Week #8 in Machine Learning

Pricing Optimization with ML

Pricing optimization is the process of pricing goods and services to meet the set objectives such as maximizing profits, getting new customers, clearing certain items, etc., by considering various pricing factors such as competitor pricing, customer demands, market conditions, and customer profiles.

Photo by Rajiv Perera on Unsplash

• Successful price optimization is about finding the sweet spot between valuable and lucrative.
• This balance can significantly impact your sales, customer satisfaction, revenue, and achievable growth objectives.
• To conduct price optimization, first understand the customers and the business.
• Understanding the pricing strategies and concepts is also essential for setting the best price for your products.

To optimize prices, you need the following information:

• Customer survey and behavior data
• Demographic and psychographic data
• Geographical market specifics
• Historical sales data
• Operating costs
• Inventories
• Demond fluctuations
• Competitive advantages and concerns
• Lifetime value and churn…