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Need Help With Margins? Analytics Could Help

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When product prices are too low, companies shortchange themselves. When prices are too high, customers are reluctant to buy. But big data has been helping companies strike a balance between the two.

By analyzing current pricing strategies, Shaw Industries, a flooring subsidiary of Berkshire Hathaway (BRKA), found that more than half of its products were underpriced, according to Zilliant, a business-to-business data consulting company.

As a result of pricing adjustments based on analytics, Shaw saw its margin in dollar terms increase by more than 5 percent in a pilot study that's been deployed across the company's commercial carpet division, Zilliant says.

"What Zilliant was able to do is find the details of the attributes of a given project and use that to provide very contextualized guidance to sales people so they wouldn't leave money on the table when pricing out projects," said Eric Hills, senior vice president at Zilliant.

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Pricing is just one aspect of company success however. Having the products that can help lure customers away from competitors like Mohawk Industries (MHK), Armstrong World Industries (AWI) and Interface (TILE) still poses a challenge for Shaw.

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