Pricing and Revenue Optimization Analysts
Pricing and revenue optimization analysts perform similar roles. A revenue analyst seeks out ways to improve a company’s revenue to maximize profits, while a pricing analyst aims to keep prices for products and services competitive for the same purpose. Although both roles examine different sets of data, their methodology overlaps in several regards. These professionals track company funds or revenue, compare these figures to industry trends, and develop new strategies for increasing profitability. Due to the abundance of new channels and sources, data collection, analysis, and visualization are integral to both pricing and revenue analyst positions.
On a general level, data sets assist pricing analysts with examining industry trends to establish competitive and multifaceted pricing strategies, including for sales and seasonal changes, and to grab a greater amount of market share. Regardless of the merchandise sold, data involves figures 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. Numerical values 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?
Within a company’s operations, revenue analysts share many responsibilities with accountants—in fact, both may be required to obtain a CPA license. However, while accountants keep track of incoming financial sources, revenue analysts have to further consider how to allocate the amount to best fulfill company objectives and are expected to develop strategies for improving revenue.
On a day-to-day basis, these responsibilities include:
- examining incoming and outgoing revenue sources in reference to the company’s financial cycles;
- tracking the profitability of certain products and services;
- maintaining compliance with and compiling supporting documentation for all state and federal government organizations;
- putting together reports and visualizations on a monthly, quarterly, or annual basis to illustrate the progress of new and existing initiatives;
- extracting relevant data sets, analyzing these figures, and making financial-related business decisions from your insights;
- using those insights to assess a business’s financial transactions, contracts, and practices to mitigate risk and develop a revenue control plan;
- working with other departments, especially sales, to carry out a revenue control plan; and
- meeting with management and department heads to present and discuss your findings.
Data sources vary, however. Some revenue analysts may strictly be looking at a company’s own figures, relative to its business segments, departments, products, or services, to track their progress and identify ways to improve revenue. Other professionals are expected to include outside sources, including economic data involving the company’s industry, local market, or competitors. Especially as market trends fluctuate, these exterior sources often provide an additional layer of context to the numbers and trends.
What Does a Pricing Analyst Do?
At a glance, a pricing analyst’s responsibilities appear similar to what a revenue analyst does. However, these professionals examine data from multiple interior and exterior sources to keep track of pricing strategies, often utilizing quantitative and qualitative analysis to examine market trends, competitors’ practices, market share and margins, and customer behavior.
The data and insights then assist with forecasting and predictive modeling, which indicate how new pricing could influence profitability, sales, margins, and the company’s market share. At the same time, pricing never exists in a vacuum, so the analyst will work with both sales and marketing teams to ensure their strategy is carried out and promoted fully. Once these efforts begin, pricing analysts and marketing professionals may examine how competitors react and will adjust their respective strategies based on their behavior. Industry trends and customer behavior may unveil new sources for data, including additional, untapped customer segments, that may further influence the existing and future pricing strategies.
When many of these changes occur, pricing analysts, as well as collaborating marketing and sales professionals, have to adjust and implement their updates quickly. To streamline this process, pricing analysts may need to look for or develop their own tools to carry out such tasks without delay or errors. Similarly, you may be expected to create new data refinement techniques for identifying information about competitors’ prices and promotions.
As well, if your company creates its own products, pricing often plays a role during the research and development phase and could influence how the item is packaged and marketed. Your insights directly influence these processes, particularly if a new or revamped product will be profitable. To support these suggestions, a pricing analyst regularly compiles sales reports and projects how much revenue certain products will generate.
General Responsibilities for Pricing and Revenue Analysts
Beyond the two occupations’ differences, the two roles share multiple competencies and responsibilities:
- On a regular basis, you use database management programs, data mining techniques, and business analytics knowledge to extract, compile, and examine data.
- You’re expected to be well-versed in statistics.
- Especially if your findings affect other departments’ processes, you’ll be expected to implement your system, train employees on the new protocols, and explain how your analysis will help with growing company revenue or sales.
- Because the figures you examine are often viewed against industry benchmarks, you need to regularly monitor your competitors and market for any changes and trends and may have to further factor in consumer buying and spending behavior.
- Along with services and prices, you may further need to factor in the cost of producing and marketing certain items.
Education and Experience
Pricing and revenue management analysts aren’t entry-level roles, and candidates typically require a combination of experience and education to reach this point in their career. That said, both are mid-level, highly skilled positions 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. As well, 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. Today, though, as pricing and revenue analysts need to have strong data analysis skills, having an advanced degree, including a Master of Business Administration or a Master of Science in Business Analytics, sets you apart from other applicants.
Generally, individuals move up 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 draw up an effective data-based solution;
- be ready to effectively communicate their ideas and strategies to technical and non-technical professionals alike;
- 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 that won’t financially pan out.
Demand for pricing analysts, however, is a more recent development. Based on a study from Deloitte, pricing 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 Bureau of Labor Statistics, demand for revenue and pricing analyst roles is expected to grow between 2018 and 2028. Budget Analysts, who primarily focus on an organization’s finances, will experience 4% more demand, while companies are expected to need 6% more Financial Analysts to assist with investment decisions. Market Research Analysts, which encompass pricing, are predicted to see 20% more positions.
Because both functions are integral to organizational operations, several fields and industries need pricing and revenue management analysts:
- Product manufacturers
- Food and beverage production
- Health care
- Engineering and architecture
- Logistics and transportation