Price Pressure: Is Stress A Problem In The Pricing Community?
Price Pressure: Is stress a problem in the pricing community?
Whether it’s dealing with price rise mis-management, waiting to present alternative pricing options to cost plus minded stakeholders, or giving difficult performance feedback to your team, most pricing executives experience acute moments of stress at some time or other and not just from customer price pressure.
You know the feeling, your heart starts to pound, your mouth dries up, you breathe more quickly, your muscles tense, you have butterflies in the stomach and you may start to shake. This is a growing issue across the developed world and not just in pricing jobs – see Beyond Blue.
These physical responses to stress can be quite useful if you are about to run away from a giant crocodile or procurement officer, however, for many “stressful” pricing situations, these bodily reactions are not only unhelpful, they can be quite destructive and block better ways of handling difficult pricing and team situations– especially as many stressful pricing triggers have no immediate physical release or resolution.
Stress in the pricing community is common. If you feel stressed, then you are probably doing your job correctly. By this I mean, you’re probably out there with customers to understand and define what value means to them. You are likely doing a lot of educating and strategic influencing and championing better pricing and commercial strategy, as well as building better analytics and data systems. But what does stressed-out look like and why is it such a problem in the pricing community?
Price pressure: Pricing executives have two responses to stress
The definition of stress (price pressure) describes any demand that is placed on the body, whether it is mental or physical. We tend to think of stress as being a negative experience, however, there is a big difference to being stressed and stressed out.
According to the latest stress research there is a clear distinction between good stress (austress) and bad stress (destress). Research suggests, for example, that any challenge or change is a form of stress and that often this can be something that is fun and enjoyable, something that makes us feel alert, excited and driven.
Naturally, there are big individual differences in how we react to different business situations and whether they lead to austress or are just simply distressing. For one pricing manager, being tasked with delivering more effective analytics to stakeholders on a timely basis might be a dream come true – a chance to demonstrate their analytical thinking and knowledge to achieve complex business outcomes – whereas another might feel physically sick at the thought of explaining their pricing logic and price models in front of a crowd of sceptical stakeholders and sales teams.
Pricing managers and their teams tend to differ hugely in the amount of challenge or change that they can comfortably deal with. Ask yourself: Are you someone who seeks out change by championing a better way of pricing (and to the toughest of audiences and customers), or do you prefer to sit behind your desk and hypothesise pricing options within the confines of well-known, traditional financial / accountancy based (and often broken) paradigms? Do you find that a bit of nervousness can help you in a big meeting or negotiation, or do you go to pieces?
We have conducted a series of empirical studies on pricing teams and culture and conclude that each pricing manager and analyst has their own optimum level of performance and pricing pressure; anything below that means they are not driven enough, while anything too far above means they simply get too anxious to the point of not being capable of performing.
This stress effect is quite common in pricing teams and is known as the Yerkes-Dodson Law. This law is a good way to explain why some pricing executives thrive during pricing transformations while others cannot bear the anxiety of changing operating models, systems, processes or looming deadlines.
Stress, whether it is good or bad, is one of the most real examples of the connection between individual pricing potential and actual pricing performance. Just thinking about an upcoming contract negotiation or a pricing committee meeting, for example is enough to cause many pricing executives that familiar “butterflies in the stomach” feeling.
Stress triggers come in all shapes and sizes for the pricing executives: some pricing situations require an immediate reaction or decision (people management and/or tactical pricing decisions driven by increasing competitive pressure); others present more ongoing challenges and a more prolonged response (such as leading people effectively through a wider business transformation driven by technological advancements).
Luckily, most pricing leaders and teams can identify different types of stress triggers affecting their thinking and performance. Unfortunately, the majority of pricing executives are still struggling with how to manage these stressful triggers. As a result, there are a lot of stressed-out pricing executives out there suffering sleepless nights, poor health, disengagement, poor focus, mistakes and underperformance – and all because of stress and not knowing how to deal with it properly.
Top tips for handling stressful pricing roles and situations – price pressure
The all-important thing is for us not to stay in that “read-alert” or hyper-stressed -out state for too long. Pricing managers would benefit from finding ways to return to their natural level. We cannot always remove a stress trigger, but there are many active steps we can take to reduce the physical and mental effects: For some, it may be as simple as closing our eyes and taking deep breathes in and out. For others, it may mean taking a gentle walk through the park or even yoga and meditation. All of these things have been shown to significantly reduce the physical response of stress at work.
See our blog on easy tips to beat stress in revenue management teams.
An alternative approach to stress management is seeking support on changing your view of work, pricing and even how to achieve results. We treat something as a stressful trigger only if we perceive it to be one in the first place. Re-framing a situation can be very helpful to your pricing career, health and life in general.
A final simple and practical solution is to respond to the fight-or-flight pang of electric stress we can feel in the moment by regular exercise: Go and expend all the additional energy and resources that your body has generously given you and fight stress swimming, surfing or even walking on Australia’s radiant beaches and shorelines. Your job is to deal with price pressure – but you need to leave the office stress behind you in the evening.
Sometimes – it can also be a good idea to relax a bit at work and keep your life ticking over also – see an article here on the benefits or retail therapy at work!