Price Support: How To Drive Price Management Practices In Your Business!
Price support: What’s the best way to drive superior price management practice with minimal cost and disruption to the rest of the business?
There are four price support facts you should know before you make your hiring decision or promising someone a promotion opportunity.
You might be transitioning the business through change; a price improvement program; or a wide scale business transformation.
Time and time again, I have seen leader make team and talent management decision with limited price support, which have impacted the bottom line and culture.
5 tips to help price support
Think of this article as a price support fact-sheet for leaders and managers. When considering a new hire or promotion, refer to your price support fact sheet to ensure you make the best price and team decisions and drive superior price management practices.
PRICE SUPPORT FACT #1: AVOID PLACING THE WRONG PEOPLE IN THE RIGHT FUNCTION
A large number of managers are putting staff forward for pricing roles who often turn out to be completely unsuitable for the role or team. Overconfidence is a problem for managers who need more price support. Our research shows most managers are unable to objectively judge their own pricing skills and capability with limited price support – let alone predict their suitability and fit for pricing roles. Mis-fitting styles to functions based on false perception is a recipe for disaster. Hiring or promoting people based on personal preferences, tenure, or perceived time and resource constraints rarely turns out well.
PRICE SUPPORT FACT #2: AVOID UNPROVEN FRAMEWORKS & COMPETENCY MODELS
The promotion process for price and commercial leadership roles is often set up to fail before it even begins: Our research shows that over 70% of HR managers rely on a generic Lominger (Korn Ferry) framework to understand pricing roles, when, in fact, Lominger provides limited to no price support and insight in the characteristics of commercial price leadership.
Lominger is a well-known brand for HR functions – best suited for more standardised accountancy roles. The Lominger framework struggles to define the pricing competencies, skills and behaviours required to be successful in a price leadership role.
Not using a proven price support framework will create role ambiguity and confusion amongst teams about how they should access and feed into the pricing function.
PRICE SUPPORT #3: AVOID GENERIC TESTS TO DETERMINE FIT
Most business leaders are not armed with any price support data or analytics when they assign people to pricing teams. What’s more, they are using the wrong data to determine candidate fit and suitability for pricing roles without even realising it.
Our research shows that generic aptitude testing provides zero price support to leaders. Aptitude tests like SHL aptitude testing and standard psychometrics are struggling to measure and identify the right people for high performing pricing teams.
Generic tests were never designed to measure pricing skills, competencies and potential in the first place. CVs and Standard assessment tools often delay recruiting processes and overlook high quality candidates more suited to pricing roles.
PRICE SUPPORT #4: AVOID PLACING THE RIGHT PEOPLE IN THE WRONG FUNCTION
The wrong team structure offers good teams limited price support and defeats high performers every time. Our research shows that when a business experiences a series of implementation mistakes or new hires repeatedly fail in their role, it’s actually a sign of limited price support and structural imbalance rather than bad hires.
Legacy team structures are often misaligned to strategy or execution, creating confusion amongst teams and roles. Price decision making bottle necks within power structures, or simply slows implementation all round. Teams have zero price support. Organisations lose hard earned margin.
Insight: Only 1 in 100 managers demonstrate fluidity of thinking, imagination and domain expertise.
These price support facts will not only save you money now and in the long run – they will help you see who stands out from the crowd before your competitors.
Most managers are better at solving basic to intermediate financial reasoning problems with a single answer than real world commercial pricing problems. (However, there are significant gaps in capability across the board, including basic financial reasoning and data interpretation.)
One of the biggest pain points for managers is dealing with people with opposing styles or beliefs to them. Many chose to withdraw and avoid conflict. Diversity and inclusion issues are impacting culture and profitability.
Don’t just rely on CVs and interviews or past success to assign people to pricing teams, use an evidence-driven approach to back up your decisions and feelings about someone.
If you want to know how good someone is at pricing and revenue management, get them to take our pricing and commercial assessment and benchmark their performance against relative industries.
It’s better to know whether someone’s going to be good fit for the role before they are placed in the role. They’ll appreciate getting constructive advice on their skills and development. They’ll also get a good insight into commercial pricing and the challenges and outcomes they’ll be expected to achieve in their new role.
Don’t just see recruitment as a method to fill seats quickly; we find recruitment is a great opportunity to educate and engage future employees on the role and mission of pricing inside your business.
For many firms, talent has been mostly intuitive and biased.
What action will you take to de-bias some of that judgement?
About Taylor Wells Pty Ltd.
Taylor Wells is an Australian talent advisory and recruitment firm whose sole focus and dedication is supporting leaders build high performance pricing teams.
“We’ve worked with some of the biggest brands in Australia, and we partner with subject matter experts to help us integrate pricing teams within businesses efficiently.
We have undertaken over 2000 assessments from pricing professionals in Australia and globally. We’ve studied a range of pricing performance factors to define competencies, characteristics and profiles that work best for each given role.
We continually strive to optimise the pricing teambuilding and team integration process to improve organisational pricing capability. We strongly believe that combining data-driven insights with industry pricing knowledge and specialisation, can help businesses improve their pricing capability in much shorter time frames and with minimal cost and disruption.
Our proprietary teambuilding process drives early team performance, helping new teams forge 1-2% additional margin in their first 6-12 months.”
– Joanna Wells, Director of Taylor Wells
If you would like to learn more about how to improve your pricing capability, download our free Leadership Guide To Highly Effective Managerial Pricing Competency:
▪ Pricing & Commercial Analysts
▪ Pricing / Revenue Managers
▪ Commercial Managers
▪ Head of Pricing / Revenue Management
See our latest blog on retail pricing strategies.