Background
A global online services marketplace sought to unlock new revenue potential through pricing innovation as it evaluated strategic paths to further penetrate its large total addressable market. The client was exploring a future state in which it would play a more direct role in transactions between buyers and sellers, and pricing emerged as a key lever to support this evolution. L.E.K. Consulting was engaged to assess and enhance the client’s pricing framework to drive recurring revenue, improve monetization, strengthen buyer and seller engagement, and introduce greater discipline around discounting and price transparency.
Approach
We deployed over 50 artificial intelligence (AI)/machine learning (ML) models tailored to specific service categories and seller segments, automating pricing decisions while incorporating seller characteristics such as return on investment, retention behavior and business type. The models were designed to dynamically adjust to changing market conditions and were separately assessed in a robust A/B and causal impact testing framework.
This approach enabled the client to shift toward targeted, behavior-driven pricing strategies and reduce reliance on manual discounting. Integrated into the client’s cloud environment, the system featured real-time dashboards and analytics to guide ongoing optimization.
Results
The AI/ML-powered pricing engine delivered a 5%-10% uplift in incremental revenue within two months. The automation eliminated inefficiencies and supported smarter, faster pricing decisions, all while maintaining a strong customer experience. With this scalable solution in place, the client is now positioned to continue evolving its business model, improve platform economics and unlock future growth opportunities.
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