Pricing

Pee Wee Soccer and Driving Pricing Changes

By Tom Cowen
August 8, 2011

As Business Lead of Vendavo’s Profit Analyzer COE and Coach of a U10 Boys Soccer team, I’ve come to realize I spend my time during the week and on weekends pretty similarly. Whether you are a 9 year old playing soccer or a seasoned sales veteran, the challenges are much the same. So for our VP’s of Sales and youth soccer coaches, help your players solve these basic challenges:

kicking-and-screaming-17-resized-600Resist the Magnet – For millions, the image of every youth soccer player on the field standing within a 3 foot radius of the ball is indelibly etched in their minds. As coaches, we laugh at the magical magnetic soccer ball that pulls every player on the field to it. Sales reps fight another overwhelming force – the commission. While most youth soccer players are convinced the best way to success is to get the ball, many reps feel the fastest way to big commissions is to sacrifice price for quarter-end volume. Get the ball and get the deal, now!!!

Pulling away from the soccer ball “magnet” involves baby steps and proof of success. Spreading the field and producing goals parallels the salesperson who finally gains the courage to ask for a 10% price increase and actually keeps the volume. The “aha” moments come quickly when the customer does not walk away.

In one recent example, a Process Manufacturing company LOB lagged seriously on increasing price following large raw material cost increases. This LOB finally gained the courage to move away from the magnet and increase price. To date they have already increased margins 3.5% in two months.

 Assemble Your Team and Defend Your Goal – It is vitally important for my players to learn their positions and protect the goal. Salespeople must also understand their positions to defend price. As the captain of both sales and pricing efforts it is vital to assemble the team that best defends the pricing “goal”.

One Pricing Director I know writes newsletters on Raw Materials and explains the impact of rising raws to top customers. Another Pricing Director leveraged Large Account Playbooks to help his reps better understand Large Account dynamics.

 Learn the Plays – In practice we work on passing in triangles and running corner kick plays. Good reps refine their abilities to understand body language and practice their pricing plays.

In my early years as a Global Account Manager, I quickly learned my account’s play. They set up multiple layers and negotiated “a pound of flesh” at every single layer. We quickly adjusted our plays to scale back our initial offer and withhold “final” concessions until the very end.

 Watch the Greats – To help my soccer players appreciate the game, I encourage them to watch the greats, from Argentina’s Lionel Messi to the Women’s World Cup. The greats provide us with inspiration, ideas, skills and motivation. In pricing, Warren Buffett looks to the greats, he was quoted in a Bloomberg Interview:

 “The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”*

In your own organization, award the reps with the highest Price Realization or Price Increase Effectiveness and applaud them as greats. With Pricing tools now available on the web and iPads, sales teams have more power than ever before to drive change.

I wish you all good selling and good playing.

– Tom Cowen

*Frye, Andrew, and Dakin Campbell. “Buffett Says Pricing Power More Important Than Good Management – Bloomberg.” Bloomberg – Business & Financial News, Breaking News Headlines. Web. 27 July 2011 

  • Low Margin by Transaction , Pricing Excellence , Vendavo Profit Advisor

    Tom Cowen

    Tom Cowen is an industry veteran with 20 years of experience in Sales, Financial and Price Management at High Tech and Media Companies. Tom spent the first five years of his career at Hearst Magazines where he was Business Planning Manager for the Corporate Marketing and Sales team. He served the previous 13 years of his career as a Global and Enterprise Sales Manager at market-leading technology companies: Oracle, EMC and BEA Systems. As a Global Sales Executive, Tom has managed the Sales and Negotiation Process effectively with top tier customers:  General Electric, Goldman Sachs, Merck and McGraw-Hill.