Automation in pricing gets rid of the slow, rigid rule-based models and replaces them with real-time exploration and exploitation: built-in reinforcement learning that looks at how price changes influence customer demand, and optimizes how and when to act on that information.
Dynamic pricing means brands can deliver the right price at the right time to the right customer. It’s a completely new, disruptive pricing method, proven to boost revenue and profitability.
Thoughtworks has been at the forefront of dynamic pricing technologies for years. We’ve built some of the world’s first reinforcement learning -based dynamic pricing solutions in industries as varied as aviation, mobile communications, and hospitality. Our projects have created clearly demonstrable value, showing revenue increase between 4 to 13%, depending on whether pricing was previously made manually or by the best off-the-shelf pricing product. For our clients, we deliver revenue, profit, customer insight, and speed.
What we deliver
Dynamic pricing taps into the price elasticity of demand – the price sensitivity of consumers – and maximizes revenue by either lowering or raising the price. The model is built to drive volume at all times, and does it as efficiently as possible.
The dynamic pricing system optimizes prices according to all available data, optimizing for everything from current demand and supply to competitors’ prices and significant future events. That pushes up profit.
If wanted, the dynamic pricing model can attempt to find the optimal price point for each consumer. In the process, it uncovers considerable customer insight – rare analysis that can help inform wider company strategy.
Automation allows pricing teams to respond to rapid fluctuations in demand in real time. That leaves more time for the important strategic work of what to sell and when.