Winner of the tt100 Management of Technology Award for 2021, category for medium enterprises

How much more are your customers prepared to pay?

In these days of skyrocketing fuel prices, companies’ costs are rising and for most businesses, it is inevitable, unfortunately, that they will have to ask their customers to pay more. The million rand question of course, is how much more?

This is a question that data science company Analytics Advertising is well equipped to help answer.

Using its data extraction, analysis and scenario-modelling capabilities, its systems and software can come up with a very detailed understanding of how sensitive a particular client’s customers would be to prospective price changes.

“For example, we can tell what will happen with customer behaviour for every 1% price increase. We can also predict what products or services will be affected and what impact a price increase will have down the line, say in two months’ time,” says Pabelelo Banks, chief financial officer at Analytics Advertising.

This kind of insight is obviously invaluable in highly competitive markets but businesses with high levels of brand loyalty also need to know their customers’ limits, she says. “Even with brand-loyal customers, you can move pricing up to a point but if you go beyond that peak, no matter how slightly, you will start losing customers.”

Data science is also useful in other areas of business, such as in pinpointing the risk appetite of investors. “With data science, you can determine exactly who you are dealing with and how much they are prepared or not prepared to invest,” says Pabalelo, adding that there is growing appreciation among more and more sectors of the economy as to how vital data analysis is to their businesses.

“For instance, industries such as tourism and hospitality have a lot of data but they haven’t necessarily been using it,” she says. “Now they are realising they can use it to understand what’s working, what’s not and why.”

While the data science market itself is becoming more crowded, Pabalelo says a strength of Analytics Advertising is its use of visualisation to show its clients what is happening with their customers. “Clients don’t want formulas or complicated calculations. They want to see what the trends are and, most importantly, they want to know what they can do about it.”