Leveraging Competitor Pricing in B2B: Strategies for Smarter Decision-Making (Part 2)

In Part One of this blog series, I explored how businesses can approach competitor pricing without falling into common traps—and how pricing professionals can make informed, actionable decisions. Now, in Part Two, I'm diving deeper into the complexities of competitor pricing, including its challenges, key legal and ethical considerations, and a practical framework for responding to price changes.

Challenges in Using Competitor Pricing Data

While competitor pricing data can provide valuable insights, it comes with inherent challenges that must be addressed to use it effectively:

Mapping Competitor Prices to Your Products

Competitors’ offerings don’t always align perfectly with your own, making direct price comparisons difficult. Even if you sell the same product, differences in product IDs, descriptions, or configurations can create obstacles. Customers may map competitor products to yours inconsistently, further complicating analysis.

Timeliness of Data 

Depending on how you gather competitor pricing data, there may be delays between when prices are updated by competitors and when you receive the information. Internal inefficiencies, like processing or formatting delays, can further exacerbate this lag. By the time you’re ready to respond, the data may already be outdated.

Understanding Which Price You’re Seeing 

The price you see isn’t always the price the customer pays. Competitors often display static list or market-facing prices, while discounts, promotions, or pocket prices fluctuate behind the scenes. Acting on these visible prices without understanding their context risks overestimating or underestimating your competitor’s true pricing.

Incomplete Price Structures 

What looks like a low competitor price may exclude important cost components, like shipping, installation, or other terms and conditions. Conversely, high prices may include these factors, creating a misleading perception of premium pricing. Total Cost to Serve (CTS) is a critical consideration here—unless you can see the full price structure, you risk making decisions based on incomplete information.

Pro Tip: Some companies intentionally inflate visible prices to mislead competitors. For example, one company I know displayed prices three times higher than their actual rates unless users logged in as verified customers in their web portal. Situations like this emphasize the importance of validating pricing data.

Legal and Ethical Considerations

Aside from the challenges pertaining to competitor pricing information itself, there are additional challenges when considering legal and ethical use of such data. Here are some guidelines to mitigate your risk:

• Use only publicly available information: This includes prices listed on competitors’ websites, published price lists, advertised promotions, and industry reports or publications. Leveraging this type of data ensures compliance with applicable laws and minimizes ethical risks.
• Leverage technology ethically: Software or automated monitoring tools should only collect public data and comply with industry regulations and consumer privacy standards. Avoid deceptive practices like posing as customers or using unauthorized access to competitor portals.
• Respect legal boundaries: Never engage in anti-competitive practices such as price-fixing or collusion with competitors. Additionally, refrain from using confidential information like private invoices or internal documents obtained improperly.

By following these guidelines, companies can maintain transparency, build customer trust, and ensure fair competition within their market.

A Practical Framework for Responding to Competitor Price Changes

When competitors change their prices, it’s tempting to respond immediately. However, a thoughtful, structured approach ensures your decisions are aligned with your strategy.

Quantify the Change 

Evaluate the percentage by which the competitor adjusted their prices. Model a similar change to your impacted products. Would such a change align with your minimum margin or maximum discount rules? Which customers would be impacted the most? Do you have the ability to assess willingness to pay (WTP) to estimate the impact on volume?

Align with Your Strategy 

This is where your pricing strategy, especially if it’s value-based, becomes crucial. If you know and understand the value that your product or service carries within the market, it becomes much clearer whether you should adjust your prices in response to competitors’ price movements.

For example, if your value-based pricing strategy shows that your product’s worth is derived from features or benefits that competitors cannot match, then a competitor’s price decrease might not warrant any action at all. Similarly, if a competitor raises their prices, it might signal an opportunity to hold steady or even lower prices to gain market share.

Your strategy should act as your guide, dictating when—and if—it makes sense to adjust pricing, based on value, not just market noise.

Assess Larger Trends 

Supplement competitor data with broader insights, such as demand, inventory, or supply chain data shared by distributors. When viewing competitor price data in the larger context of other trends, you can more accurately triangulate on what is happening within your market and determine if a price change is necessary. 

Understand the “Why”

Analyze the likely reasons behind a competitor’s price change. Understanding these reasons can help you determine if similar factors apply to your own situation and whether they justify making a price change on your part.

Final Thoughts: Competitor Pricing Is Just One Piece of the Puzzle

Competitor pricing data can provide valuable insights, but it’s only one piece of a much larger puzzle. To use it effectively, you must also consider market indices, supplier trends, customer feedback, and your unique value proposition.

By understanding the challenges and limitations of competitor pricing data—and using it as an input rather than a definitive guide—you’ll avoid costly missteps and build a strategy that reinforces your long-term goals. Competitor pricing should inform your strategy—not dictate it.

Looking for expert guidance to refine your pricing strategy? Contact us today to learn how Zilliant can help you leverage competitor pricing effectively while maintaining profitability and competitive edge.

Matthew Knaggs is a Senior Business Value Lead at Zilliant, where he works with customers and prospects to demonstrate the ROI and business impact of implementing Zilliant solutions.