September 1, 2015
This blog is part of our “How to Be a Better Pricing Strategist” series, in which we asked top thought leaders and industry experts in the pricing field: “What is the best advice you could give a fellow pricing strategist?” Read all the responses here.
Do not let sub-optimal pricing practices perpetuate on the account of cultural barriers! Culture can appear nebulous, unactionable and thus, insurmountable. Fearing culture, rather than managing its relevant components, can stall or even derail pricing initiatives.
Organizational culture has been defined to be a product of various factors, such as technology, management styles and strategy, along with the systems and assumptions used across the organization. Identify tangible components of culture that should evolve and leverage executive support to address them.
Specifically, impact behaviors by challenging assumptions, upgrading systems, fostering cross-functional involvement and leveraging incentives and controls:
- Use outputs and insights from analytics to:
- Challenge historical assumptions
- Strengthen tools and processes that:
- Upgrade/inform (preferably not replace) pricing processes and systems used by sales professionals. For example, modify GUI screens to show more market (and less cost/margin) data and to make it easier to leverage market price guidance.
- Add practical tools for sales professionals. For instance, add tools to better communicate/quantify applicable value prop elements.
- Create formal mechanisms for sales professionals to give input, such as roles on project teams and standing councils or digital channels.
- The “feet on the ground” have relevant insights into how real markets behave and evolve. They can offer meaningful, ongoing input into price management.
- Sales professionals are more likely to buy into a solution if they feel they can influence it, rather than if they are asked to blindly trust it.
- Beyond just enforcing compliance, monitor for feedback about where pricing algorithms may withstand adjustment. Close the loop by acting on this feedback: keep refining the pricing algorithms.
- Leverage incentives to reinforce desired behaviors. Be sure your sales force clearly understands how their use of the price guidance drives their compensation.
To translate analytics into tangible results, pricing professionals may need to step out of their quantitative/analytical comfort zones, drive changes in behaviors and become change agents shaping culture at their organizations!
To read more expert tips and advice, take a look at our Pricing Best Practices SlideBook here.