September 23, 2013
Do you ever wonder why you are not getting more out of your pricing analytics? Are you finding the adoption of your new (or even old) analytics solution challenging? Are you having problems training the organization on how to use the solution? Do you often hear the complaint that there is so much data to analyze it is difficult to know where to start? You are not alone. Not that that helps much, when you are the one required to explain why it is not working, and why you are not getting the return out of your investment. It’s not a great position to be in!
There may be a variety of reasons for your problems; choice of solution, organizational readiness, team capabilities, but the most common one that I have seen is pricing teams treating Analytics as a tool and not a process. If you are doing this, you need to fix your Analytics karma. Change your whole attitude towards Analytics and if you have the advantage of reading this before embarking on the Pricing Analytics journey, then from Day 1 in solution selection, to design, training and roll-out, to support and user adoption, you need to be thinking Process and not IT Tool.
Assuming you have good quality data, which of course is not a foregone conclusion, then your Pricing Analytics project needs to be focused on establishing a repeatable process. Most solutions today offer the charting tools and capabilities that you will need, but they may not offer an embedded process. In this case, you need to take responsibility to establish the process. Follow some simple guidelines to get there:
• Understand that the process must be repeatable
• The process needs to be documented, preferably captured directly in the pricing solution
• The process will become the basis for User Training
Then, think about what you are going to monitor and measure:
• What are the key measures and metrics you want to track?
1. If you are investing in software, make sure these at least cover those metrics agreed in your business case.
• What are the key areas of margin leakage in your Waterfall that you want to monitor?
1. If you don’t have a Price Waterfall defined yet – don’t worry (too much).
2. Fix this first: read The Power of Pricing by Michael Marn and you won’t need to spend a million to have someone develop it for you.
• Define the 4-5 steps in your Analytics solution to:
1. Quickly find (these) areas of poor performance,
2. Identify trends in the data, and
3. Use peer group comparison to isolate the root cause (Waterfall elements) driving this poor performance.
These 4 to 5 steps are like a recipe in a cook book (you can repeat it, practice it, and get better at it). In the world of sport, you would call this a Playbook (trained, practiced and repeated until the team can run the play in their sleep). Eventually, the recipe or Playbook is no longer required. The cook knows the recipe, the team knows the plays, and they start to improvise to get better results. The same will be for your Analytics Users; once they know the Playbooks by heart, they will feel comfortable with the solution, know they can easily go off-script and get back without your fears of getting lost in the Analytics data Jungle. Now, that would be cool!
For more information on how Vendavo uses Playbooks to improve Analytical results read here.