Target Pricing: How to infer costs of digital competitors?

Being obsessed about customers and not about rivals may be the most important aspect of executing a Customer Centricity tactic that strengthens the business model. However, one of the most important aspects to improve the competitiveness of digital businesses is to solve the problems of customers, who are increasingly hedonist and stricter in their processes of buying goods and services.

Differentiation and an optimal cost base are two aspects often opposed in marketing and sales strategies development. Some questions that usually arise to all of us as customers are:

How often have you been charged for some product or service that is not worth it?
How many times have you seen companies fail because of a bad pricing strategy?

We all know that today, thanks to the development of digital business, customers can make better-informed decisions about the products and services they purchase. That is why companies have to innovate their analytical models to improve decision making.

"Companies that adopt the strategy of confrontation should be experts in developing low costs, high-quality products and the functionality demanded by customers."

CFOs and Management Accounting experts at benchmarking meetings to improve digital business, have concluded these four main challenges to consider in financial analytics:

Companies are facing higher levels of competition benefit more from cost reductions than from price increases.
Product and customer life cycles are becoming smaller.
80% of the resources are committed in their costs from the stage of designing the business and digital product.
Traditional profitability and costing approaches follow an entirely different logic.