Dynamic pricing is a pricing strategy where the price of a product or service is adjusted based on various factors, such as market demand, supply conditions, customer behavior, or other relevant data. Instead of having a fixed or static price, dynamic pricing allows prices to fluctuate and change dynamically.
The goal of dynamic pricing is to optimize revenue by setting prices that align with market conditions and customer willingness to pay. By leveraging data and algorithms, you can dynamically adjust prices to achieve specific objectives, such as increasing sales during slow periods, maximizing revenue during peak demand, or responding to changes in market dynamics.
How does it work in Convious?
We have developed various models customized to help you achieve your specific goal. To get started, you'll need to create a product with a pricing type called RTP (Real-Time Pricing) and define the minimum and maximum price ranges within which the prices can fluctuate. Rest assured, the prices will always remain within the provided ranges.
Next, you have the Global Pricing Settings, where you can select your primary objective. Do you want to attract more visitors? Or perhaps you already have sufficient visitors and want to evenly distribute them while enhancing user experience, all while increasing revenue on busy days.
You have the option to add your own preferred adjustments to the pricing. This means you can make additional modifications or refinements to the pricing strategy to better align with your specific goals and requirements.
Click here to set up RTP in your Control Panel.
What are the primary factors that contribute to price fluctuations?
The visit experience is influenced by various factors, such as weather conditions or holidays that create a festive atmosphere. Optimal weather or special occasions tend to attract more visitors, resulting in a more enjoyable overall experience compared to visiting on less favorable days (while ensuring it's not overly crowded). For indoor venues, different factors come into play. However, even on a gloomy day, the mood can improve if you pay a lower price for admission.
Based on historical data, we generate forecasts to predict the future level of attendance at your venue. We take into account multiple environmental factors and continuously evaluate the accuracy of our forecasts to make necessary price adjustments. Prices have the power to influence visitor behavior, and this is where the real-time magic happens. We can promptly respond and adapt to changing circumstances.
What are the distinctions between Dynamic Pricing and Real-time Pricing (RTP)?
Dynamic Pricing and Real-time Pricing are two pricing strategies with some key differences:
Dynamic Pricing involves adjusting prices based on various factors such as demand, supply, customer behavior, and market conditions. The prices can change over time, allowing businesses to optimize revenue and enhance customer experience.
Real-time Pricing is a specific case of dynamic pricing. It refers to pricing that is updated and communicated to customers in real-time or near real-time. Real-time Pricing often involves frequent price updates based on immediate market conditions or other factors specific to the industry or product.
While Dynamic Pricing encompasses a wider range of pricing strategies, Real-time Pricing focuses on immediate price adjustments based on up-to-the-minute information.