In this Fireside Chat from Vendavo’s Growth + Profitability Summit 2023 in Stockholm, Chris Kennedy-Sloane, Business Consultant at Vendavo, talks with Stephan Fessner, Head of Commercial Management and Processes at Dynapac, about how to communicate pricing value within an organization, why getting stakeholder buy-in matters during pricing transformations, and current pricing trends and challenges.
Chris Kennedy-Sloane: Hi there, I’m Chris Kennedy-Sloane, and I’m here with Stephan Fessner from Dynapac at Vendavo’s GPS Summit in beautiful Stockholm. So, Steven, you were a panelist on our “Show Me the Money” panel. What advice would you have for a pricer starting out trying to communicate value in their organization?
Stephan Fessner: To talk about value is always important in terms of selling your pricing approach and strategy to stakeholders internally, and also externally when it comes to global rollout of these solutions. So, at the end of the day, I really recommend to calculate your money backs properly and to show them to the internal stakeholders on the management level to make sure that these guys are opening the budget for you, and also setting resources for your activities, and also always having good wind from the right side, so coming from the back ideally. And secondly, you need also very good value and also advantage presentations for your stakeholders outside in the global markets to make sure that these guys will accept your solutions, and that they will work with your solutions, and that they will also defend the prices you created, uh, outside towards the customers.
Kennedy-Sloane: Sales can be your biggest advocate or your largest problem, depending on how well you get them on board, right?
Fessner: Yeah, absolutely. That’s one of the main objectives, to convince the right people with the right strategies.
Kennedy-Sloane: So, Stephan, what would you say are Dynapac’s largest pricing challenges at the moment?
Fessner: I think at the moment we have a good control about our data at all. That is something we managed. The main challenge today is to bring the process closer to the customer, closer to the market.
Fessner: And, I think after first approach, we had a good success with our first rollouts for pricing concepts in the different product groups. But now it’s time to focus more on value-based pricing strategies, more on a better segmentation, more on a deeper development of good price rules, and then make good decisions about which price rules to apply for which kind of segment.
Kennedy-Sloane: So, would you say you’ve done the easy part and now you’ve got the hard part? Or do you think it’s all hard?
Fessner: I would not say it’s hard. It’s a lot of fun. You know, you need to be a pricing enthusiast when you deal with such a high amount of data and with people which are under pressure. People in sales, they are always under pressure. They are always expecting better prices. From their perspective, it’s better to have lower prices because they have a better probability of selling items for sure. But we have also margin targets, we want to grow, we want to pay all our bills, and for that reason we need to find a very balanced strategy.
Kennedy-Sloane: You do have a lot of stakeholders you have to satisfy with pricing, that’s for sure. So, what trends do you see impacting the wider market that are affecting how you’re using your pricing strategy?
Fessner: I see there are some different trends in the behavior of our customers, how they approach us, and that, in many cases, they are used to – from their private lives – to Amazon buying experience and all these things. So, they have very quick access to data and information, and also they have the expectation of getting, for example, a quotation very fast. It was exactly the main reason why we invested in CPQ as well, because we need to bring our pricing strategies and ideas very quickly to the market because we think it’s not always the big fish that eats the small fish. Sometimes also the fast fish is able to get to the target earlier than the other.
Kennedy-Sloane: Absolutely agree. And I think we’ve all been spoiled, right, by the eCommerce availability for B2C. We’re seeing that more and more in B2B. Thank you, Stephan. That’s really insightful. And thank you for joining us for this Fireside Chat at Vendavo GPS.