Pricing strategies: when we talk about pricing strategies at Taylor Wells, we are really talking about much more than just whether you should slightly alter prices on your long tail. Whilst that is really important (after you have put in place numerous sensible easy wins) – we also make clear how important it is to address communication issues and politics in a company. From our experience – these issues are usually the biggest hindrance to success for many pricing functions – i.e. they can not get buy in or support no matter how skilled they are, or how good their proposition is. When we look at really successful pricing transformations – they usually are part of a wider reaching company transformation also.

 

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We read an interesting and provocative article recently that touches on numerous corporate political and team work failings that we believe can really hold back a companies progression to a profit making machine. Some business thinkers have referred to a BDC – or Big Dumb Company as one that makes numerous mistakes that hinder growth and from our persepective – implementation of succesful pricing strategies.

 

We look at a number of examples of these failings to highlight how common they can be (and the impact they can have on a pricing function). We reference a blog post on the topic by Ron Alvesteffer and quote from it below:

 

Pricing strategies – how BDCs can hinder commercial success

The eight key failings include the following:

 

  • Bureaucracy
  • Prioritizing numbers before people
  • An intolerance for failure
  • Lack of vision
  • Trying to do everything  – no focus
  • Lack of people development
  • They measure the wrong things
  • Don’t communicate successes or failure

 

I think the list above can of course be read by almost anyone with a sense of recognition. However, we think it is very powerful to think what these weaknesses says about failure to implement pricing strategies.

 

Successful pricing transformations happen when the entire corporate (with senior leadership buy in) supports the function. When an organisation is silo-ed and different departments to not work together, discuss issues openly and operate with political rather than commercial objectives – any pricing team will under deliver.

 

The second key lesson we take from the list above is the focus on talent – and development of talent. However, when an organisation is excessively political – star performers may become disillusioned or feel they are wasting their time. In this context rewards may stem from something that is not delivering commercial success. See our blog on value based business strategy and how talent is key.

 

We would be interested on your feedback on the concepts above – and how you feel it has impacted your career and pricing team in the past.