Revolutionizing Pricing Science to Save Client Retention
The Challenge
A specialty online retailer shifted to competitive price-matching, reducing our client's influence to 0%. Time constraints demanded immediate results to secure client trust before contract expiration, and the lack of competitor price sensitivity modeling limited strategic capabilities.
Our Approach
We developed a comprehensive approach to address the client's critical shift away from elasticity-driven price optimization and create a solution that would not only save the account but become a competitive advantage.
Recalculated elasticity using competitor prices as inputs, identifying product sensitivity variations
Segmented products by competitive sensitivity and revenue contribution with actionable visualizations
Developed a hybrid pricing strategy for different product categories based on sensitivity
Integrated competitive effects into demand curves, enhancing elasticity models with new calculations
What We Delivered
We created a 'competitive price elasticity' (PE-CP) framework that segmented products by competitive sensitivity and revenue contribution. This allowed for a hybrid strategy: pricing high-sensitivity, high-revenue products competitively while applying elasticity-driven optimization elsewhere. The innovation was integrated into demand curves, enhancing the core elasticity models.
Results
The implementation resulted in dramatic improvements in client retention and revenue growth. We secured renewal by regaining control over 59% of client revenue (up from 0%) and generated additional revenue from analytical services using competitive elasticity insights. The approach was so innovative it resulted in a US patent.
59%
Revenue under optimization control
100%
Client retention achieved
1
US Patent secured
Project Details
Industry
Retail & Pricing Analytics
Company Size
Mid-size (200-500 employees)
Location
Global operations, HQ in United States
Services
- AI Strategy & Planning
- Data Science & Modeling
- Competitive Analysis
- Product Innovation
- Patent Development
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