Blog

Time (and Price) are Easy, Right?

By Mitchell Lee
May 12, 2016

So, “back in the day” when someone asked, “What’s the price?” it was probably pretty easy. Most likely, the person asking and the person answering were standing face to face with the “thing” in hand — context all very apparent. Situational awareness not extending beyond right here, right now. There was no real need to think about how the current situation might relate to other situations.

But think about it: “What’s the price?” is becoming just as contextual as answering the question, “What’s the time?” 

Not too long ago, time was always relative to right here, right now. You got your answer by pointing up at the clock tower in the town square, or setting your wind-up pocket watch to match your colleague’s timepiece. You didn’t really worry what time it was on the other side of the country or continent, much less the other side of the world. Proximity was a much bigger factor in determining your situational awareness. 

Things have changed, though. The world is shrinking. If you’re getting ready to Skype or video conference, you are likely to be a lot more sensitive when specifying a meeting time by taking the other persons location into account. Sure, this includes time zones, but it goes beyond the simple math to come up with the difference in hours. You’re also going to consider whether the person is working at that time, or even awake.

READ MORE: Using Pricing Software as an Enabler for Change

In the same way, to provide a price, you are going to be sensitive to specifying a price that is relevant to the customer’s “location” (their business context) to get to a semblance of “normal.”  Again, just getting the math right (exchange rates, local costs, etc.) is not sufficient: the other person might not be “awake” at that price. You want to meet at a good price for both of you.

It’s also important to consider the what and why behind the question. For time, a person might be asking because they are wondering if it is getting close to time for their tea, or time for their train.  The consequences of being late by one minute are very different in these cases. A lukewarm cup versus a fouled itinerary.

For price questions, understanding your customer’s situation is just as key. The answer to the question might be as simple as the “list” price, which isn’t necessarily a huge issue since that is usually just a starting point for discussion. On the other hand, the answer might be more complex and require negotiations, in which case a wrong price can have significant consequences for your business and the customer’s. Consider: A lukewarm discussion that is probably easy to heat up versus missing the first leg of a long journey. 

So, how do you keep track of context on a situation-by-situation basis? Just a few decades ago, if you didn’t have the right time, you might glance up at a clock tower, or you might call the local “time and temperature” phone number to set your watches accordingly. If you were speaking with someone in a different time zone, you might have to call the US Naval Observatory for the time signal, and set by that.  

READ MORE: Wine Country Proves the Value of Customer Segmentation

Now, however, we rely on systems to keep us aligned, and to keep it relevant to our situation. Our phones not only have the correct number of seconds past the hour by communicating with a master clock and updating accordingly, they also know where we are, and effortlessly update our time zone when we travel.

Pricing? Back in the day, you might have printed an actual “price list” for a physical catalog, say, once a year. If you had to negotiate something off that number, you would call back to the “home office” to get special approval.

And pricing now? Just as in the alignment of time (with the why and how embedded), pricing is now effortless because of systems. Your pricing alignment — getting the right price in front of the right customer at the right time — should be supported by systems designed to make that part of selling and doing business effortless.  Well, almost effortless! 

But once a strategy is outlined and tactics are designed into your pricing system for execution, the sales organization will have the appropriate price for the circumstances (time and location).  All the thought, smarts,  and planning are easily accessible for reference at “the moment of truth” without having to go to the town square to look up at the clock.

  • awareness , B2B , clock , margin , price , time

    Mitchell Lee

    Mitch is a Business Consultant at Vendavo with 25+ years of experience in the technical, operational, marketing, and commercial arenas of the chemical industry. Prior to Vendavo, Mitch was with BASF and Orica in product marketing and business management, driving operational optimization, pricing excellence, and margin improvement, as well as personal engagement in high value sales negotiations. Mitch also has deep experience with raw materials supplier portfolio management having negotiated large scale and long-term agreements with leading suppliers.