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How Organizations Price: 2023 Pricing Excellence Report Reveals New Shifts

Mitch Lee< Mitch Lee November 29, 2022

Nearly every organization wants to sell more – that’s the leading goal behind business growth. Another essential ingredient in the recipe to success is selling profitably yet, too often, improving profitability falls short on the priority list. Or worse, it’s left out altogether.  

The primary driver behind profitable selling is the right price. This is how organizations not only meet but exceed margin and revenue goals. Over the years, arriving at the ‘right price’ and maintaining it across the organization has been a task owned by a host of different people and teams like marketing, sales, and finance. The challenge is these people are already stretched thin and unable to appropriately focus on pricing strategies. 

Within manufacturing however, that’s starting to change. According to the new Pricing Excellence Report and Outlook 2023, an annual joint research project from Copperberg and Vendavo, the importance of pricing management has grown considerably. The results are compelling, and they beg the question – how does your organization stack up? 

How Organizations Handle Pricing

Who owns Pricing Excellence Report and Outlook 2023

Because pricing is a multidisciplinary function that relies on cross-departmental collaboration for success, the best practice is for pricing execution to be overseen by a central team that has the capacity to not only drive decisions and action but also respond with agility to constantly shifting market dynamics. However, achieving that best practice is a work in progress for most.

Survey respondents shared that, in 2022, pricing is owned most often by either sales (24%), marketing (21%), or a business line (18%). Compared to last year, the number of marketing teams responsible for pricing decreased by 5%.  

More and more, the finance team is taking the lead in pricing decisions. This is good news as finance teams can then be integral to preventing revenue loss in the volatile market conditions we are experiencing today. 

But while finance teams can help their organizations navigate inflation, the reality is they lack insights regarding the value of a service or product and how customers perceive it. In today’s inflationary environment, calculating costs and adding a margin is not enough. To turn potential losses into profit, finance teams should work closely with sales and marketing departments that not only understand the customer but are also responsible for communicating value to them.  

Such a collaborative cross-departmental effort managed by a pricing specialist, or a pricing team, ensures that there will be no knowledge gaps or ad-hoc decisions that can jeopardize the communication and selling of value. Appointing this person (or team) to own pricing while fostering cross-departmental collaboration will be key to succeeding in 2023 and beyond.  

Sought-After Skills in 2023

Top 3 skills when recruiting pricing professions - pricing excellence report and outlook 2023

Pricing as a stand-alone profession has grown in recent years. Just 8% of survey respondents reported not having at least one pricing pro on staff in 2022. Additionally, 34% said their organization will look to recruit more professional pricers, up from just 22% last year. Another 31% said they weren’t sure.

Whether your career is exclusive to professional pricing or you come from a marketing, sales, or finance background, the skills global organizations look for continue to be those that complement a data-driven approach to making pricing decisions. When it comes to in-demand skill sets, analytics is the name of the game, again.  

Like last year, survey respondents report analytics as the top sought-after skill they will seek in 2023 (66%). Price management (39%) and understanding the concept of value (37%) rank a distant second and third.  

Organizations are looking for experts who are aware of their business model, the customer’s willingness to pay, and the overall commercial environment. They are looking for talent that can help them achieve excellence through cross-functional collaboration and data-driven decisions. 

As my Vendavo colleague and business consultant, Chris Kennedy-Sloane likes to say, “Pricing needs to be a thought leader in their business.” 

Pricing Excellence Report and Outlook 2023 Inside

How are these pricing teams (dedicated to the function or not) arriving at the right price? The Pricing Excellence Report and Outlook 2023 also digs into which pricing models are seeing the highest adoption today and the current state of maturity. Download the full Pricing Excellence report here