Overview: Seasonality in Practice
This article from Revology Analytics explains seasonality in the context of modern pricing analytics and revenue growth management. It draws on real engagements with mid-market and enterprise clients to turn seasonality from a buzzword into a measurable commercial capability. Read on for the full perspective, and see our related reading for additional depth.
Table of Contents
Seasonality patterns of your products’ baseline unit sales should influence how you price and promote your products to generate optimal Revenues and Gross Profit.
The example below is fictitious weekly baseline demand for two types of products. “Baseline” means expected demand (or shipments) without price discounts and promotions.
Seasonal, expandable consumption items in B2C: We call them expandable consumption because, typically, the more quantity we have at our disposal, the more we use – or eat/drink them. It’s items like snacks, beverages, frozen desserts…
Needs-based B2B products include auto parts, tires, large-ticket medical devices, or capital equipment sold by a Manufacturer to a Distributor or a Distributor to a business that uses them (a car repair shop, a tire retailer, a medical office…).
Needs-based B2B industries like Car Parts, Tires, or Medical Device Manufacturing can learn quite a bit from the Consumer Products industry in Price Management (CPG is a couple of decades ahead in analytics-driven Revenue Management).
Nevertheless, products from these opposing industries should be priced & promoted very differently, and their baseline demand can often reveal just why.
Our “Expandable Consumption B2C” products on the top of the chart exhibit a relatively typical seasonal pattern. May-September has 20-30% higher weekly demand than other months, with substantial 2-3x increases during key holidays (US example, but similar trends apply to different geographies).
Because of the “expandable” nature (the more you have, the more you consume) of these product categories, you want to maximize your incremental sales opportunities during the critical seasonal periods, especially during key holidays.
Therefore, we must fund the right consumer price promotions through our Distributor and Retail partners in exchange for additional advertising and product display support to maximize sales.
In contrast, the “Needs-Based B2B” products on the bottom also show a typical seasonal pattern.
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They have lower weekly sales variation, more considerable increases in the last couple of weeks of each quarter, and a considerable demand uptick at the end of the year.
The December uptick is often the case with expensive capital equipment. Business customers rush to finance before year-end to take advantage of expense deductions (i.e., a dentist’s office buying a new 3D Dental Imaging equipment).
Establishing reasonable price corridors (staying within specific price ranges) and competitive price indices (pricing within X% of similar competitor products) matter much more than deep price promotions for these products.
Unlike the “Expandable Consumption” products, with Needs-Based B2B products, you don’t want to invest too much in price during heavy seasonal periods. High demand will occur regardless, and the incremental impacts are minimal.
Frequently asked questions about seasonality and promotions
Why should seasonality shape pricing and promotions?
The seasonality of a product’s baseline unit sales, meaning its expected demand without price discounts and promotions, should influence how you price and promote it to generate optimal revenue and gross profit. Baseline demand patterns often reveal why products from different industries need to be priced and promoted very differently.
What are expandable consumption products?
They are seasonal B2C items, such as snacks, beverages, and frozen desserts, that people use more of the more they have on hand. In the example, their weekly demand runs 20% to 30% higher from May to September than in other months, with two- to threefold spikes around key holidays.
How should you promote expandable consumption products?
Maximize incremental sales during the critical seasonal periods, especially around key holidays, because the more of these products consumers have, the more they consume. That means funding the right consumer price promotions through distributor and retail partners in exchange for extra advertising and product display support.
What are needs-based B2B products?
They are products such as auto parts, tires, large-ticket medical devices, or capital equipment, sold by a manufacturer to a distributor or by a distributor to a business that uses them, such as a repair shop, tire retailer, or medical office. Their weekly sales vary less, rise in the last weeks of each quarter, and jump at year-end.
Should B2B companies run price promotions during peak demand?
Usually not. For needs-based B2B products, high seasonal demand arrives regardless of price, so deep promotions add little incremental volume. Reasonable price corridors, which keep prices within set ranges, and competitive price indices, which keep prices within a set percentage of similar competitor products, matter much more.
Why do B2B capital equipment sales rise in December?
Business customers often rush to finance expensive capital equipment before year-end to take advantage of expense deductions, for example a dental office buying new 3D imaging equipment. That creates a considerable demand uptick at the end of the year for these products.
Related Reading
- RA Quick Insights: Break-Even Price Elasticities – a Simple, but Powerful Sanity Check
- Stop asking for an “AI Pricing Tool.”
For broader industry perspective on pricing analytics and revenue growth management, see McKinsey’s Growth, Marketing & Sales insights.
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