The Anatomy of a Successful Pricing Analyst

By Philip Huthwaite on May 12, 2016

The Bare Bones

A pricing analyst is a business professional who specializes in the study of pricing, with the aim of determining the best prices for their business. Many companies employ full-time pricing analysts, and it is also possible for a company to hire an analyst as a consultant for a particular project or concern.

Pricing analysts look at industry standards, playing close attention to the pricing strategies of their competitors. They use mathematical analysis to track pricing trends in the marketplace using industry databases, catalogues and other industry sources. They study consumer habits to determine how much people are willing to pay for various products, and to look for patterns in consumer spending.

They are interested also in the cost of production of various items, the amount of profit a company wants to make, and associated costs like marketing. They may be involved with the packaging and presentation of products, which can influence how much people are willing to pay, and they provide advice during the research and development phase to help create the most income for the company.

They work with a variety of departments, including sales, product management, marketing and accounting, to ensure that their methodology complies with company policies and maximises profitability. Other duties that are included under a pricing analyst's job title include maintaining price lists, contributing content for sales proposals, reviewing price quotes, generating pricing reports on sales revenue and preparing revenue forecasts and budgets for project managers.

 

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Hands on

As a pricing analyst you will:

  • Provide pricing analysis for management

  • Perform margin and pricing analysis in order to support business initiatives

  • Monitor and update commercial price lists

  • Validate sales quotations for accuracy and profitability

  • Develop a system of communication, documentation and review of internal and external comparative pricing data

  • Identify opportunities to optimize sales and profitability through pricing strategies

  • Confer with sales and marketing teams to develop proposals

  • Prepare multi-year cost and pricing models that may include labour, materials, subcontracts, travel and other relevant costs

 

Using your head

Pricing is intensely psychological, which means that you need to have a knowledge of human psychology in addition to a deep understanding of the business world. Pricing analysts need to think about how consumers interact with pricing, how other products in the same line are priced, and how prices may be altered in store. Choosing the right price can make a big difference in sales, even if the difference between prices under consideration is minimal.

 

What qualifications do you need?

A pricing analyst position generally requires (at least) a bachelor's degree in business administration, finance, mathematics, accounting, economics or a closely related discipline. Depending on the structure and level of skill needed for the job, employers sometimes prefer candidates with previous analyst experience. An MBA degree is desirable if you wish to work as a senior-level pricing analyst.

 

Where can you work?

Almost anywhere, including:

  • Companies that manufacture or distribute residential, commercial and industrial goods

  • Construction companies

  • Agricultural companies

  • Food and beverage

  • Private health care facilities

  • Colleges and universities

  • Banks and other financial institutions

  • Pharmaceutical companies

  • Transportation and logistics companies

  • Professional service firms and offices, such as legal, engineering, architectural and others

 

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Personality Traits

Some of the required traits include:

  • A natural aptitude in mathematics and statistics

  • Ability to think analytically

  • Attention to detail

  • Able to solve complex problems that involve competing priorities

  • Excellent written and verbal communication skills and business acumen

  • Customer centric attitude

  • An interest in lifelong learning and career development

 

Pricing Analyst Salary

The salary level of pricing analysts can vary, depending on your level of education and experience, the size and type of employer, the specific responsibilities of thejob, and many other factors.

 

The Bottom Line

Becoming a pricing analyst is a great career choice for those that are looking to work with numbers in a fast-paced job that offers plenty of room for growth and demands accuracy and accountability. It is a great career choice for those with an analytical mind, business acumen, excellent communication skills, and a passion for working with numbers.

 

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