Competitor Index Calculator

What is Competitor Index?

The Competitor Index helps businesses understand their pricing position relative to competitors. It's a simple calculation that shows whether your prices are higher or lower than the competition, expressed as a percentage.

Think of it as your pricing GPS guiding you through the competitive landscape of your market.

How to Calculate Competitor Index

The formula is straightforward:

[\text{Competitor Index} = \frac{\text{Competitor's Price}}{\text{Your Price}} \times 100]

Where:

• Competitor's Price is the price of the product or service offered by your competitor.
• Your Price is your product or service's price.

Steps to Calculate

1. Determine the Competitor's Price: Find out how much your competitor is selling their product or service for.
2. Determine Your Price: This is what you're selling your corresponding product or service for.
3. Apply the Formula: Divide competitor's price by your price and multiply by 100.

Calculation Example

Let's say your competitor's price is $500 and your price is $750:

[\text{Competitor Index} = \frac{500}{750} \times 100 = 66.67%]

The Competitor Index is 66.67%.

What Does This Mean?

A competitor index of 66.67% means your price is roughly 33.33% higher than your competitor's. This could indicate premium positioning or an opportunity to evaluate your pricing strategy.

Interpreting Results

Reference Examples

Strategic Implications

• High Index (you're cheaper): You may have room to increase prices without losing competitiveness.
• Low Index (you're pricier): Consider whether your value proposition justifies the premium, or if price adjustments are needed.
• Equal (100%): You're matched with competitors; differentiation may need to come from other factors like quality or service.