Why You Shouldn’t Hire Pricing Managers That Say They’re Price Experts 🍈
Real price experts are very hard to find. They are not ten a penny. They’re actually an extremely rare group within the Australian and global talent market. When I say price expert, I mean world-class price experts with over 10+ years’ dedicated pricing experience and individual pricing capability that surpasses 95% of the global pricing community – including top tier 1 consultancy firms.
In fact, it takes special methods and domain-specific criteria to find and hire a price expert. Interviews, CV and poorly written job ads just don’t cut the mustard. Why? When a pricing manager says they are a price expert during an interview, this doesn’t mean that actually is one. You need to have proof to back up their claims.
A pricing managers view of their own pricing capability is their subjective opinion. They’ve never really compared themselves objectively against real price experts before so how would really they know how good they are?
So, in this article, we’ll take you through the error of trusting pricing managers who say they are a price expert. Life is filled with important decisions. Often we make those decisions based on our gut instinct. Intuition has been with us since we came out of the caves. So you need to have methods, tools that give you the proof you need.
At Taylor Wells Advisory we strongly believe that it is really important to protect yourself against managers they say that know everything you need them to know about pricing when they don’t.
Trusting what people tell probably works out well must of the time, but sometimes it’s not the best way to make a decision. And it’s definitely not the best time when you are hiring a pricing manager. Here’s why…
Don’t trust your gut instinct when you want to hire a real price experts
Trusting your gut is a very real thing, but it can often lead you to make bad choices especially when it comes to hiring a real price expert. Hiring is a complicated and time-consuming process. Whoever you choose to hire will be a part of your pricing team for a long time. Firing them can prove to be difficult. When it comes to making a hiring decision it’s best if you can avoid following your instincts. Stick to the facts and figures and trust the hiring process.
The most serious consequence of simply trusting one’s gut is that it can have a huge effect on diversity and inclusion. Decisions based on a feeling of comfort with a candidate rather than thoughtful evaluation or qualitative reasoning inherently include a confirmation bias. Confirmation bias is when the interviewer judges the pricing manager based on their first impression. This can’t be avoided using objective, proven assessment tools designed for pricing managers.
Look for pricing managers who are emotionally intelligent – not just technical price experts
Companies want their pricing managers to work well with other stakeholders – not just a number cruncher. They do not want pricing managers that create employee conflicts and disruptions in the workplace. For this reason, hiring a price expert for their emotional intelligence is fast becoming a top priority for Australian businesses.
Emotional intelligence is unlike technical pricing skills; they cannot be learned through prior work experience. Emotional intelligence for pricing managers concerns their ability to manage their feelings and reactions during tense price rises; understanding their limitations and strengths as a team lead; bringing people together to achieve more complex pricing outcomes.
Emotional intelligence skills (EQ) is very important for price experts who need to manage personal emotions while analysing and understanding the emotions of other people. EQ, in other words, helps a price expert to link up with others in a highly successful manner both professionally as well as personally across a wide range of roles and contexts.
Assessing price experts using online testing and assessment platforms
Emotional intelligence can be hard to screen for during pricing manager recruitment processes. If you want to learn how to develop emotional intelligence skills you’ll need to find a price expert who is self-aware and not too precious to learn new things or take feedback.
There are plenty of methods and distance-friendly solutions to measure the capability and potential of your pricing manager applicants too. Certain industries, in particular Energy, Fuels, Telcos and Retail, are using online testing and assessments now – they are also proving quite useful during social distancing.
Businesses are now using new tests and methods that go way beyond standard SHL testing, to understand the impact a pricing manager will have on the business if they were hired and the ROI they will deliver the business when they start work.
Understanding someone’s individual price reasoning skills and emotional intelligence skills are the main things computers can’t do very well. These new tests and methods are must-haves for businesses like you in the next 3-5 years. Especially for business that wants to improve their B2B and/or retail pricing decisions.
You can’t always trust your gut when it comes to hiring price experts. You need to look at things objectively. To do this, you can:
- Have multiple team members agree on the hiring decision
- Use data, facts, figures, and lists to make decisions
- Assess the candidate’s ability to do the job
- Look at previous work samples
- Trust the tried and true hiring process that has worked for years
Pricing organisations can transition to a more rigorous hiring process for their pricing team by implementing the following four measures:
- Everyone’s in HR: The human resources department is usually the first place to evaluate a candidate, but it’s the hiring manager who typically leads the recruitment process by selecting colleagues to conduct interviews. Therefore, company leaders should foster an environment where all stakeholders in the organisation are studying how to better assess pricing talent.
- Train like an athlete: Companies need to develop a regimented system by prioritising how to interview screen pricing professionals using better and more specific guidance and evaluations, highlighting what works and what doesn’t work during the entire hiring process.
- Don’t improvise: It’s common for employees to interview a candidate in an unscheduled, impromptu meeting. Without preparation, such a meeting may end up being a waste of time for both individuals. Instead, make a prepared interview process in advance. To help evaluate cultural fit, use behavioural interview questions, and evaluate skills through a strategically designed assessment structure.
- Assess your shots-on-goal percentage: Companies should keep detailed data and evaluate the success rate of HR and hiring manager, and not just over the short term. Who did HR recommend, and what was the success rate of those individuals? Where are they three years down the line? Included here is the line manager – who generally is one of the main interviewers. What’s the line managers scorecard like for hiring pricing people – do they need better training in pricing or people or should they be taken out of the hiring process altogether.
- Gut hires lead to about a 50% hiring failure rate. That’s pretty poor; and it means that trusting your gut will result in more work for you in the future. Plus, it will cost your company lots of money. No one wants that.
- Changes in the workplace are inevitable and necessary for growth. But feared by employees for a range of reasons.
- Humans find comfort in the safety and predictability of everyday routine. It’s normal to feel unsettled in the face of such changes, however, resilient people are more likely to adapt, think positively and overcome challenges.
- If your inner voice is telling you that you “just know” this is the person for the job, you need to take a big step back and take a look at the bigger picture. There are so many variables in the hiring process to consider beyond just your gut instinct.
- The combination of testing, behavioural interviews and subject matter evaluation provides a strong prediction of candidates’ on-the-job performance, without the risks associated with face-to-face interviews and assessment centres.
You can build up your business by hiring the right pricing team and increase your profit margins. Download this whitepaper to learn more.
Contact us for a free consultation.