Dynamic Pricing: definition and benefits

dynamic pricing post

Dynamic pricing, also called smart pricing, price optimization, pricing customization, pricing recommendation, or strategic pricing, is a relevant point in strategic planning of companies which has been increasingly calling for special attention from CEOs, CIOs, sales management and revenue management.

According to Forbes, the main companies in the digital world who seek to stand out in a competitive market use dynamic or smart pricing. This kind of strategy can be applied in different sectors, helping companies achieve the quality and pragmatic marketing necessary for success.

In this article, we are going to show some benefits that dynamic pricing brings.

What is dynamic pricing ?

Dynamic pricing is a strategy used to establish flexible market prices for products and services offered by companies, taking into account some variables such as balance between supply and demand, seasonality and competitive strategy. This strategy allows companies to adapt to the market quickly and competitively.


For a better understanding of the advantages of investing in dynamic pricing we show you some benefits that this strategy can provide for your business.

Profit Maximization

Using dynamic pricing, it is possible to track the value of one specific product more quickly, and simultaneously track competitor price fluctuations. This offers a vantage point that allows you to follow trends in order to increase your profit margin, without fearing the loss of market space. When a market trend results in the lowering of prices, it’s possible to prepare to increase the number of sale conversions then profit by volume as result.

Understanding the consumer behavior 

Another dynamic pricing benefit is the fact that it assists in understanding and addressing key consumer behavior points, for example, the types of promotions that work best and the best-selling products in a given period, among other things.

Benchmarking Automatization

In addition to allowing more competitive prices compared to the competition, dynamic pricing is a way to quickly keep up with the competition, allowing the company to prepare against threats or seize opportunities. It can also help in observing competitors to create attractive differentiators for your company.

Dynamic Pricing Implementation 

Based on sales indicators and pricing data, it is possible to create a tool to review prices at the desired frequency, based on the company’s rules. The recommendation is that the data be structured through a Data Lake. 

The usage of Advanced Analytics techniques and Artificial Intelligence (AI) algorithms foster improvements in pricing systems. By analyzing past data,  it’s possible to look for successful pricing patterns,  or to produce complex models for AIs. This allows for the development of tools driven by strategic goals ​​that can define prices based on present or future factors. In other words, AI can help organizations reach the point where they’d like to be.

Want to know more about how to implement dynamic pricing in your company? Click here.

Conclusions and recommendations

Dynamic pricing is a huge opportunity for your company’s growth, when you take advantage of all that it offers, it allows for superior planning while avoiding loss in conversions.

The decision to make prices dynamic is not simple, so it is important to choose a suitable data analytics supplier. Some aspects to be analyzed when looking for a supplier for the pricing solution can be found in this article: How to choose the best AI and Data Analytics provider?

Do you like our content? rite a comment and share on your social media.

What is Aquarela Advanced Analytics?

Aquarela Analytics is Brazilian pioneering company and reference in the application of Artificial Intelligence in industry and large companies. With the Vortx platform and DCIM methodology, it serves important global customers such as Embraer (aerospace & defence), Scania and Randon Group (automotive), Solar Br Coca-Cola (beverages), Hospital das Clínicas (healthcare), NTS-Brasil (oil & gas), Votorantim Energia (energy), among others.

Stay tuned following Aquarela’s Linkedin!


Leave a Reply

Your email address will not be published. Required fields are marked *

Share via
Send this to a friend