August 5, 2013
One of my passions is supporting my local farmers. I am a farm girl from Nebraska, and some of my fondest memories are working alongside my grandparents on their wheat farm. I can drive a tractor, a combine, and a big truck! Because of these experiences, I am well connected to what is happening in our agricultural economy. While I like progress as much as anyone, I do have concerns about big agribusiness, the alarming trend of children choosing not to continue the legacy on multigenerational farms, the decreasing supply of local foods at supermarkets, and the high costs for a local farmer to get his food to each of us. So, I shop at farmer’s markets and at local farms, where I can spend hours picking my own food. This past weekend, as I reflected on my Saturday morning routine where I head to the University market, I noticed I have a set path through it. I shop at eight vendors, and I always shop at those eight. I do that because those vendors provide the highest quality products based on years of buying from them, and I am willing to pay for that quality.
You might be thinking that I am going to launch into a discussion of willingness to pay in B2B pricing. That would be a good place to go, but this week, I am thinking more about how my favorite market vendors relate to long-term customers of Vendavo. I am reflective on this because we have just closed our first half of 2013, just as your companies have done. For Vendavo, it is an especially important milestone, because this 2013 summer represents ten years of doing business with our longest-held customers. I am so very happy about this because we had something magical happen in our business again in the first half. Our existing customers continue to invest in Vendavo, consistently year after year. Every year, I ask the question of why they do so. Why are we a preferred vendor? Why do our customers continue to shop with us? I believe these are important questions to ask, to discuss within your company, to form action plans around your findings, and then to execute those plans to constantly improve how you are selling to and serving those customers. It is a critical-success-factor-process for any business.
Why do Vendavo’s customers reinvest year after year? It’s because together, we become better pricers who help each other deliver on the promise of excellent B2B pricing. As I consider the results of this work, I would summarize what these ten-year customers have done as follows, and I would offer that this list could easily become a scorecard for your own pricing competency.
- Established and continually grow a pricing organization with a senior Pricing Leader (Global Director, VP, or above)
- Ensured and maintained senior executive sponsorship of pricing initiatives
- Fostered a culture of price performance improvement within the company
- Documented a price competency roadmap
- Evolved their enterprise pricing solution annually (by rolling it out to other divisions and geographies or adding new functions or rethinking pricing strategy, as a few examples)
- Invested in end-user effectiveness programs
- Measured and ensured end-user adoption
- Implemented metrics to measure the value generated from pricing initiatives
- Routinely communicated the value and lessons learned via regular reporting
How are you doing on this scorecard? If you are not fully executing on these areas, how could you improve? How could you engage with your pricing solution vendor to do more, to do better? Are your enterprise vendors favored? Are they strategic for you? I ask these questions because your vendor has as much to do with becoming excellent in pricing as you do – challenge them to do more, to continually improve their product and services, and to become a favored vendor of yours.