Pricing Manager Recruitment 👨💼: Hiring the Right Pricing Teams
Pricing manager recruitment should be about finding the right people for the right team. But very often we see HR’s pricing manager recruitment process going awry, yielding less than suitable candidates for the team..
Many businesses including Fortune 500 and ASX businesses spend millions if not hundreds of millions of dollars on recruiting commercial teams using unreliable interview methods. Results are not always the best.
So, in this article, we will be answering the following key questions about pricing manager recruitment:
1. What makes a great pricing team?
2. Do companies hire for talent or personality?
3. What are the interview methods used to find that one gem?
Table of contents for this article include:
Pricing manager recruitment: Hiring the Right Pricing teams
According to our latest research on hiring pricing talent,; most interviews are completely ineffective methods of identifying price and revenue management teams.
In fact, the time spent on interviews almost doubled since;2009 and the cost to hire is the highest it’s ever been.
Interviews are arguably the most difficult technique to get right because interviewers; should be asking relevant questions that predict good pricing and revenues hires. Unfortunately, most questions just don’t hit the mark—mainly because they focus on past behaviour and experience – failing in turn to identify core traits, competencies and capability for new pricing teams and positions.
And getting a product pricing manager to run the interview for you doesn’t seem to be making the problem better either: In fact, our research shows that, even though pricing managers may have some great capabilities, they are not necessarily great at interviewing. Their focus is on finding people that can do the job now – not people who can adapt to the needs of the business now and in the future.
Very often pricing manager recruitment lead interviews by focusing on their own needs, rather than on the needs of the business or the candidate. Interviews can go off on tangents and questions do not explore personal traits and attributes enough. Much of the notes produced are often unhelpful to final decision making.
The problem with interviewing people like this is that it’s a big waste of time. It’s a terrible indicator of predicting personality traits and job performance. Interviewers are commonly swayed by their biases as they evaluate the candidate. This further reduces the predictive accuracy of job interviewers. And you don’t get the people you really need in your pricing team.
So which pricing manager recruitment method is the best one?
Proponents of informal job interview questions say these are effective at ensuring you hire the right fit for the business. Sure, they may yield some interesting conversations, but what’s more important to you: Someone who can get on with everyone OR someone who can get the job done and make you money?
It’s time to leave interviews behind and use new and more scientific methods instead. And sure, you may be thinking, I want to get to know the kind of person I’m hiring. However, there’s no evidence that interviews will help you to do this. And, even if it were true, the scenario of missing out on great hires because of unreliable and biased interview methods only makes sense if the company isn’t concerned about finding the best pricing talent for the business.
Alternative approaches for pricing manager recruitment
So, what’s a better way of doing a pricing manager recruitment?
Pre-employment assessment answers – such as work samples, cognitive ability tests, behavioural tests and domain capability assessments – are all good predictors of job performance for pricing team.
Our research shows that domain pricing assessments using a multi-trait assessment model, including General Mental Ability (GMA) Tests is the best way to find people for niche, specialist roles like pricing.
How do we know? We’ve been building pricing, finance and data analytics teams for leading businesses in Australia, EU, US and UK for over 15 years using scientific methods and research.
We are pricing industry experts and psychometricians, we do not ignore the finding that GMA is critical. No, we incorporate this into our assessment model, but we go one if not two or three steps further: We also measure and assess for other important capabilities and competencies related to helping executives build world-class commercial pricing and revenue management.
If you’re thinking of building or re-structuring your pricing team, we recommend that you hire for individual pricing capability, not just experience. Here’s why:
You need a mix of experiences and capability to accelerate profit results. These experiences don’t have to be the same as your business, but some experience of pricing is good. Too much is not good, as it’s difficult to unlearn bad habits. Strong domain knowledge and strategic thinking are also critical to pricing – otherwise, the team won’t be able to solve new problems when they arrive.
The right mix of traits and abilities for pricing manager recruitment to look for
CV star power isn’t everything, you need the right mix of traits and abilities to get a pricing team performing well. And of course, the right team structure, tools, strategy and support from executive management. Culture is the no 1 factor here, you can get a great team, but if they’re set up for failure, they will fail in their mission to drive profitability for the business.
In fact, it’s hard to identify who’s really got what it takes to do the job of a pricing manager or analyst when you haven’t got research, analytics or benchmarks to compare applicants against. How did they acquire their domain expertise? Can they apply and synthesise their knowledge and experience to produce results and make money? Can they solve your problems?
A domain pricing expert is someone who is not related to the technological aspect of your business, but has deep knowledge about the particular industry and discipline: i.e, they understand causal relationships and are great analytical thinkers.
Our domain pricing manager recruitment and commercial testing and evaluation system assesses candidates across many dimensions to ensure you get someone who can drive your strategy and culture while driving EBIT growth safely along the way.
There is no scientific proof that interviews are effective. It has been long regarded as wasteful and costly exercise. Replacing it with a new and more scientific process designed for pricing teams can help you. To keep up with the rapid change in your market; as well as the evolving pricing discipline and talent market.
General problem-solving skills are important in predicting job success. However, the traditional interview has played out its role in identifying these skills in the pricing team.
It’s true some form of an interview can find some of the best there are; but it’s such an enormous waste of money, time, energy and very much down to chance and luck.
Companies have become more specific about the pricing skills they want in pricing roles. Now they’ve almost overlooked the very traits, capabilities and behaviours that really drive high-performance pricing and profitable revenue growth.
Pricing recruiters: How to Build a Perfect Pricing Team
Recently, a finance manager of one of our customers asked me an interesting question; “Is it really that important to engage the organisation with pricing before we build our pricing team or couldn’t I just get people in there and work it out from there with pricing recruiters?
To build a perfect pricing team you need 3 things: the right pricing strategy, key stakeholders aligned to the strategy, and the right mix of skills. For so many reasons only a handful of companies complete these steps before building their teams. It is far more common to see companies getting people into the roles and functions first and then working the rest out as they go along.
Neither approach is right or wrong, companies face many competing challenges. However, if your mission is to find cash quickly and effectively then there is no substitute for setting up your pricing team properly (and before hiring people you are not sure are going to be successful in high profile pricing and commercial roles and functions).
How to build the perfect pricing team for maximum result by the Pricing recruiters
If you want significant EBIT results, visible behavioural change in the organisation and happy customers then it might be wise to do a little more planning in the early stages so that you have a cash-generating commercial and pricing function helping you grow the business now and in the future. This article discusses how to build the perfect pricing team for maximum results. However, we will also explain how to build a perfect pricing team when you have a limited budget for pricing recruiters, organisational support and strategy in our next article.
After analyzing the pricing capability of over 100 FT500, ASX 500 and Privately owned businesses in Australia; and the individual pricing competency of over 300 senior pricing and commercial executives, there are a few necessary steps to build a perfect pricing team along the journey to a value pricing culture. These steps include:
Senior management engagement
- A clear understanding of the pricing situation now and where the organisation wants to be in 6- 18 months
- Analysis of cross-business unit performance
- Awareness as to what a pricing function can do
- Business re-organisation to enable the proposed pricing function i.e. reporting lines, controls, work with marketing etc
- Estimation of Cost / Benefit analysis or Return on Investment (ROI) of a pricing team
- Recruiting a team with the right mix of skills, capabilities, attitudes and potential
- Recruiting key personnel incorrect order and enabling/empowering them throughout the organisation
- Providing analytical support required for optimum benefit – i.e. data, IT etc
- How high-quality pricing recruiters would set about helping you reach your objectives
As you can see – this is a pretty long list of necessary steps. However, they can be done quickly and effectively with the right systems, frameworks and processes in place. None of them will happen by themselves, but they will generally flow from 1-9 as listed below.
Senior management engagement
Creating real change is not easy to a corporate structure and will require effort and drive from senior stakeholders, usually from the CEO and the leadership team. The major changes required need executive championing otherwise internal rivalry, laziness and the status quo (“this is how we do things”) as well as protecting turf (“this is a marketing role”) will stifle any proposed changes.
Recognition of weakness in corporate go to market approach
Is management commercially focused enough to realise a change is required or is even possible? Is sales a “black box” that is left to the sales team? Often finance only looks at the numbers and does not help drive market strategy. A rough awareness of pricing is needed. Often this can be a “lightbulb” moment.
Analysis of cross-business unit failings
Who will perform the analysis needed? Will external consultants are required to analyse failings or can it be done in the house? Can an under-performing team analyse itself and suggest improvements? Often strong voices can be found internally but have not been listened to. Senior management must enable someone to perform a thorough analysis.
Awareness of what a pricing function can do
Most consultants do not really understand what a pricing function can do as they have not worked in a commercial business. Pricing remains a niche area in Australia and has not made the cross over as yet that it has in the US and Germany.
I have seen thorough studies of sales departments that have not mentioned pricing in the conclusions, as the consultants are not aware of the power of pricing. A key element of success is engaging someone with pricing expertise and awareness to explain and interpret the potential available.
Business reorganisation to enable the proposed pricing function i.e. reporting lines, controls, work with marketing etc
Pricing is by its nature a multi-disciplinary function. It does not sit in finance, sales, marketing or strategy but requires input from all and buy in to be successful. Often reorganising reporting lines and business set up is required to create “space” for the pricing team. Issues will clearly arise as managers may not be happy with the proposed changes.
Estimation of Cost / Benefit analysis or Return on Investment (ROI) of a pricing team
Prior to scoping roles, an estimate of the expected benefits available is required. Whether this is a margin enhancement strategy, a price optimisation to secure business or a refocus on key accounts, an understanding of pricing is required to estimate the benefits available.
Recruiting a team
For specialist roles, in house HR is often not capable of finding, training and supporting the hires as required. External agency recruiters also struggle in this regard. Envisaging the team that is required and roles performed by different personnel will also require consideration and potentially specialist pricing recruiters.
Recruiting key personnel incorrect order and enabling/empowering them throughout the organisation
To ensure new staff hit the ground running and do not get lost in the initial period, it is vital to place a number of key staff first. Additional staff added to the team once it has the required base.
Providing analytical support required for optimum benefit – i.e. data, IT etc
A pricing team will look at data in ways that the company is not using before. Industry studies show that pricing analysts can spend up to 60% of their time merely cleansing data to enable meaningful analysis.
Give early consideration to process the data requirements and capabilities of the organisation and attempts made to fill any gaps.
Ensuring that data capabilities grow prior to the team implementation will fast track benefits obtained.
Pricing Manager Career: How To Manage A Diverse Pricing Team
Have you been asked to run a culturally diverse pricing function as part of the next step in your pricing manager career? By this I mean, pricing teams from different parts of the world – some of whom work remotely – with significant cultural differences, personalities and outlooks. Have team members found a way to harness their differences and work well together or are they struggling to gel as a team?
If the latter situation is the case, don’t worry. Often, when you inherit a culturally diverse pricing team there are going to be teething issues and language barriers. Some team members may not have total fluency of the English language. Then, there are cultural norms and nuances influencing and/or suppressing preferred behaviours, communication styles, outlooks and beliefs. Such differences, of course, may impact any pricing function, but in this case, they can emerge from a clash of diverse cultural outlooks.
So, in this article, we will be discussing how to manage a diverse pricing team in the best way possible. We argue that when cultural differences and tensions are not managed correctly; pricing team performance and communication break down.We believe that when tensions mount without being resolved by the head of pricing or pricing manager, conflicts on feedback and deadlines to complete projects can very often be interpreted on a very personal level; stiffing, in turn, creativity and problem solving and even damaging team morale.
The solution to managing multicultural pricing teams effectively is to acknowledge the underlying cultural roots of conflict and address underlying negativity quickly.
Use this code if you wish to use the infographic.
<a href="https://taylorwells.com.au/pricing-manager-career"><img class="size-full wp-image-35339" src="https://taylorwells.com.au/wp-content/uploads/2020/02/Mapping-Teamwork-6-1.jpg" alt="Mapping Framework For Pricing Teams" width="800" height="5834" /></a>
There are four categories that can create barriers to a pricing team’s ultimate success and your pricing manager career:
- Direct versus indirect communication – communicating in Western cultures is typically direct and explicit. In cross-cultural communication, members from non-Western countries may find the “say as it is” way of talking rude, brash and confronting. While other members of the pricing team may find the “going around the bush” method of the non-Westerner frustrating slow and off point
- The trouble with accents and fluency – members who aren’t fluent in the team’s dominant language may have difficulty conveying their pricing knowledge. This can prevent the strategic pricing management group from using their pricing expertise and create frustration or perceptions of incompetence.
- Differing attitudes toward hierarchy and authority – team members from hierarchical cultures expects treatment according to their status in the organisation. Members from egalitarian cultures often do not. Failure of some members to honour those expectations can cause humiliation or loss of face
- Conflicting norms for decision making – each team member uses different ways of making decisions, including how much analysis is required beforehand to make that decision. Some prefer making decisions quickly and may grow frustrated with those who need more analyses and time. Careful planning is essential to find the right pricing strategy, there is no reset button if a mistake occurs
To ensure a smooth pricing manager career transition, use these four strategies to deal with cultural differences on your new team or function:
- Adaptation is the ideal strategy because the team works effectively to solve its own problem with minimal input from management and learns to adapt. It works when team members are willing to acknowledge their cultural differences and to assume responsibility for figuring out how to live with them. Hence, full cooperation required to make an effective pricing team
- Structural intervention is a deliberate reshuffling reducing interpersonal friction or to remove a source of conflict for one or more team members. This approach can be extremely effective, especially when some team members are proud, defensive, threatened; or clinging to negative stereotypes of one another. Therefore, managerial intervention sets the ground rules early in a pricing team’s life. So that they can establish positive norms right from the outset. The manager, in turn, confronts the problem directly; telling the members that they have been chosen for their task expertise, not their fluency in English. The team has a unique team-working framework of working out language barriers in a productive way
- Exit is removing certain members from the team, project or even the business. Thus, leaving the team is the last resort for managing cultural problems. In short-term situations, unhappy team members often just wait out the project or wait until a problematic boss leaves. Utilised when conflicts get out of hand. Too much face lost on both sides to salvage the situation.
Here’s how you can work through diverse cultural differences as part of your pricing manager career plan
Although cultural differences do not directly contribute to the challenges of the pricing teams. It brings out other issues already embedded like clash of personalities and whose expertise is better. These should be rectified by the pricing leader.
The remedy would be pricing leaders who intervene early and set clear and positive norms. This means teams and managers who can structure social interaction and work to involve everyone on the team; and teams that can see problems as stemming from culture, not personality; approaching the issues with good humour and creativity.
Your team’s unique circumstances can help you determine how to respond to multicultural conflicts. Have a meeting with the members and bring out the problems that are stalling them. We’re not talking here about respecting differing ways for doing business. We’re referring to day-to-day working problems among team members. Thus, it is important to keep diverse pricing teams realising the very gains they set up to harvest. Such as knowledge of different product markets, insight into different customer groups, new ideas and healthy debate.
Pricing professionals often bemoan the unwillingness of even major businesses. To invest in strategic commercial and pricing teams that could deliver clear benefits to the corporation. However, there’s an issue of putting the cart before the horse as a corporation’s journey to travel before implementing an optimum pricing team; just as a business’ journey to move from cost-plus (or worse) to true value-based pricing. As what you can see from the brief key point list above; implementing a pricing function is a detailed and demanding process that requires multiple functions working together and assistance from pricing experts. However, every journey starts somewhere, and from my experience that is usually senior management engagement.
Or, feel free to call me on (2) 91994523
Alternatively, subscribe to Taylor Wells pricing channel now and get an update as soon as a new video is released.