Why is the future of pricing based on A.I.?

There are a few different ways of pricing a product, among which it is common to price based on costs, based on competition or based on demand. Regardless of what would be the best pricing methodology for a company, Artificial Intelligence can play an essential role.

When we think of cost plus, A.I. can revolutionize a company’s cost analysis, enabling a level of granularity, update frequency and assertiveness that would be very difficult using traditional methods.

Within pre-established parameters, the use of Machine Learning can leverage pricing decisions based on competition. The result obtained from combining human beings with the power of machine learning is even greater when we are faced with the complex price dynamics of an industry.

The increased accuracy of predictive models, using Artificial Intelligence techniques, completely changes the game of demand-based pricing. The more assertive the demand forecast, the better the pricing decision for a given product. This gain becomes even more evident when the evolution of predictive models reaches the support and operations areas, so that the entire company benefits from optimization.