Pricing

We All Need Good Guidance

By James Marland
July 18, 2011

Everyone needs good guidance. Imagine yourself standing on the first tee, on an unfamiliar course. You ask your golfing buddy, “Where should I hit it?”.

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Consider the following replies:

 “Aim at 37°21’20’’N, 121°57‘58’’W”: As a golfer, you don’t want the guidelines to be too complex and delivered in an unfamiliar way.

“Jeff always aims here”: It’s easy to rely on tribal knowledge, even though the situation may be very different.

“Aiming here is good if the wind speed is 20mph from the West. Although I don’t know what today’s wind speed is, it averages 20mph.” Don’t use guidance that relies on unobtainable, erratic, or erroneous data.

When presented with this trio of unhelpful guidelines the response is typically: “I’m a good golfer. I’ll go with my gut.”

But often, these are the types of price guidance we give to our sales teams. Confusing, unfamiliar language; tribal knowledge; or based on poor or unobtainable data. Pricers should give price guidelines that are simple, clear, empirical, and reliable.

Going with the gut is a viable strategy for veterans with years of experience, but with rookies, a few lessons with the club professional is a sound strategy.

 

– James Marland

 

    James Marland

    James Marland is the Director of Business Consulting at Vendavo based in London. In this role he helps diagnose Pricing Opportunities and develops business cases for pricing projects with ROI models. James has been in the pricing software space for many years, both on the customer and supply chain side: so he has a view from “each side of the table”. Prior to his pricing career he was VP of Solutions at Ariba and has also spent 5 years at SAP America. He has a Bachelor of Science degree in Mathematics from the University of Southampton.