Developing a Recruitment Strategy When Hiring a Commercial Pricing Analyst 👩💼
Commercial pricing insight talent in Australia is in short supply. There just aren’t enough people (especially for mid to senior positions) with expertise in B2B insight and commercial management. Very often, people have ended up with a business card or LinkedIn profile that says “pricing” but without the pre-requisite skills, testing, or certification to implement the right methods and strategies. Businesses need to improve in developing a recruitment strategy when hiring a commercial pricing analyst.
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People “in pricing” are often doing something else like accounting, sales ops, and marketing. That’s until pricing-focused roles, such as a commercial pricing analyst, became more defined and specific. In some cases, people are simply assigned to the task, as opposed to being a good fit for the role.
Dedicated pricing insight into methods, experience, and strategies is scarce.
Being a valuable analyst in commercial pricing in Australia is still rare. Even if you find pricing managers with years of experience, they may have limited knowledge and skills to practice value-based pricing methods and strategies. Very few align their marketing, sales, and pricing insight architecture to customer value drivers.
It’s a mistake to assume that all pricing managers have the same levels of knowledge and skills. Even today, the majority of pricing managers operate within a cost-plus pricing framework. This is often regardless of the commercial requirements or business model constraints at hand. It happens even though a cost-plus mentality is a major contributor to margin erosion.
Developing a recruitment strategy, team composition, and pricing talent evaluation are the three integral elements of building a specialist pricing team. That’s apart from avoiding bad hires in a marketplace with a number of skills and talent gaps. Many businesses, however, have little insight into the capabilities of pricing teams. Only a few measure individuals’ pricing competencies, and then tailor recruitment and training to fill skill gaps.
Why Businesses Need to Improve in Developing a Recruitment Strategy When Hiring Commercial Pricing Analyst?
As the B2B business environment gets more complex, it can be hard to move people between roles. Decisions regarding promotions are too often subjective. Without proper analysis, aligning pricing skills to methods and strategies is simply guesswork.
Pricing management is a relatively misunderstood and under-defined function compared to sales, marketing, and finance functions. Sales and marketing management functions have at least 80+ years of development compared to the relatively new pricing function.
Say, you work in sales or marketing and people generally have a pretty similar reference point and understand what these jobs entail. Let’s say you work in pricing and commercial management and there will be a multitude of interpretations, definitions, and reference points – not to mention quizzical looks.
Pricing and commercial management is not a certified or regulated discipline in the same way as accountancy or actuary is. It does not require postgraduate, professional qualifications, or examinations across all key competencies to be certified as a pricing practitioner.
Yet, a commercial pricing analyst or pricing teams are critical to business growth. They can manage millions of dollars of revenue at any one time. They can be central to leading and engaging teams to make better pricing decisions with the right methods and strategies. Teams rely on them to put commercial insight and pricing best practices back into the sales process to protect earnings.
What Sets a Commercial Pricing Analyst Apart From Other Pricing Experts
A commercial pricing analyst is distinct from other pricing experts due to their deep focus on driving profitability through strategic pricing decisions. While general pricing experts might assess cost structures or set prices based on industry standards, a commercial pricing analyst takes a more comprehensive, data-driven approach. They combine market insights, competitive analysis, and customer data to develop tailored pricing strategies.
One key difference is that a commercial pricing analyst focuses on aligning pricing with business goals. For example, if a company aims to increase market share, the analyst might recommend value-based pricing, which offers customers a perceived higher value for the price. In contrast, a general pricing expert might focus primarily on covering costs or applying a fixed markup.
Additionally, a commercial pricing analyst often works cross-functionally with marketing, sales, and finance teams to ensure pricing strategies align with the overall business strategy. For instance, they might collaborate with the marketing team to assess the effectiveness of pricing in driving demand, while also ensuring that the pricing model supports revenue targets.
Another distinguishing factor is the analytical skill set. A commercial pricing analyst uses advanced tools to evaluate large volumes of data, identify trends, and model various pricing scenarios. They use this data to forecast how changes in pricing will impact sales and profitability. Other pricing experts might not rely on such in-depth data analysis.
In essence, a commercial pricing analyst stands out because of their strategic, data-driven approach, their ability to collaborate across departments, and their focus on maximising long-term profitability. They ensure that pricing decisions are not only competitive but also sustainable for the business.
Developing a Value-Based Recruitment Strategy For a Commercial Pricing Analyst
Over the past 20 years, large companies in B2B across the USA, EU, and ANZ have made a consistent investment in recruitment, talent evaluation, and team development. Large businesses like Caterpillar, DuPont, DOW Chemical, and Coca-Cola have all developed a talent pipeline of pricing and commercial executives.
All of these businesses use talent evaluation and assessments to ensure employees are working in the right functions and roles. They all screen and vet candidate capability and entry to specialist pricing teams.
Each of these businesses has talent management programs for pricing and commercial teams. Caterpillar, for example, has made pricing insight a core strategic capability. Also, there are at least two pricing insight executives on their board of directors, as stated in their Global Deal Business Model program.
Overcoming Commercial Pricing Analyst Mismatches Through Pricing and Sharing Insight
1. Commercial Pricing Analyst Recruitment
Recent research shows that 49% of professional and managerial appointments are unsuccessful. So, finding the right members of a pricing team increases productivity across the organisation. Pricing management hires are critical to business growth, but they also come with a high degree of risk. Similarly, poor appointments can reduce morale and increase attrition across previously high-performing teams.
Great pricing managers drive performance in creating methods and strategies. So, to improve the quality of hiring pricing specialist roles, candidates should showcase their unique value proposition beyond CVs and past experiences. To do that, you need to maximise the recruitment process by engaging candidates with your commercial requirements and business culture. This gives you confidence that you are investing the right amount of resources in the right person and role.
2. Good Team Composition
In fast-changing environments, a number of mismatches are likely to occur in the business. How you make up a team and mobilise talent will help you identify risks and opportunities. Additionally, honest conversations with some team members may be required to find a place where skills are a better fit.
3. Correct Positioning
A lack of buy-in and support can often reduce the perceived value of the pricing team in the business. When this happens, the pricing team becomes an administrative reporting function, not the revenue-generating machine it ought to be.
4. Targeted Pricing Coaching
A bad hire will eventually impact net profitability, disrupt the sales team and affect team morale. When teams lack pricing skills, methods, and strategies, they struggle to gain respect and momentum in the business and with customers.
5. Pricing Governance Methods and Strategies
If people automatically reject price changes or recommendations, it is generally because there is a lack of trust and confidence in current pricing governance. That can come from pricing strategy and/or the sales team’s ability to implement methods and strategies, or roles. It may also be rooted in price management misalignment, politics, silos or turf wars (as described by Patrick Lencioni).
6. Trust and Accountability
A causal driver for compliance or resistance to pricing generally comes down to trust. With limited trust in team strategy, capability, and pricing system, it is difficult to cultivate accountability for pricing decisions and performance.
Interviews and assessments can be the trickiest part when hiring for pricing and sales team roles. This is because most pricing managers are not skilled interviewers and tend to focus on behaviour, work samples, and experiences only. They overlook the opportunities to explore competencies, attributes, core skills, and traits.
So in developing a recruitment strategy for a team with a certified commercial pricing professional analyst, you must ask:
1. What makes a great pricing team?
2. Are you hiring for talent or personality?
3. What are the interview methods used to find the best and most suitable candidates?
Pricing teams are the assets of companies as they drive value and revenue. Often, staff members are evaluated based on profits per employee in pricing and sales team roles. So, it’s important to set analytical expectations for current goals and future performance.
Pricing roles may also cross-function with product engineers and evaluators. This helps them decide on the best pricing methods and strategies as they become aware of product quality. In addition, their role often includes reviewing customer feedback. For example, this can help them be knowledgeable about when to set sales and clearance prices with proper timing.
In research done by Deloitte, companies saw a positive financial impact by investing in employee program interventions. Since pricing is a constantly evolving field, pricing teams who work with sales team roles must be quick to identify revenue opportunities as market trends and customer behaviour change.
The Future of Pricing and the Evolving Role of the Commercial Pricing Analyst
The future of pricing is changing, and the role of the commercial pricing analyst is evolving alongside it. As businesses face increased competition and more complex market dynamics, the demand for skilled pricing professionals grows. A commercial pricing analyst is no longer just setting prices; they are becoming key players in shaping business strategy.
One major change is the rise of data-driven pricing. Today, a commercial pricing analyst uses sophisticated tools to analyse consumer behaviour, market trends, and competitor pricing. With this data, they can develop more precise pricing strategies. For example, by understanding how customers respond to price changes, a commercial pricing analyst can adjust prices dynamically to maximise sales and profits.
In addition, the growing importance of technology means that a commercial pricing analyst must stay up to date with AI and machine learning. These technologies can help predict future pricing trends and automate parts of the pricing process. A commercial pricing analyst may use these tools to test different pricing models, such as dynamic pricing or subscription-based pricing, to find the most effective approach.
Furthermore, as businesses shift towards value-based pricing, the commercial pricing analyst will play a critical role in ensuring that pricing reflects the true value a product or service offers to customers. This requires understanding both customer needs and business objectives, making the role more strategic.
Ultimately, the future of pricing is centred on data, technology, and value-based strategies. The commercial pricing analyst will continue to evolve, using these tools to drive business growth and ensure pricing strategies are both competitive and customer-focused.
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When developing a recruitment and selection process for a commercial pricing strategy analyst, be aware that:
- Pricing roles shouldn’t be mistaken for accountant positions or finance management roles.
- They’re not simply a data management or operational role. It’s more than creating or browsing through numbers-driven spreadsheets.
- They need to be strategic in their problem-solving skills and know the best ways to use pricing software and tools.
- Pricing staff must know how to interpret data and information that will help make informed decisions in price leadership.
- Their role is cross-functioning with the marketing and sales team roles in setting prices for products/services.
Hiring the wrong commercial pricing analyst can cost a company at double the rate of the pricing role’s salary.
That even goes up to 5 times especially if it’s a senior pricing role. Eventually, a bad hiring process will lead organisations to make poor decisions or lack thereof, if left unacknowledged.
Taylor Wells Pricing Insight: What Hiring Managers Ought to Know Before Recruiting a Commercial Pricing Analyst is written by Joanna Wells, Author of TeamBuilder360, and Director of Taylor Wells – Experts at building pricing teams.
Taylor Wells is a specialist advisory firm that has developed a search, evaluation, and recruitment process in the field of pricing, commercial, analytics, methods and strategies. We started our business after identifying weaknesses in the traditional agency recruitment model. Since then, our purpose has been to support management and HR to eliminate the risk of a bad hire. We also provide workshops and diagnostics to ensure pricing and commercial teams are deeply engaged with the sales and marketing teams. Apart from that, we’ve developed our own digital platform to evaluate talent while partnering with subject matter experts to help us operate efficiently.
Joanna Wells
Director of Taylor Wells
BA/ MA Psych. CANTAB, Msc Org. Psych, Dip.Couns Psych
Are you a business in need of help to align your pricing strategy, people and operations to deliver an immediate impact on profit?
If so, please call (+61) 2 9000 1115.
You can also email us at team@taylorwells.com.au if you have any further questions.
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