How to Connect Pricing with the C-Suite
The 2022 Growth + Profitability Summit in Stockholm was one for the books. Summit attendees experienced two packed days of keynotes, sessions, demos, UX labs, and product discussions. Of course, they also had ample opportunities to network with their pricing and commercial excellence peers. One of the highlights of the event was a panel moderated by Vendavo’s Chief Product Officer, Alex Hoff about connecting pricing with the C-Suite.
Dr. Larisa Kryachkova, Chief Human Rights Officer at slavefreetrade, and Corey Schroeder, Senior Director, Product Management at Vendavo, joined the panel to share insights on change management, long-term profitability, visualizing data, and the future of pricing.
Dr. Larisa Kryachkova has held a variety of pricing-related titles including: Controller, CFO, Pricing Director, General Manager, and more.
Before Corey Schroeder joined Vendavo as a Sr. Director of Product Management, he worked at Molex, a manufacturer of electronic, electrical, and fiber optic connectivity systems, for 13 years in various pricing, strategy, and commercial excellence roles. During the panel he reflected on his time at Molex.
5 Keys to Connecting Pricing with the C-Suite
Here are five tips Dr. Larisa Kryachkova and Corey Schroeder shared during the panel.
1. Invest in change management training
Dr. Larisa Kryachkova put CFOs through a specific change management training based on cultural practices in Indonesia, where they do not use yes or no in their language. Instead they use the word, belum, which means not yet. In other words, it’s a progressive journey.
2. Focus on long-term profitability of the organization
When Molex went from being a public company to a private company, they were able to focus more on long-term profitability. The culture was also a lot more risk tolerant. The team was encouraged to take more risks. From a pricing perspective, they were able to go from focusing on winning to focusing on optimizing profitability. They even took their sales team through a training to help them understand how winning less deals more profitably (vs more deals less profitably) was beneficial to their organization. Molex began taking on higher risk, higher profitability opportunities and drove real bottom line business improvements as a result.
3. Get buy-in on your pricing model by showcasing the potential ROI
In their journey of transformation, Molex shifted from cost-plus to value-based pricing. When you’re able to achieve a 1% move in pricing vs. 1% change in cost, or have other impacts on P&L, you’ll make a ton of impact to the business. When you’re able to help your organization understand and realize the potential ROI of those shifts, it’s a lot easier to manage the change.
4. Help your executives visualize the data
Paint a picture for your executives to help them understand changes to profitability overtime. Simplify the data and boil it down to consistent visuals. Don’t get too far in the weeds, rather simplify so you can spend more time talking about the why and less on the numbers. Even better, showcase the pricing team’s direct impact on profitability whenever possible.
5. Identify a single executive champion
It may seem too daunting to get buy-in from your entire C-suite right away, so it’s always a good idea to start with one executive that believes in you, in your team, and in the value of pricing. Maybe it’s your CEO, maybe your CFO is enlightened, maybe you can find your executive partner in sales or marketing. As Corey Schroeder eloquently put it, “Who can I influence the most and who can influence the organization the most?”
Creating Alignment and Managing Change with Other Departments
Panelists also shared insights on building the business case, creating alignment, and change management tips for collaborating with other departments like:
- Move sales from volume junkies to value creators
- Find one or two people you can partner with in the commercial organization
- Use pilots or beta test groups to get started
- Leverage concepts from Charles Green’s Trust Equation, like credibility, reliability, intimacy, and self-orientation, to build trust with your teammates
- Build centers of excellence with clear visibility to data, processes, and results
- Have clear pricing ownership and detailed roles and responsibilities
- Consider bringing in an external change management agency or partner
The Future of Pricing Roles and Pricing Teams
Finally, panelists were asked about what they thought pricing teams needed to focus on in the future. Some of their predictions included:
- Automate mundane tasks to free up your employees
- Ensure you have visibility to the right data
- Continue to prove the value of pricing in your organization
- Continue to showcase how pricing is driving value on your bottom line
- Implement a process mining digitalization strategy to identify opportunities and improvements
- Stay curious and never stop learning
It was a privilege to listen as these panelists took the stage at Vendavo’s Growth and Profitability Summit in Stockholm. Register for the North America version of Growth + Profitability here and join us in Denver, CO from September 12-13, 2022!