Pricing excellence is said to have the potential to achieve revenue improvements up to 4%. Yet price and margin management does not get the full attention it deserves, despite recommendations from leading pricing scientists in academia. The lack of adoption may be the result of negative reviews, which often cite that such positive results can only be attained with a lengthy, complex project. In other words, the time to value is simply too long.
It seems the intrepid pricing pioneer should just prepare for a long and bumpy ride to pricing excellence. But this is not necessarily the case.
Leading market researchers advise that the choice of solution sets the pace to gain dynamic price setting, fact-based margin control, and actionable revenue guidance. Below I outline three examples that support this insight and show how my real customers tuned their pricing engine projects to shorten their time to pricing excellence.
Competitive price and margin management concerns all. Yet courage is required to start the change of traditional business processes that dominated for decades. You need the “green light” by all the top executives and regions to remove barriers for the desired outcome. Sponsorship leads to an increased understanding of the project, its goals, its impact, and how each region and team are performing.
Example: Corporate communication prepared for the importance of a pricing initiative. Word – and pictures — spread quickly when senior leadership and local sales executives took time out from a busy headquarter conference to meet and greet the new pricing project. Visible appreciation and expectation injected pricing excellence with just the little extra push to get the project off the ground. Change management processes still retained some complexity in transitioning to new pricing practices. Yet, with the backing of the C-suite, it consumed less energy, which was a not insignificant contribution to reach many milestones ahead of schedule.
A flexible process engine is required. One where you need only fine tune the software for your industry and market conditions and seamlessly balance in the required support of your existing success factors. Then you can activate optimal price setting, update your deal management with modern pricing science, and extend new technologies for mobile deal guidance to the field. A stronger process engine means you can beat the competition to the pole position and enable your project with best practices, such optimized global list and local price approval or preconfigured algorithmic profit and risk analysis.
Example: User stories and out-of-the box functionality offered road maps to best practices in this pre-configured vertical’s software engine. Sales planned for process, algorithm, and segmentation meetings and design and test cycles were timed well ahead to avoid conflict with busy sales periods. As a result, experts were available to test what to keep and what to improve. The manufacturer recommended guard rails and sufficient velocity made for a relatively swift configuration progress. With validation completed to schedule, some test drives had even trained sales and pricing to take the wheel. Quick training and a well-oiled engine kept an aggressive schedule on track for go-live day.
Adoption will be faster when users have the required data updated and at the fingertips. Price list optimization and deal management are faster when integrated with customer relationship and billing management. Don’t let these integration checkpoints slow you down. Your solution will be waved through when it contains standard touch points and sends and receives cockpit data to and from other functions.
Example: The pricing team was racing towards an integration touch point. Sales got ready to test visibility of key customer visit data during deal negotiation. But the CRM was not ready. Project leaders immediately got to work on a rapid integration thanks to well-defined, easy-to-deploy interface technologies. No break was required and the milestone was passed. The adoption planning started as expected.
The Rear Mirror
Beware, you yourself will need to decide how hard you can push the pedal to maintain power on your road to pricing excellence. Add some of the insight from the above steps and milestones should start to fly by. You might just leave the pricing projects on less powerful engines and drivers as dots and dust in your rear mirror.