Pricing Strategy

Treat Price as a Lever, Not a Reaction

Model elasticity and contribution so every price move has a clear expected outcome.

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elasticity_model_v4.py
Optimization
+12.4% GM
List Price
$124.50
Elasticity
-1.8
Contribution
High

The Problem

Most pricing decisions sit between “gut feel” and spreadsheet math.

  • List prices and discounts are inherited, not backed by elasticity or contribution analysis.
  • Promotions focus on volume, with little visibility into margin and cannibalisation.
  • Ecommerce and offline channels follow different rules; customers see inconsistent pricing.
  • Finance, sales, and marketing use different baselines when evaluating impact.

The ConsequenceResult: volume may grow, while unit economics quietly deteriorate.

Pricing Optimization Services

A comprehensive, data-driven approach to regaining control over your revenue levers.

01
Strategy

Pricing Strategy & Governance

Define how pricing decisions are made, tested, and monitored.

  • Pricing framework by product role (traffic, margin, halo).
  • Guardrails for floors, ceilings, and discount ranges.
  • Governance model & approval cadence.
policy_config.json
Active Policy
Global Margin Guardrails
ENFORCED
MIN_MARGIN_THRESHOLD 18.5%
APPROVAL_TRIGGER Δ Price > 5%
ERP
Shopify
Flat Files
Ingestion
Normalization Engine
Output Table
clean_transactions_v2
02
Data

Data & Measurement Foundation

Build the data layer required for serious pricing work.

  • Clean transaction-level data with price, discounts, and costs.
  • Product hierarchy and attribute mapping.
  • Baseline KPIs: realization, GM, AOV, sell-through.
03
Elasticity

Elasticity & Sensitivity Modeling

Quantify how demand and margin respond to price changes.

  • Price elasticity estimates at SKU & segment levels.
  • Cross-price elasticity for substitutes.
  • Demand curves and scenario planning.
Model Output
Demand Sensitivity
Coeff
-2.4
Rev Impact
+8.2%
Vol Impact
-3.1%
markdown_logic.js
1if (sku.inventoryWeeks > 12) {
2  // Trigger clearance action
3  return { action: "MARKDOWN", depth: 0.15 };
4}
5else {
6  return { action: "HOLD" };
7}
04
Optimization

Price, Promotion & Markdown Optimization

Turn models into specific pricing and promo actions.

  • List price recommendations by product & channel.
  • Discount structures (depth, duration, eligibility).
  • Markdown strategies for inventory aging.
05
Experiments

Experimentation & Continuous Improvement

Control change through structured tests and monitoring.

  • A/B test designs for price and promo changes.
  • Uplift analysis for revenue, margin, and conversion.
  • Ongoing monitoring dashboards for promo ROI.
Experiment #992
Price Ending .99 vs .95
Stat Sig (98%)
Conversion
2.4%
0.3% Lift
Margin $
$45.20
$1.12 Lift
Confidence Interval: 95%

Typical Use Cases

Ecommerce and retail

Optimise list prices, promo calendars, and markdowns to balance growth and margin.

Subscription and SaaS

Test plan structures, price points, and discount policies by segment.

B2B pricing

Rationalise tiers, volume breaks, and contract discounts using contribution data.

Why Rudder Analytics

Economics-first approach

Pricing decisions grounded in elasticity, contribution margin, and unit economics.

Full-stack capability

Data engineering, modeling, dashboards, and experimentation from one team.

Channel- and tool-agnostic

Recommendations integrated with your existing ecommerce, ERP, and CRM stack.

Executive-ready outputs

Pricing work framed for finance, commercial, and leadership review.

Turn Pricing into a Controlled Lever on Revenue and Margin.

Book a session with Rudder Analytics to review your current pricing and discount approach.

Book a Pricing Analytics Session