historical customer pricing data to predict future outcomes and set a price that covers your costs, serves your customers, and keeps you in the game. It has the ability to analyze complex data sets from multiple systems and provide guidance in getting the price right.
According to this excellent post by Knowledge@Wharton, “The Price Is Right, but Maybe It’s Not, and How Do You Know?” businesses can increase margins by two to eight percent by using price optimization software. Also cited in the post is a 27 percent revenue gain on baby products at Duane Reade, a drugstore chain in New York City. Duane Reade altered the pricing on its baby products for parents of newborns and for parents of toddlers as a result of using price optimization software. “The data showed that parents of newborns are not as price-sensitive as parents of toddlers. In response, the company cut prices on toddler diapers to remain competitive with other stores and raised prices on diapers for infants.”
Price optimization is a hot area of business intelligence, which is high on the list of CIOs and analysts today. Cloud-based price optimization software from companies such as Mimiran make it easy to get up and running, because there’s no software to install and no servers to maintain. Just create an account online and you’re on your way to higher profit margins, which keeps your ship running like the Starship Enterprise and rings like a winning bell on “The Price is Right” in any business climate.
How much can you charge for your goods and services this year, and how much is that answer worth to you?