How uni-max increased their margin by more than 30% by combining the right acquisition strategy and pricing tactics

Case study summary

 
Client since 

01/2021

Client’s goal
Margin increase, new client acquisition

Provided services

  • Dynamic pricing process
  • MAP policies management
  • Monitoring and analysis of competition
  • Price optimization of non-competitive goods

Results
32% margin increase, 29% increase in new client orders after the first three months

The uni-max faced problems with suboptimal prices and difficulty in updating them. At the same they time wanted to be able to quickly set price discounts on selected products to acquire new customers. Initially they managed the prices manually in excel, with occasional checks on competitors’ prices. They then tried to automate pricing through a low-cost solution, but this was not satisfactory in terms of accuracy and functionality. Therefore, uni-max chose Disivo as their advanced pricing solution.

As part of the training and initial setup, we consulted uni-max and together we have chosen a strategy that was designed to help them achieve their goals – increased margins and easier acquisition of new customers. After the first three months, there was a 32% increase in margin and a 29% increase in new orders.

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This project is led by
Martin Svoboda | Head of Marketing

One of the oldest players in the professional and hobby tool segment has always relied on technical innovations, and launched its first online store in 1998. This is also why two years ago uni-max decided to try a tool for tracking competitive product prices. However, its use was not ideal, the tool was still in its infancy, had many bugs and proved insufficient for uni-max’s use. So, in uni-max they worked with price by testing different price points.

“We tested clients’ sensitivity to price. We took a product, set a price for a week, then tried a different price for a week, then a third price. We watched what that did to sales or margins.  This was to see at what price levels that product was giving us the biggest absolute margin. This was systematic, but quite expensive to operate and maintain,” says Martin Svoboda, Head of Marketing.

But after nine months, they returned to monitoring of the competition. The initial problems were eliminated and the tool worked much better.

Why did Uni-max change their pricing strategy?

Today, manual repricing is very obsolete and time expensive. That’s why we looked for other ways

They found a lowcost tool for dynamic pricing. After testing it, Uni-max found out that it’s too simple.

In the end, Uni-max got an offer from Disivo to combine price monitoring and dynamic pricing into a single app.

“During a few meeting we clarified the technical details, overcame the usual ‘birth pains’ in the form of integrations between the online store, Disivo and the ERP system and successfully launched Disivo in January 2021,” says Martin Svoboda, who uses Disivo himself.

“Disivo is so easy to use, UI is really nice. On top of that your customer success is very active and helpful” adds Martin Svoboda.

What is their experience after using Disivo for several months?

We knew that we were selling some products very expensive compared to our competitors and others relatively cheap, but of course we didn’t have an overview of the whole range. With 10,000 products, you just can’t manage pricing in a manual way..

“Disivo came up with an interesting solution, which we tested and evaluated. We analyzed that it has a positive impact on our financials. 

For a couple of categories, we knew that we were too expensive. We used Disivo to set up repricing strategies based on stock, purchase prices and competition prices. That led to decrease of our prices and unit margin. But thanks to huge increase in turnover, total margin increased a lot.

For products that got more expensive, we didn’t observe decrease in sales. This way, we also increased our margin.”

 
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What else has Disivo brought and what do they use it for, besides monitoring the competition and automatic repricing? 

“For us it’s not just about increasing total margin – even though that’s the main goal in the long run. We are using Disivo for a new clients’ acquisition. We tried many strategies when it comes to acquisition strategy, but it didn’t work that well. Until now.

Instead of investing a lot of money into brand campaigns, we decided to choose a couple of key categories and be visible as a cheapest on the market. We understand that we won’t turn immediate profit on it. But it’s great for remarketing and other strategies.

It’s the acquisition goal – acquire a new customer and turn profit when they order the next time.”

 

“So far so good” says Martin Svoboda. Increase of new orders in comparison to a previous year is already notable.

And what does Uni-max plans next?

“We plan to add additional products to automated repricing – including our own products. That’s even more interesting opportunity. You can’t really match a competitor’s price to your own product. That’s why we will explore other options that Disivo offers. Automated models are built exactly for that.

That way, we will soon be able to reprice our whole portfolio of tens of thousands”

What advice would you give to companies facing a decision, whether to choose Disivo?

Customer will always be price sensitive. Always was and always will be. They have many tools to choose the best online store. That’s why dynamic pricing makes so much sense. It’s the competitive advantage to have.

 

 

Martin Svoboda, Head of Marketing

Ready to achieve a similar success?

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