Pricing and Revenue Optimization Analysts: How to Become One
As the cost of business goes up and circumstances change, companies are always looking for ways to optimize their revenue and plan for the future. This is where pricing and revenue optimization analysts step in.
Revenue and pricing optimization analysts perform similar duties. A pricing analyst endeavors to maintain competitive prices for products and services to grow a company’s revenue to maximize profits, while a revenue analyst searches for additional opportunities to aid a company in the same goal.
Find out more about pricing analytics, revenue analytics, and how to start a career in these accounting specialties.
About Pricing and Revenue Analysis
The methodology of pricing analysis and revenue analysis overlaps, even though both roles examine different sets of data. Both pricing and revenue analysts rack company funds or revenue, compare these figures to industry trends, and develop new strategies for increasing profitability. An abundance of new channels and sources for information make data collection, analysis, and visualization integral to what a pricing analyst and what a revenue analyst do.
Data sets help pricing analysts examine industry trends to establish competitive and multifaceted pricing strategies, including for sales and seasonal changes, and to grab a greater amount of market share. This data is retrieved from customers, competitors, and the industry. Traditionally, salespeople set these numbers, although due to the task’s growing complexity, dedicated skilled professionals are needed to keep both retailers and business-to-business (B2B) entities afloat.
Revenue management analysts, on the other hand, focus on a company’s finances, which may include merchandise sales deriving from pricing, as well as inventory movement, allocation, and selection. These numbers are less likely to fluctuate compared to pricing analysis, but the goal is the same: keep the business competitive and grow its profits without compromising operations.
What Does a Revenue Analyst Do?
Revenue analysts, also known as budget analysts, share many responsibilities with accountants inside a company —in fact, both may be required to obtain a CPA license. However, while accountants focus on keeping track of incoming financial sources, revenue analysts must further consider how to allocate finances to best fulfill company objectives and develop strategies to improve revenue.
On a day-to-day basis, according to the Bureau of Labor Statistics (BLS), a budget or revenue analyst job description includes:
- Combining program and department budgets into a consolidated organizational budget
- Estimating future financial needs
- Explaining funding requests to others in the organization, to legislators, and to the public
- Helping top managers analyze plans and find alternatives if the projected results are unsatisfactory
- Informing program managers of the status and availability of funds
- Monitoring organizational spending to ensure that it is within budget
- Reviewing budget proposals and funding requests from managers for completeness, accuracy, and compliance with laws and other regulations
- Working with program and project managers to develop the organization’s budget
What Does a Pricing Analyst Do?
At a glance, a pricing analyst’s responsibilities appear similar to those of a revenue analyst. However, what pricing analysts do differs as these professionals examine data from multiple interior and exterior sources to keep track of pricing strategies. Pricing analyst duties include using quantitative and qualitative analysis to examine market trends, competitors’ practices, market share and margins, and customer behavior.
Pricing analyst job duties are often part of a more general marketing analyst position. Typically, according to the BLS, a pricing or market research analyst job description will include:
- Analyzing data using statistical software
- Converting complex data and findings into understandable graphs, tables, and written reports
- Devising and evaluating data collection methods such as opinion polls, questionnaires, and surveys
- Gathering data on consumers, competitors, and market conditions
- Measuring the effectiveness of marketing programs and strategies
- Monitoring and forecasting marketing and sales trends
- Preparing reports and presenting results to management and clients
General Responsibilities for Pricing and Revenue Analysts
Beyond the occupations’ differences, the pricing and revenue analyst roles share multiple competencies and responsibilities. Each of these analytical roles must:
- Use database management programs, data mining techniques, and business analytics knowledge to extract, compile, and examine data
- Be well-versed in statistics
- Implement a system, train employees on the new protocols, and explain how their analysis will help grow company revenue or sales
- Regularly monitor competitors and the market for any changes and trends and may need to factor in consumer buying and spending behavior
- Factor in the cost of producing and marketing certain items
Education and Experience for Pricing and Revenue Analysts
Pricing and revenue management analysts aren’t entry-level roles, and candidates typically require a combination of experience and education to reach this position. Both are mid-level, highly skilled occupations that provide a degree of professional advancement.
Candidates should have already earned a bachelor’s degree, ideally in accounting, finance, statistics, economics, or computer science. Due to its accounting-adjacent responsibilities, many companies expect revenue analysts to have passed their Certified Public Accountant (CPA) Exam and worked in an accounting department. Since pricing and revenue analysts need to have strong data analysis skills, obtaining an advanced degree, including a Master of Business Administration or a Master of Science in Business Analytics, can set you apart from other applicants.
Generally, individuals move into a revenue or pricing analyst role after a few years in junior finance, auditing, or analysis positions.
Whether through education or experience, pricing and revenue analysts should:
- Be analytical thinkers ready to examine and research a variety of data sources
- Have strong math and statistics skills
- Feel confident working in a team environment
- Have experience and success with forecasting and modeling
- Be strong problem-solvers who can draft an effective data-based solution
- Be ready to effectively communicate their ideas and strategies to technical and non-technical professionals
- Be familiar with database languages and management software
Demand for Pricing and Revenue Analysts
Companies of all sizes need revenue analysts to look for expansion opportunities and reduce risks. Demand for pricing analysts, however, is a more recent development. Pricing has shifted from a sales, marketing, and product management responsibility into one needing a separate, data-based department. Professionals enter this field from finance, marketing, sales, or consulting.
According to predictions from the BLS, demand for revenue and pricing analyst roles is expected to grow through most of this decade. Budget and revenue analysts, who primarily focus on an organization’s finances, will experience 3% more demand, while the demand for financial analysts to assist with investment decisions is expected to grow by 5%. Market research analysts, which encompass pricing analysts, are predicted to see 18% more positions.
Because both functions are integral to organizational operations, several fields and industries need pricing and revenue management analysts, according to the BLS:
- Federal, state, and local government
- Financial and insurance companies
- Management, scientific, and technical consulting services
- Professional, scientific, and technical services
- Publishing industries
- Wholesale trade
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