Improve Your Customer Value Perception Using AI
Rule-based pricing tools match competitors across the board—extremely profit dilutive with minimal perception impact. Our AI agents identify the products that truly matter to customers and enable targeted investments that deliver disproportionate impact on value perception, helping you gain market share without sacrificing profits.
You Invest in Price But Don't Get Credit
Many retailers invest millions in price reductions but customers still see them as expensive. The problem? They're investing in the wrong products. Customers perceive value based on the small subset of products that they are most exposed to, and do research on—if you're not competitive on those, your other investments are invisible.
- Actual price index shows you're competitive (100-110 vs competitors)
- Perceived price index remains stubbornly high (120-130)
- The gap exists because investments aren't reaching the products customers notice
- Closing this gap requires knowing exactly which products drive perception
Actual vs Perceived Price Index
100 = Same price as competitors
Why the gap? You're investing in price, but on products customers don't use to judge your value. Invest in KVIs to close the perception gap.
Strategic Role Assignment
Strategic Roles for Every Category
Not all categories serve the same purpose. Our AI plots each category on a Customer Score vs Business Score matrix to assign strategic roles that guide differentiated pricing strategies.
- Core Performers: High customer & business scores—drive both traffic and profit
- Customer Magnets: High customer score, lower business score—competitive pricing to drive visits
- Profit Builders: High business score, lower customer score—build margin contribution
- Essentials: Lower scores on both—manage efficiently with selective focus
Invest in the 10-15% That Customers Notice
Customers judge your value based on a small subset of products—Key Value Items (KVIs). Our AI identifies which products drive perception by analyzing Price Importance, Price Visibility, and Research Intensity, then calculates a Customer Value Perception Score for your entire assortment.
- Super-KVIs: The products that define your price image—invest aggressively
- KVIs: Important comparison items—maintain competitive positioning
- Non-KVIs: Products customers don't compare—protect and grow margin here
- Data-driven classification replaces gut feel and tribal knowledge
Customer Value Perception Score
Strategy: Invest in price on Super-KVIs and KVIs to win perception. Take margin on Non-KVIs where customers don't compare prices.
Know Which Lever Drives Volume
Price vs Promo—Know Which Lever Works
A single product can have very different responses to everyday price changes versus promotional discounts. Understanding this difference is critical: investing in the wrong lever wastes money and fails to drive the volume response you need.
- Regular price elasticity: How volume responds to everyday price changes
- Promo elasticity: How volume responds to promotional discounts
- Some products respond strongly to promos but ignore everyday price cuts
- AI calculates both elasticities for every product, guiding investment decisions
Fund Investments from Margin on Non-KVIs
The secret to value perception without profit dilution: invest where customers notice (KVIs), take margin where they don't (Non-KVIs). Individual buckets may show loss, but combined you achieve incremental volume, revenue, profit AND improved value perception.
- Price-down on KVIs (15% of assortment) to win perception
- Price-up on Non-KVIs (85% of assortment) to fund investments
- Combined result: Net profit PLUS improved perception
- Rule-based matching across the board would cost 3x more with worse results
Fund Investments from Margin on Non-KVIs
The secret: Price-ups fund price-downs. Individual buckets may show loss, but combined you achieve profit AND improved perception. This is how you win without the profit dilution of blanket competitor matching.
Humans Cannot Analyze 50K SKUs at This Granularity
Understanding elasticity, customer importance, and competitive dynamics at the individual product level is beyond human capacity. It's only with AI and data-driven decision making that you can make these micro, de-averaged decisions across your full assortment—at the speed your market demands.
- Analyze every product's elasticity, both regular and promotional
- Classify thousands of SKUs by customer perception importance
- Calculate optimal investment and margin strategies per product
- Continuously update as market conditions change
- Execute precision pricing that humans simply cannot replicate at scale
How It Works
Connect Your Data
We ingest your transaction, product, competitor, and customer perception data to build a complete picture of what drives value perception.
AI Identifies KVIs
Our agents analyze purchase patterns, price sensitivity, and perception drivers to classify every product—Super-KVI, KVI, or Non-KVI.
Optimize Investments
AI prescribes targeted price investments on KVIs funded by margin from Non-KVIs, maximizing perception impact while protecting profit.
Track & Iterate
Monitor the perception gap in real-time. See how your targeted investments close the gap between actual and perceived value.
Frequently Asked Questions
Stop Wasting Price Investments
Rule-based competitor matching is profit-dilutive and ineffective. With Hallon's AI agents, you'll invest precisely where it matters—improving customer value perception while growing profits.