Pricing Manager Job Description: Why A Job In Pricing Is Often Set Up To Fail
What is the pricing manager job description? Why a job in pricing oftentimes doesn’t succeed?
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Pricing Manager Job Description: Why A Job In Pricing Is Often Set Up To Fail
Pricing professionals often tell me that gaining trust, buy-in and alignment around pricing is the toughest part of the job. All too often, pricing managers and analysts join new teams with hopes of achieving great results and building their career. Only to find they are pretty much on their own. Fighting against unsupportive and siloed business environments with chaotic pricing operations and pricing system.
No matter what company or industry, the topic of pricing raises natural concerns, questions and even conflict between teams and functions. When you look at the causal drivers for this, the pricing team’s major problem can be traced back to how the pricing team and function was set up in the first place.
Thus, it is significant that we know the pricing manager job description to avoid these from happening.
- Many pricing executives are hired into pricing roles under false pretenses (pricing manager job description docs often do not represent the actual job, culture and team dynamics experienced)
- Pricing managers often enter businesses with a latent culture of compliance
- Existing teams are expected to work effectively with the new price leadership team with no prior engagement or input into the role of pricing and the new team
- Sales teams are expected to work effectively with a function without knowing exactly how they should work with the new pricing team and implement new ideas and changes
- New pricing team often work with teams that are weary about changing old pricing approaches and struggle to gain traction in the business
In this article on pricing manager job description, I will discuss how to recruit and set up a pricing team in the best way possible. In subsequent articles, I will give real world examples of how leading FT500 have set up and recruited their pricing teams using more commercial and innovative recruitment alternatives.
Our contention is that the recruitment model is broken into two main reasons: 1) its main focus is on one off commission fees (not its customer’s business objectives) and 2) it lacks the capability to find and set up cohesive and specialist pricing teams and create positive business environments.
Many businesses (without even knowing it) are at risk of margin loss from inadequate recruitment processes. A heavy reliance on a traditional recruitment model will mean that businesses will increasingly struggle to cope with the demands of specialist pricing hires and building high performance pricing and commercial teams.
The problem with pricing recruitment
The traditional recruitment model is falling short to build high performance pricing teams in B2B businesses. Pricing executives are typically recruited into businesses that have not fully addressed their pricing control function, team and culture situation. All the while, businesses expect their new and existing teams to work together to achieve substantial revenue, margin and profit growth without giving them first adequate training and support.
Business leaders have ready access to a number of potentially game-changing commercial ideas and resources at their fingertips. It can be tempting to chase after a new SAP integration (pricing tools software) to complex pricing issues, rush into hiring (weak pricing manager job description), or follow new research on cloud pricing because they all seem to provide some relief or a solution to a complex problem. What’s harder, but far more valuable, is to embrace the business problem and address it at the root.
Spend some time with your teams understanding your pricing situation and commercial challenges right now until they no longer pose a threat. Study them from various viewpoints and angles, and understand them on a deeper level. Rather than narrowing the scope of your final decision and options by rushing to hire a pricing team, remain receptive to the important problem – one tied to customer value, teams and commercial structures.
Uncomfortable truths will surface. You may find silos and too many priorities. You may even be top heavy and conflict avoidant. Also, you may be inspired to rip out business units, breakdown customer and product data, P&Ls and integrate new pricing teams with existing teams in ways you have never done before.
How leading businesses build their commercial teams – good pricing manager job description
To address complex HR and commercial challenges, progressive businesses like DHL, TPI /Cleanaway and GE are choosing to utilise more adaptive, commercial and innovative recruitment alternatives. A primary driver for change is the need to keep up with changing and unprecedented times. Many recruiters do not have the requisite pricing expertise or commercial knowledge to understand the requirements for technical and niche pricing management roles and draw up a useful pricing manager job description or recruit for the role. An under-investment in recruitment coupled with a poor understanding of pricing will automatically affect how, what and who you place into key pricing management roles.
Any business that competes on value has to realise that to implement pricing strategies and grow, it must first innovate and figure out how its HR initiatives and recruitment activities can yield talented teams that work well together and are better prepared and empowered to deal with complex problems.
The impact of not changing
When the pricing function is not thought out or designed to fit the business prior to a new team coming on board, its purpose and effort can be diminished by well-intentioned but harmful pricing bureaucracy, endless reports and analysis that does not get either read or acted upon. Even effective teams can be rendered ineffective when there is a lack of buy-in, mandate or support from key stakeholders in the business.
It can be a mistake to view pricing as a matter for the pricing team alone or to get complacent about pricing simply because a team is in place. It can be a mistake to rush into hiring pricing executives into the business without first defining the role of pricing in your business (pricing manager job description) and understanding exactly how the new pricing team fits in with your existing sales processes and teams.
Inadequate recruitment practices can lead to revenue and margin loss let alone substantial recruitment costs and wasted time and effort. If you want your sales and pricing teams to work well together and reach agreed goals under tight deadlines, existing teams must first be engaged with the development of the new pricing team before they come on board.
When existing teams understand the role of pricing in their business (due to a clear pricing manager job description) and they know what to expect from the new pricing teams, they trust (rather than reject) the support and expertise of the new pricing team.
What you can do about it right now
Consider “what’s needed – and what works” if you’re thinking of hiring a new pricing manager or analyst. Even if you’re simply replacing an existing role. It’s a new brand of recruitment that emphasises a 360-degree approach to recruiting and setting up a specialist pricing team. An approach that draws upon external outreach to stakeholders, extensive ties to sales and marketing managers and teams, expandable organisational structures tiers, and flexible membership to critical business transformations and projects.
Leading businesses, like DHL, Shell, GE, Parker, and Caterpillar are overcoming significant commercial challenges by addressing their value, teams and commercial structures. They think long and hard about the role of pricing and match their recruitment needs against their specific commercial requirements and business culture to find the right people and create a strong senior manager job description (which is also applicable to pricing manager job description).
The composition and set up of a team can make or break a new pricing actions function. Take care to think about the composition of your team in relation to your commercial requirements and business culture.
Who should the pricing function report to? What responsibilities should the pricing function hold? In addition, what skills and qualifications does a pricing manager need to have to solve pressing commercial challenges? What is pricing accountable for versus sales and marketing in the generation and delivery of revenues and margin that meet or exceed budget? A pricing manager job description is essential for a job in pricing to be successful.
“Pricing Manager Job Description: Why a job in pricing is often set up to fail” is written by Joanna Wells, Author of TeamBuilder360 and Director of Taylor Wells.
Taylor Wells is a specialist advisory firm that has developed a search, evaluation and recruitment process in the field of pricing, commercial and analytics. Our business was started after identifying weaknesses in the traditional agency recruitment model. The purpose is to support management and HR to eliminate the risk of a bad hire.
Our workshops and diagnostics ensure pricing or commercial teams are deeply engaged with the sales and marketing teams to achieve greater levels of margin and earnings growth. We have developed our own digital platform to identify and evaluate talent and we partner with subject matter experts to help us operate efficiently.
Pricing manager: How To Advance Your Pricing Career & Get More Money
Advancing a career as a pricing manager and commercial management is by no means easy. Pricing manager and executives tend to have to work that much harder than executives in sales, marketing or finance to prove their personal value and further their career. The relatively new development of the pricing manager function can present both career opportunities and setbacks (including relatively low base salary bands considering the substantial money generated from a functional and cohesive pricing management team).
A pricing manager and team can be the saviour one day, watching the EBIT gains come in after developing a sophisticated quoting tool. And, the enemy the next day, dealing with customer and stakeholder complaints and credit notes after a mismatched price rise. (An action most likely implemented to improve profitability quickly by a state, region or branch, but a result for which the pricing team is held largely accountable).
Getting a seat at the leadership table as a pricing executive is neither straight forward nor clearly mapped out. There are a growing number of large corporates in the USA, EU and ANZ with pricing executives on the leadership team (Rockwell, Caterpillar, Parker, GE), but this is not the norm. Many pricing managers complain that there is nowhere to go after pricing manager and or there are limited promotion opportunities to the leadership team.
Many pricing professionals re-focus their career path to marketing or finance because they struggle to find a suitable strategic pricing role at a senior level.
(See our blog on stress in the profession in price pressure)
If you have expertise and passion as a pricing manager, Taylor Wells believes that moving away from pricing management is a mistake. Pricing management is growing field and will continue to be so. It is better to stick through the stormy waters now and develop your skills and career, and reap the benefits later. B2B businesses need pricing expertise to drive commercial strategy and business model innovation in ever more complex B2B environments. However, a career as a pricing manager is not for the faint hearted; requiring pricing competency, positive attitude, persistence/energy, as well as a realistic career game plan.
What is holding you back from top pricing manager roles?
There is an expectation out there that if you just work hard enough, produce some long hours and do great work, the CEO and executive team will notice and promote you. Unfortunately, this does not happen as much as you think or would like. There are some executives in your business ready to take credit for your good work – a tough reality, but all too common.
Stereotypes & assumptions
There is a latent assumption/stereotype in the marketplace that analytical people are introverted, conservative and reserved in groups and/or are more likely to have trouble ‘fitting in’. It’s pretty fair to say that high calibre pricing and commercial executives are conscientious. They also tend to be high achievers and results focused. They may even lean towards the introverted end of the scale.
However, what most executives tend to overlook about successful pricing professionals is that they get such impressive results because they have mobilised, engaged and led teams. This includes, educating and informing sales, marketing and product teams on new pricing concepts and frameworks (previously unknown to most people). Also, utilising the skills and capability of the group to make the best pricing decisions and recommendations.
There is a shortage of strategic pricing roles and opportunities at the senior level. Even though pricing management is a growing field and function in Australia, the majority of pricing roles (although growing rapidly in numbers) are still tactical and operationally focused. Many pricing professionals struggle to find roles that are ‘suitable for their level, skills and capability. It is common for pricing people to settle for what they know rather than move to new companies largely because they fear they’ll make a bad career decision.
On the other side of the equation: There are very few businesses with objective insight into the capabilities of pricing people and teams. Consequently, recruitment, promotion and talent management programs tend to miss out on evaluating the right mix of skills and competencies that are required for executive pricing roles.
What can you do about it?
1.Understand your core strengths & capability
Securing the top jobs in pricing inevitably requires certain traits and characteristics (for a full discussion, please refer to my earlier article: “How to win great jobs in pricing”. But let’s not forget that getting the top jobs in pricing also takes a fair amount of honest self-reflection, focus and dedication.
If you want to advance your career, and unlock your full potential, you need to understand how well you do what you do, and why you do it. You need to consciously put yourself in the right role and business. You need to manage derailing behaviours. Moreover, you need to seek out targeted training programs that will bridge any skills gaps you may have.
Successful people in pricing tend to seek out objective feedback from people they trust and who have insight into their world and expertise. Many sit career assessments and have in depth reports on their pricing capability, personality and teamwork skills. Some build a network of professionals that can give them confidential and impartial feedback on their performance, the market, and suitable job opportunities.
It takes more than past experience or an impressive CV or LinkedIn profile to get noticed and stand out from a crowd. A CV says nothing about how well you perform best. It is risky relying on your CV or LinkedIn profile to get noticed by hiring companies, as it may attract the wrong companies. Check out our blog on price analysis.
2.Choose to work for companies that invest in pricing and people
Oftentimes, companies do not measure hiring as the “quality of hire” but as to how they fill jobs quickly. If you think of changing jobs, and you know you have great skills, it makes sense to concentrate your effort on businesses that look at both measures. Sure there will be more businesses that focus on time to hire over quality of hire, but this means that you’ll be saving yourself the headache of explaining yourself without reciprocation and you’ll be avoiding soul destroying recruitment processes that overlook exactly what they are meant to be looking for (for more information read: Price recruitment: Take Control of Recruitment and Test Before You Hire.
Having the right experience and skill set is just part of the puzzle. If you do not like how a job advertisement is written, and or the initial screening telephone call about a job and or the interview with the hiring manager(s), chances are you will not like the job, culture and values of the business (see customer value pricing). And, chances are that your unique skill set and expertise will be nullified or under appreciated by the business.
3.Get a career game plan
Getting ahead in pricing isn’t about luck. Top executives don’t wait for opportunity to happen to them. They have built a successful career after clear and thoughtful planning and many seek career counselling. In addition, they know the right career options for them based on objective evaluations of their personalities, behavioural patterns, skills, capabilities and background. Furthermore, they seek advice from experts and intelligently direct vital knowledge to advance their career.
Career counselling and career planning tools can provide impartial insight on personal values, interests, ability levels and potential. They give practical advice on how to manage strengths effectively so as to consistently elevate performance. When you understand the depth and breadth of your capabilities, potential, and the quirks of your personality, it is possible to learn to appreciate the processes you have created to function in the world. Targeted skills and career counselling will support you make small shifts that ensure your career is on the right track and you are in the right place. Collectively, these shifts can have a profound impact on performance, career, salary and well- being.
People are not held back because of some elusive and mysterious weakness. They are held back because they do not know their value and or have not aligned their value to the right company (i.e. they are in the wrong place, need more focused training and support or they are deploying the wrong behaviours).
More of the same is not always the best way to advance your career in pricing. There are many executives and senior leaders that lose their jobs because their strengths become weaknesses through overuse. Oftentimes, the very traits, capabilities and personal characteristics that launch careers and mark a person out for promotions are the same characteristics that can derail that same career down the line.
We all have blind spots and unconscious biases that bind us to a set of routine thought processes and feelings that govern how we live and interact with others (otherwise known as our comfort zone). We work best when we adapt and step outside our comfort zone and try something that feels strange, awkward and uncomfortable to begin with. But which accelerates our progress towards our chosen target or ideal role.
Pricing Career: No. 1 Challenge Preventing Pricing Executives From Success
Pricing career: Collaboration drives faster customer value discovery and more informed pricing decisions. However, our research shows that 64% of pricing and commercial professionals find building networks, partnerships and internal buy-in for better price and revenue management practices the most difficult things they do.
Large corporates in B2B and B2C markets from Retail, Chemicals, Energy, Manufacturing, Distribution and Technology continue to plunge headlong into earnings decline. A significant amount of the margin pressure B2B businesses experience can be explained by some level of resistance to changing existing pricing practices and management (i.e. moving from cost plus to more advanced pricing and revenue management).
The boards and executive management teams of some businesses are keen to re-examine existing pricing strategies, structures and operations, including supply and customer agreements and trading terms underpinning major deals and contractual supply arrangements. However, most are not even aware that their pricing, contracts and implementations are creating substantial margin leakage.
Pricing career success – multi-faceted skill set required
There are some leaders seeking to re-issue new price lists and re-set price margin differentials. The reason is to halt or slow the rate of margin erosion created by intense competition, savvy consumers, excessive discounting and wide scale disruption. Many, however, are implementing price increases without the correct level of pricing competence or understanding of their customer base.
This is bad for net profitability and terrible for hundreds of thousands of tired executives. Especially those coping with a range of new business issues and pricing challenges without the right level of pricing competence. And it will strangle the professional price and revenue management practice too (making a pricing career less appealing).
The choke hold on pricing progress will leave many businesses more vulnerable to margin loss. Namely, hampering efforts to explore new pricing and revenue opportunities and preventing executives from managing threats.
Intellectual innovation in business is not just essential to transformation projects, but also national transformation efforts too. Sharing IP and configuring specialised knowledge to solve complex business challenges draws upon top Australian and international executives and their ability to promote the continuous commitment to profitable growth, innovation, learning, technology and talent as transformative tools.
Yet, the future of more traditional Australian B2B businesses in an era of disruption remains unclear. The disruption created by modern start-ups, technology, AI and data has thrown businesses into disarray. Many pricing career leaders are not sure how to build networks and communities and or best share data and IP. Teams are questioning whether they should attempt and trial alternative pricing methods and approaches.
Many fear of making mistakes along the way.
Raising doubts about the risks and trade-offs involved in moving from a cost plus to a value based pricing culture.
That is unfortunate because better pricing and dialogue about alternative and better pricing methods and analytics does not expose businesses to risk. Better pricing prevents risk and costly mistakes while cost plus pricing often creates the risk of over-charging and undercharging customers.
Identifying and stopping margin erosion created by cost-plus pricing, unmanaged spend, poor supplier and customer agreements, throughput inefficiencies, de-centralised price admin, excessive discounting, and resistance all require collaboration. This means, sharing information and IP, learning better ways of setting and managing prices; and recruiting high calibre pricing executives with proven pricing skills and expertise.
To learn how leading businesses like GE, Whirlpool, IBM and Caterpillar are tackling the issue of resistance, capability gaps and resiliency, read our article on: Pricing Science: The secret to how big business unlocks their pricing power.
Managing an Underperforming Pricing Manager Career 📉📈
In any business, there’s always going to be someone who’s not performing to the level or grade you hoped they would. This is just working life. But, at some point, you may find that this someone is your pricing manager. And, if this is the case, you’ll probably want to have some options from HR. That is, to guide you on what’s best to do in this situation.
The problem is that it can be quite difficult to give pricing managers the feedback and support they really need. Pricing is one of those lesser-known functions in a business. The ROI for most training programmes is negligible. And, yearly appraisals and employee assessments often struggle to pick up on specific performance issues in pricing teams.
So, what HR options do you have to help your pricing manager with their performance? Is there something productive you can do to help correct their behaviour or address their skills gaps? Is firing them or moving them to another team the only options you have?
What do the experts say on an underperforming pricing manager career
The answer is no. There are other more productive options to choose from. If you have an issue with your pricing manager or team, take steps toward solving them as soon as possible. It can be very destructive to a pricing manager’s career, pricing project and business to do nothing about performance issues. These situations often do not resolve themselves. They often just get worse.
Some companies can be straightforward. They simply let go of the underperformer but most of the time it’s not very useful. Thus, you’ll be spending more resources to replace and train the new pricing manager.
Jean-François Manzoni, a professor of management at INSEAD and co-author of The Set-Up-to-Fail Syndrome: How Good Managers Cause Great People to Fail, says, “When you talk to senior executives, they’ll usually acknowledge that those don’t work”. So chances are, it’s up to you as the manager to figure out what to do.
“When people encounter an issue with underperformance, they really are on their own,” says Joseph Weintraub, a professor of management and organizational behaviour at Babson College and co-author of the book, The Coaching Manager: Developing Top Talent in Business.
In this article, we’ll explore steps to help an underperforming pricing manager career. We’ll argue firing the manager isn’t the only way to solve the problem. It is our belief that we can improve the pricing manager’s career. We’ll show a step by step approach.
Don’t ignore the problem
Too often we ignore problems. Weintraub says, “Most performance management problems aren’t dealt with directly. More often, instead of taking action, the manager will transfer the person somewhere else. If not, let him out of the loop in stay put without doing anything.”
This is not the solution. Don’t allow underperformance to ruin your pricing team. It’s not always that situations resolve themselves. It’ll just get worse. You’ll become more frustrated and that’s going to show. It’ll make the people uncomfortable. If you have an issue, take steps toward solving it as soon as possible.
Consider what’s causing the problem
Is the person not suited for the job? Does she lack the necessary pricing skills? Or is she just misunderstanding expectations? It’s also possible you might be playing in the problem. After all, it’s not always that it’s the pricing manager’s fault just as it’s rare that it’s the senior management’s. Don’t always focus on what the underperformer needs to do to rectify the situation. Think about what changes you can do as well.
Ask others what you might be missing
Before you act, make sure to look at all sides of the problem. You might talk to the pricing manager’s previous employer or his colleagues. When approaching other people, though, do it carefully and confidentially.
Talk to the person concerned on pricing manager’s career
Once you’ve talked to the others, talk to the pricing manager directly. Explain exactly what you observed, how it affected the team’s work and make it clear that you want to help.
It’s important to actively involve the person in pricing decisions and cost management solutions. Ask the pricing manager for solutions. Don’t expect an immediate response though. The person may need time to think about your feedback and come back later with some pricing strategies.
Confirm whether the person is reasonable
You can’t reason with someone who doesn’t agree that they need help. In the initial conversation and throughout the intervention, it’s essential that the pricing manager recognises there’s a problem.
On the other hand, if you see a willingness to change and a genuine interest in improving, chances are you can work together to turn things around.
Make a plan on improving the pricing manager’s career
Take steps to what both you and the pricing manager are going to do differently. Agreeing on actions so you can mark progress. You should also ask what it takes the manager needs to accomplish those goals. You don’t want her to make promises she couldn’t keep. Give her time.
Regularly monitor their progress
It’s a given fact many managers fail to follow up. Ask the person to check in with you regularly. Or set up a time and date in the future to check progress. Better yet, ask her if there is someone to give some feedback on her progress. It will send a positive message that you’re not going to sneak around her back.
It’s important to keep it confidential, while also letting others know you’re working on the problem. Don’t discuss the specifics with others but you can tell them that you’re working out on it.
If there isn’t an improvement, take action
If things don’t get better, try using harder tactics. It doesn’t necessarily mean firing her but you can impose other sanctions like suspension or demotion. Disciplinary actions, particularly letting someone go, shouldn’t be taken lightly. When you fire somebody, it not only affects that person, but also you, the firm, and everybody around you.
While it may be painful to fire someone, it may be the best way to preserve your team. The people left behind are the more important ones. When people feel the process is fair, they’re willing to accept it.
Praise and reward positive change
Of course, if the person makes positive changes, acknowledge it. Make clear that you’re noticing the developments and reward him accordingly. You want a team that can make mistakes and learn from them.
Principles to remember in managing a pricing manager’s career
Take action as soon as possible. The sooner you take action, the better. Plan out how to fix performance issues.
Forget to follow up — monitor their improvement regularly.
Give time coaching someone who is too stubborn to admit that there’s an issue. Talk about specific performance issues with others on the team.
Here’s a case study to apply the steps: Be ready to invest time
Allie Rogovin managed a five-person team at Teach for America when she brought in Max as a recruiting coordinator. The job had two main responsibilities: completing administrative duties that supported the recruiting team and managing special projects. Allie recognised that the administrative component wasn’t that exciting. But before long, Max was struggling with the core part of his role. “I realised a couple of months into the job he wasn’t getting his administrative duties done in time,” she says.
Allie started by giving Max an action plan template. She asked him to take 20 minutes at the end of each day entering and prioritising all of his tasks. Then reviewed his list every evening and gave him input on how he might shuffle his priorities the next day. They also started meeting three times a week instead of just once a week.
“He was a very valuable team member and I knew he could do a good job. That made me want to invest time in working with him,” she says. She continued meeting with Max regularly and reviewing his priorities for three months. Max still occasionally missed deadlines but he was showing definite signs of improvement. “We tweaked the plan along the way and he eventually got into the swing of things,” she says.
- Instead of letting go of an underperforming pricing manager, find the problems plaguing the manager. It takes considerable resources to replace and train a new pricing manager
- Once you find the problem, set aside some time to talk to the pricing manager. Discuss what ways he/she can do to improve his/her performance. Give him/her some leeway to admit that he/she has a problem. And it’s affecting not only him/her but also the pricing team.
- Getting into the heart of the problem why the pricing manager is underperforming needs patience and understanding. Therefore, you use drastic measures as the last option.
- The earlier you detect the problem, the better. In that way, can resolve it the soonest time possible.
- Use disciplinary actions if no improvements made.
- Remember pricing managers are humans, too and they also have personal problems. They may need to open up to what is bothering them.
- Confidentiality is key. The senior management should keep the discussion about the problems of the pricing manager between them. If details of the problem are known, pricing team is affected as well, as a result, affecting their performance too.
- Praise the pricing manager if there is a marked improvement in his/her performance. Everyone likes recognition for their efforts. It is a morale booster.
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