September 16, 2015
This blog is part of our “How to Be a Better Pricing Strategist” series, in which we asked top thought leaders and industry experts in the pricing field: “What is the best advice you could give a fellow pricing strategist?” Read all the responses here.
Resist the temptation to boil the ocean. In fact, ignore pretty much all the big, grand, transformative success stories that you may have heard at pricing conferences. Sure, those things are nice. You are probably going to have an urge to implement or strengthen value-based pricing. We pricing people are easily convinced by the profit potential of micro- segmentation, dynamic price targets, and all that stuff. But, there is a big difference between those things and the reality of getting incremental gains in a somewhat normal situation.
If your organization is pretty normal for that of a pricing leader, you do not have a massive staff, and you do not have a massive budget. The key is to look at the total roster of things to be improved, then rack and stack them by dollar impact on one axis and difficulty or time-to-value on the other. The optimal set of activities is one that forms a natural “trail of breadcrumbs” to the largest prize. Knock out some easy-to-do things and the largest quick wins. The set of activities that you determine as your road map should have some kind of logical flow or theme. It will present a coherent set of actions and people will see the progression towards pricing excellence.
Additionally, though I would advocate for piloting of new initiatives, it does add some risk — perhaps not the one you might expect. It provides the people involved in Phase 2 to claim “we’re different from the pilot group.” Tiresome, and always wrong. You simply have to pre-emptively avoid it by prior and repeated senior leadership messaging of the whole plan. Sure, it delays some benefit, but take the pragmatic approach. A slow, measured win is far better than a quick, big disaster.
To read more expert tips and advice, take a look at our Pricing Best Practices SlideBook here.