Pricing Transformation: Pricing, It’s About Transformation
In my time in Pricing transformation, I have seen all sorts of pricing function setups at companies. I’ve seen companies with no pricing functions, lots of ‘one-man-band’ setups and those which have large sophisticated teams. The days having no dedicated pricing people in LEs (large enterprises) have thankfully passed. Many MEs (medium enterprises) now have at least one person.
>Download Now: Free PDF Future Proof Your Pricing Strategy
Table of contents for this article include:
I. Pricing, It’s About Transformation
II. 10 Pricing Transformations To Align Your Team To A New Operating Model
III. Pricing Transformation Is About Talent, Not I.T.
IV. Supporting Your Teams Through A Pricing Transformation
V. Transformation Pricing: Future Of Pricing & Revenue Management
Pricing, It’s About Transformation
If I was to label the different types of pricing functions and pricing methods I have seen, they would be as follows:
Pricing transformation – varying types of functions
-
Operational
Largely clerical responsibilities. Ensures the customer’s price is the correct agreed price in order to avoid invoice disputes and aged debtors. Savvy teams have IT experts to assist, otherwise, a whole lot of manual entry.
-
Analytical
The business wants visibility, trending of pricing and its relationship to revenue, profit and volume. Pricing teams with an analytical focus spend their entire lives slicing and dicing data to give the business yet another perspective.
-
Strategic
Outward looking, not just incorporating external data such as competitor prices but actively looking at trends. Understanding trends and competitive insights. Leveraging Marketing and Sales functions to agree on a strategy for pricing. In other words, influencing Sales and the Exec teams on a course of action.
-
Responsible
Following on from Strategic focus, one level up. Owning the business’s prices to the market not just influencing them. In addition, having a seat at the Exec table.
Let me first start by saying ‘where Accounting is about control, Pricing is about change and transformation’. What an odd thing to say, you may be thinking. However, I’m going to use this statement to highlight and contrast. I can talk from the heart because I once was an Accountant. A Finance Manager at a very large corporation who had a bit of spare time to dabble in pricing.
The vast majority of pricing functions I would say, operate in the ‘Operational’ & ‘Analytical’ space. That’s because business tends to view pricing as being out of control and hence tackle the problem by thinking ‘my problems in pricing will be solved once I get to grips with it’.
The number of Pricing functions who are ‘Responsible’ is far and few in between especially in B2B businesses. Also in B2Cs such as airlines, telcos, hotels, etc. They tend to have more examples of ‘Responsible’ pricing functions.
〉〉〉 Get Your FREE Pricing Audit 〉〉〉
You may ask, what’s the ideal Pricing structure composition?
The answer is, it needs to be capable across the full spectrum from ‘Operational’ to ‘Responsible’. In addition, imagine an Accounting function without General Ledger (G/L) software. The ability to report and control would be severely limited if only spreadsheets were used. Pricing is typically the poor cousin. Having the organisation’s prices sitting in multiple spreadsheets across the business makes absolutely no sense, given that there is always margin leakage in every business. It inhibits insights and agility when managing a key lever such as price to achieve revenue and margin growth. Sure ERP systems have G/L and Pricing modules. However, scratch the surface and compare each module side by side to understand there is little choice but use spreadsheets to calculate and develop pricing. Arm Pricing with powerful relevant software.
Pricing is about change & transformation. As the markets evolve, become global etc. traditional thinking on pricing needs to change. Where once ‘Sales did pricing’ or Marketing were responsible, this can no longer be the case. I’d argue that Pricing’s role in an organisation is now not only about leading the pricing evolution that’s occurring in the market, but also driving changes internally to support it.
aa
In a fluidic market, the ‘set and forget’ mentality to pricing no longer works, especially for B2B. There’ll always be exceptions. Pricing can become engulfed by exception management. The pure control approach to pricing needs to be relegated to history.
Instead, the challenge ahead is to recognise that buyers can and do move across multiple channels. Buyers have greater visibility through e-commerce and now expect a seamless buying experience regardless of channel. A seamless experience (i.e. price consistency), across online, retail or even direct will become a strategic advantage as one generation replaces another. Price consistency for one buyer, however, cannot mean the same price for all buyers. Herein lies the challenge.
The sooner Pricing transformation evolves from purely a control focus, the greater will its contribution be to the organisation in leading transformation.
10 Pricing Transformations To Align Your Team To A New Operating Model
How you go about aligning your teams to a new operating model can make or break your business. The reality of digital transformation is not easy. Transformations are the riskiest time for your business. Many transformations just don’t work out well. We see, for instance, a growing number of teams working long hours and overtime implementing new systems and online pricing strategies for little or no added benefit or results. For the most part, that is because management has not prepared their teams for change as well as they could have.
In this article, we will discuss some strategic pricing transformation tips to align your teams successfully with a new operating model
We find that companies that successfully build high performing strategic pricing teams implement lean and agile pricing and team principles.
We believe that selecting a transformational path aligned with your situation and inspirational goals can drive change across the organisation.
Design Principles that Drive A Strategic Pricing Project
Below listed are 10 important design principles to consider as you embark on a major digital pricing improvement initiative.
10 Pricing Transformations:
| # | Team building Principle | Explanation |
| 1 | Customer focus | Teams have an unwavering focus on how they deliver value for their customers and are anchored in their customer’s journeys, products, and services |
| 2 | Agile | Teams learn quickly from their mistakes and successes to drive continuous improvements for the business and their customers |
| 3 | Lean | Teams are leaning to eliminate waste and complexity and flat to avoid bureaucracy |
| 4 | Safe | Team management focuses on cultivating trust and psychological safety |
| 5 | Autonomy | Teams are autonomous, highly skilled and empowered to make fast, competent decisions |
| 6 |
Cross-functional |
Teams work cross-functionally and collaboratively to achieve shared goals |
| 7 | Flexible | Team structures are flexible to grow and adapt through a constant evolutionary cycle |
| 8 | Digitally savvy | Teams implement a modular/flexible price architecture, data infrastructure, and price optimisation software delivery |
| 9 | Competent | Teams can develop and implement a price and value management system that produces clear strategies and goals through the organisation |
| 10 | Accountable | Teams facilitate information sharing and tight feedback loops to break down barriers and bring out the best in the business |
The design principles (above) do not just apply to companies that have yet to start their transformation. In our experience, even companies that are well along their transformation journey can pivot to focus on the same design principles and deliver in turn massive value while significantly reducing costs.
Case studies
Australian banks, Westpac & Common Wealth have made great efforts to transition teams to a new operating model using some of the design principles above. In recent months, for example, the bank has transformed its customer experience, decision journey and pricing using SIX Sigma methodology. A major piece of this work involved re-routing a substantial amount of their in-branch customer traffic to digital channels. There has also been a lot of work around dramatically reducing their brick-and-mortar footprint and improving its online price strategy and optimisation process.
B2B case study
Similarly, progressive B2B industrial rental equipment, office supplies and Agrichem businesses in Australia have also been through a process of designing new digital channels to go direct to market. As markets change, this business realised that their new goal had to be avoiding the commoditisation trap occurring between themselves and powerful middle man operators by building a direct to market solution. From here, they hired niche pricing and data talent to help them work out their online pricing strategy. They also invested heavily in consultants and new IT systems to improve their operational efficiency and develop a customer-focused price list based on evidence and data.
Key learning on pricing transformation
Agile transition through a digital transformation required that both of these businesses had the right people data and analytics. Prior to making these changes, the HR directors of these organisations created a baseline for their companies’ workforce to prepare for the firms’ shift from a traditional industrial company to a software one. The data collected on the workforce and its transferable skills have proven to be invaluable. Both businesses are now able to analyse and make quick decisions about restructuring and refocusing their staff. Not only to address the needs of the project but also massive disruptions to the market. They are now capable to seize pricing, revenue and margin opportunities that will emerge beyond any crisis or change.
The true worth and flexibility of digital transformation is not the system it’s your baseline talent.
Other key takeaways from the case studies are:
- Strategic pricing teams of the future need to be quick, precise, and flexible.
- The team-building process is highly interative and follows an evolutionary cycle.
- Tasks performed by strategic pricing teams will become more complex and will be subject to change, as the market changes.
- Improvements in cognitive-intelligence capability will mean that software will be replacing a lot more basic price admin tasks via automation
- There will be a greater need for testing pricing options through experimentation; and the team will need to pivot and learn from mistakes to refine strategies, pricing structure and operations.
Discussion
Indeed, a large part of the success of agile firms — and of embedding positive behaviours throughout the organisation — rests on how successful leaders are in building agile teams. Leaders must work collaboratively across the organisation to define and mobilise cross-functional talent pools that can work together to deliver specific priorities and objectives. But it is not enough that leaders build agile teams. They also have to build what we at Taylor Wells do, ‘smart taskforces’. In their most basic form, smart taskforces are diverse, inclusive, and configured for a precise purpose. They feature not only a mix of skills, expertise, and viewpoints but also a blend of gender, racial, and cultural backgrounds. They require leaders who can establish trust through empathy, recognise their own cultural preferences, and gather different viewpoints to achieve organisational goals.
To get an idea of how hard finding this kind of leader is, consider that among Taylor Wells 3,000 leadership and skills assessments, not one included a score in the top 25% of all the traits and competencies that comprise our inclusive leader model. So, focusing on developing them or hiring them is critical.
Implication
As important as the members of the pricing team is its purpose. The most successful pricing teams and task forces are brought together to solve a specific problem and create and capture value— often caused by an unforeseen internal or external event — by using data and the combined creativity and insight of its diverse members. Part of what makes these pricing teams so successful is that they are configured and dissolved on an ongoing basis to retain the agility to respond to rapidly fluctuating situations.
〉〉〉 Get Your FREE Pricing Audit 〉〉〉
Conclusion
Pricing, revenue and margin management is set to become a much more integrated and sequenced way of improving customer journeys and internal processes.
The difficulty will be getting it right: You will need the right teams and the right strategy to connect deeply with your customers and the market.
How you build your teams and the path you take to reach your business and operating goals will be the deciding factor of success.
Pricing Transformation Is About Talent, Not I.T.
A growing commercial requirement for many Australian businesses today is sophisticated price variation analytics and software implementation. Businesses are now in a race to find more people specialised in artificial intelligence pricing to manage, inform and operate AI-driven price variation software. The digital age has created a journey of pricing transformation.
Talented teams with technical knowledge, creative thinking, and new pricing skills promote transformation. The problem is that 46% of global talent leaders cite finding candidates in a high demand talent pool as a major obstacle. Not having vital pricing skills and capabilities goes well beyond the lost productivity of a few individuals. It also threatens to derail careers, price improvement initiatives, takes a toll on morale, and hampers overall organisational results. Businesses must find a solution.
As a result, organisations need individuals with pricing skills that are instantly applicable and match the needs of their business. On the flip side, for those individuals with relevant and cutting-edge skills, the job market is a rich ground for competition for their pricing expertise.
Price variation by artificial intelligence
Contrary to popular belief, price variation by artificial intelligence is less about technology and more about people. You can buy any technology. However, your ability to adapt to an ever more digital future depends on developing the next pricing team. One with the necessary skills, closing the gap between talent supply and demand.
In this article, we’ll explore the ways companies can find the talent they need to drive a digital price variation and ensure long-term commercial success.
It is our belief that while the future is more ambivalent and uncertain than ever, we are confident that a pretty strong bet on the future is to focus on upskilling people so that they are better equipped to adjust to change.
It is our contention just as automated pricing activities are more about people rather than technology. Therefore, the key technical skills are soft skills, not hard skills.
What good is high tech equipment if no qualified people to operate it?
One of the most obvious consequences of the current Covid-19 pandemic is the infusion of data-enabled pricing into all aspects of the business. Hence, we expect automated price variation to have an even bigger impact for organisations in the short-term future.
While every job requires learning, we are accustomed to familiarity, routine, and simplicity. As we go through the same routine everyday, we become complacent in our jobs. Thus, the big loss is, we may go through our entire working lives without discovering our true potential.
This is good in the short term because we can do our jobs on autopilot, freeing up mental resources. However, this is counterproductive in the long run because we lose what we gain through experience. We won’t learn new pricing talents. In the end, we’ll miss opportunities that will further our careers and expand our horizons.
If anything, an even bigger proportion of jobs, tasks, activities and careers will find innovative ways to coexist in the digital world. Working in the digital world will increase our client base to more places than within the immediate vicinity. It will give more insight into consumer buying habits on an international scale.
Here’s how to prepare for that price variation eventuality
Remember these 5 tips:
1. Put people first
Technology is always about doing more with less. Yet, that combination is effective only when pairing with the right human skills. Just as technological disruption has generally led to automation and the elimination of outdated jobs, it has also always created new jobs.
This is why innovation is commonly described as creative destruction. However, the creative aspect of innovation is entirely dependent on people. If we can upgrade people’s pricing skills with technology, we can combine humans and technology. It’s really quite simple; the most brilliant innovation is useless if we are not skilled enough to use it. Even the most brilliant human minds cannot create pricing solutions if they don’t team up with tech.
2. Focus on soft skills
Just as automated price variation is more about people rather than technology, the key technical skills are soft skills rather than hard skills. Technology is of no use if there are no people with the necessary skills.
Selectively invest in people most adaptable, curious, and open-minded to make your organisation more pricing-centric, since nobody knows what the next trend in technology will be. Hence, the best thing is to bet on the people who are most likely to develop them.
3. Drive change from the top for price variation
The idea of grassroots change is both romantic and intuitive. However, change is much more likely to happen if you start from the top down. This does not mean creating autocratic or hierarchical structure, or that you need a culture of fear. It’s a simple matter of leadership, whether transactional or transformational. It has never been clearer that leadership — both good and bad — flows down to every single aspect of the organisation. The single most important factor in determining the effectiveness of a pricing transformation: the CEO or head of the firm.
4. Make sure you’re acting on data price insights
Currently, much of the discussion focuses on AI (artificial intelligence), or specific types of pricing computer intelligence. A better competitive advantage is to harness valuable datacom pricing, having the necessary skills to translate that data into pricing insights. And, above all, it is able to act on those insights.
Pricing data without insights are trivial, and insights without action are pointless. Too many business leaders operate under the belief that if they hire pricing experts or invest in AI tools, they will somehow become more high-tech.
5. If you can’t fail fast, make sure you succeed slowly.
Speed up and operate at a pace to adapt to a constantly changing and rapidly disrupted pricing. Of course, there is always an exchange between speed and quality. When you fail, it will make you stronger and smarter. In effect, you need to be sure that your long-term pricing strategies are working out. In other words, it’s okay to succeed slowly if you can’t fail fast.
Implications
The talent landscape has changed, and traditional recruitment techniques are becoming less and less relevant. To compete in the modern world, organisations must take a forward-thinking approach when it comes to finding, improving, and retaining the talent that will ensure future success.
When leaders think about investing in technology, they should first think about investing in the people who make that technology useful.
The best way to make your company innovate automated pricing variation is to selectively invest in those who are most adaptable, curious, and flexible in the first place.
〉〉〉 Get Your FREE Pricing Audit 〉〉〉
Conclusions
Without the proper skills, even the most brilliant of all innovations become irrelevant; even the most impressive human minds will become less useful if they don’t team up with tech.
In the end, technical competence is temporary. But when technical upgrades are necessary, intellectual curiosity will always take over.
Pricing variations all starts with each and every one of us. The key is to nurture curiosity, even outside of a crisis.
Discover your company’s full potential to drive profitability using pricing transformation.
Supporting Your Teams Through A Pricing Transformation
Price leadership
One of the best things about supporting businesses build price leadership and commercial teams (such as key account manager) is listening to executives share their price leadership and people stories with me.
Over several years, I have learned that building a high functioning pricing team is as much about establishing the right team habits and norms as it is about selecting the right people for the right roles.
I have also learned that successful leaders and teams are constantly learning and adapting to new ways of working and managing in order to achieve ever more complex goals and outcomes.
An important theme to emerge after years facilitating meetings, interviews and workshops is how globalisation, technology, competition and talent shortages are demanding leaders and teams re-think the delivery of value in the marketplace. The need to embed value deep within the organisation is a hot topic for discussion at most price leadership meetings.
Yet only a handful of traditional businesses are managing to reconfigure their organization structure to tap new sources of supply and customer demand. When it comes to redesigning, most businesses draw out org charts without using a clear model or framework to review all the organisational value drivers required to drive either better ways of working and channel new forms of consumer/customer behaviour.
In this article, I will share with you real stories from the field and explain how leading, traditional B2B and B2C businesses are redesigning their approach to channel resources, transform ways of working and build new platform-based operating models.
Why a strict hierarchical structure is a bad news for value creation
Often when I listen to executives in meetings discuss organisational redesign, the end result is pretty underwhelming – i.e., usually some minor flattening out of a traditional hierarchy, or perhaps a structure broadening into a matrix design in parts of the organisation. After much talk of channelling resources in the pursuit of greater “customer-centricity” and “value”, what I actually see is pretty much the same, traditional hierarchy within the “new” structure (and some new boxes and lines added to reflect aspirations for deeper connections with customers and consumers).
When this happens, I know that the “new” structure (even with the best intentions) will eventually cut across the pricing transformation and other programs. I also know that it will only be a matter of time before people in the business become thoroughly confused or worse still leave the business to find a “better” job.
How a global logistics business successfully redesigned their org structure through pricing transformation and leadership
From what I have seen, successful pricing organisations have leaders and teams that focus on how they will reach their desired future state while achieving a healthy balance between hierarchy, staffing and decision making equality. A case in point is a global logistics company whose decision to replace the entire network’s static, cost-based pricing strategy with a more dynamic, value-based price architecture also prompted a successful organisation redesign.
Under the business unit’s prior organisational structure, Operations and Sales were largely responsible for coordinating and managing the price list for thousands of Origin-Destination Pairs (ODP) in APAC, EU and emerging markets. They were located in the United States and rewarded largely on the performance of US sales volume and operational efficiency.
There was no real dedicated pricing manager or expertise in the US business or systems in place to either guide regional teams through the global price optimisation program. There was also limited analytical capability. Teams were struggling to translate the performance output for a complex and vast list of ODPs across various regions, markets and customer segments.
The business unit was about 10 months into their pricing transformation program and the executive team was noticing some signs that their organisation’s structure was not working for them. They noticed that a couple of new regional-pricing initiatives were failing; mergers were getting messier and critical acquisitions were falling through.
aa
The price leadership transformation began to drag and the project team was concerned that they were not reaching key milestones on time or budget. All the while, less noticeable issues relating to the business unit’s org structure were creating difficulties across the business: There was a general sense of unease in the business unit (in both the corporate office, operations and sales branches).
Ideas agreed upon at or near the top of the organisation were not being turned into competent actions. Price rise initiatives were still being poorly executed, causing even their most loyal customers to complain and worse still switch to competitors.
Technical issues with the price leadership transformation also started to emerge: Data management and integrity were causing delays. Segmentation was not marrying with new systems (see the article on pricing software tools) rules and logic. ERP and price software configuration was slow and laborious.
Vendors were offering more problems than solutions. Executives in the business were spending lots of time in meetings, but delivering very few outcomes. And, across mid-tiers of the business unit, there was confusion over roles and responsibilities and day-to-day work priorities.
To support a new global pricing strategy and to develop integrated margin management across international borders, the company decided to separate US operations from its global counterpart and put in place a new structure (including changes to the top team), new processes, new systems, new teams and a new approach to price management.
aa
They also made a trial to dedicated talent management processes in selected regions. This included, redefining roles and team structures in line with future vision and strategy. Isolating the exact tasks and operations required to address regional challenges and constraints. They then commissioned the development of a customised pricing competency model and implemented a domain-specific pricing assessment platform to identify and promote high calibre pricing executives within the business unit.
Once this was completed, they soon realised that they needed to find external talent to fill gaps in technical knowledge. They also introduced an online targeted pricing training platform for all new and existing pricing, sales and marketing teams.
This intensive redesign and dedicated talent management program helped the business promote international and domestic growth, especially in key emerging markets such as China, Cambodia, Russia (where sales have doubled or nearly tripled). The new price leadership capability and performance management system provided the business with a holistic and impartial view of pricing and performance across all regions and portfolios.
Teams were primed and responding well to egalitarian decision making and governance processes. Leaders and teams were encouraged to experiment and test new ways of “managing.” Staff turnover decreased and new KPIs and incentives schemes were introduced to recognise the contributions of talented leaders and teams.
〉〉〉 Get Your FREE Pricing Audit 〉〉〉
Conclusion
Most organisations today rely on creativity, innovation and employee contribution to build value-generating ecosystems and profitable businesses. Traditional hierarchies are suitable for businesses that focus on simple repetitive tasks that don’t require any creativity or innovation. Strict hierarchies, for the most part, are largely inefficient and ineffective in business today.
Flattening an organisation isn’t just about rearranging an organisational chart. It’s about empowering employees to make and participate in decisions and communicate with anyone across the company. In addition, it’s about identifying organisational value drivers and your sources of competitive advantage. It’s also about re-aligning your people to long term strategic objectives. And constantly communicating, educating and reminding people how to perform in the new structure.
When organisational strategy changes, structures, roles, and functions will also need to change. Often, businesses underestimate how much price leadership roles, responsibilities and competencies;can change during a pricing transformation and staffing can be inappropriate. When this happens, your people and future employees — and even functions — can begin to work against each other. Consequently, the pricing transformation can stagnate.
An organisational redesign is an iterative and ongoing process of trials, tests and adjustments. There is no such thing as a perfect structure. However, you will know when you have the right organisational structure for your business. How? That is, when it is based on the value your business generates for your customers. It is flexible to specific market challenges. It empowers (rather than inhibits) your people to make more informed decisions.
To learn 7 techniques that both traditional multinational organisations (like GE,;BP and Schneider Electric) and platform businesses (like Airbnb) are using to design value organisations, read our complimentary follow-up article: “7 ways to build a value organisation”
Also, check out our blog on price value and whether prices are always relative. Also, get out the textbooks for a review of price elasticity theory.
Transformation Pricing: Future Of Pricing & Revenue Management
Transformation Pricing: The future of the pricing and revenue management function
The way we manage price and revenue to drive profitability has fundamentally changed. The age of data, analytics and platforms are driving transformation pricing in almost every corner of the economy and of society from education, media to health care, energy and government.
No matter what your business and operating model or market is, the same rule applies: Pricing models and revenue management is changing at the same rate of speed as your business model because they are all inextricably linked. The problem is, though there are only a few people out there with the skills, capability and mindset to help you re-think and manage sustainable earnings growth in highly competitive and disrupted markets.
Gone are the days of pricing czars from finance (often untrained in value based & dynamic transformation pricing) controlling businesses’ revenues and profits based on basic cost assumptions. Relying on spreadsheet technicians to manage price across complex B2B and B2C markets is now a reckless revenue management practice, neither adhering to Sarbanes Oxley or ACCC compliance requirements.
Giving sales people discretionary pricing authority without clear pricing tactics and guidelines has been shown to encourage excessive discounting, as well as increasing customer dependency on discounts and freebies.
Adding a fixed mark-up on cost to price our goods and services says to our customers we are not focused on generating value for ourselves let alone them. It demonstrates that we have applied little to no thought (or science) in our pricing logic and decision-making. It says that we are more focused on covering our costs than solving significant problems for our customers.
To clarify, all of these traditional pricing practices damage your brand, reputation and lead to significant margin loss.
Platforms eat pipelines for breakfast – the impact of disruption on pricing transformation and value creation
Traditional business models are being disrupted and abandoned daily. We are seeing the phenomenon of platform businesses reconfiguring value creation by building efficient supply chain pipelines, distribution and customer networks.
Forward thinking traditional business like GE, BP, Whirlpool, Caterpillar, John Deere are all trying to follow the modern platform trend and organise their people for change. They are de-linking from costly internal resources and supply chain operations and thinking of new ways to scale and grow their businesses into the future.
Large, traditional businesses that continue to compete on the basis of resources that are owned internally will increasingly struggle to compete with platforms simply based on price (or excessive discounting tactics).
Likewise, many B2B businesses have fallen into bad times because they are weighed down by massive fixed assets and CAPEX. A growing proportion are being replaced by modern, new platform-based businesses, offering customers what they want and at the price they are willing to pay (and without the cost of inefficient and expensive intermediaries). Many are offering your customers freemiums (low cost pricing strategy) to lure them away from you right now.
Pricing as an output of value
How we price to customers and consumers has fundamentally changed. A price is not just and input of demand, it is an independent output of customer value. Price is the summation of the total economic value we provide to our customers. It is the end result of the value our customers perceive we generate for them.
The prices we decide to broadcast to the world (via a price tag, label, price list or board price) says a lot about who we are, what we stand for and the sustainability of our business and operating model. Also, it says a lot about whether we understand our customer base or not.
Nowadays, customers are much more aware of our prices than ever before. The internet and online aggregator sites have made it instantly possible for our customers to check and compare our prices with our suppliers.
aa
Customers want and expect that our prices reflect the value they will receive from us. If they do not perceive they are getting value from us they will stop buying from us and switch to our competitors.
Companies that do not appreciate this fundamental shift in pricing and business will be phased out and suffer along the way the dreaded ‘jaws of death’ scenario (steady revenue and declining margins).
〉〉〉 Get Your FREE Pricing Audit 〉〉〉
Conclusion – transformation pricing
The management of human resources is shifting from employees to networks of potential consumers and customers. The primary venue for activities where value is created for our customers is shifting from an internal production department to a collection of external producers. Making the management of external resources, suppliers and networks the key price leadership skill of the future and requires expertise such as team management skills.
It’s now time to grow the business from functional integration and network co-ordination. Building a pricing and revenue management team will help you to shift the focus from traditional resources management and supply to building communities and assets you can influence.
A high performing transformation pricing team is like no other team you have in the business because they have known for a long time that the chief locus of wealth creation is outside of the business with customers rather than inside the organisation.
In a world waking up to reality that it’s a race to build the largest value ecosystem the fastest, the company with a pricing and revenue management team focused on achieving complex pricing and growth targets will be your new source of competitive advantage.
Build a pricing team to maximise the value-building impact of your transformation path. Remember to re-think your team structure and key roles using a transformation framework and competency model so that you never lose sight of your strategic pricing goals, requirements and vision for the future.
Don’t fall into the trap because many have and re-build just another pricing admin team focused on daily operations. Pricing for prosperity is not about running day to day price reviews, checks and basic tactics. It’s about translating complex value equations into prices that drive profitability across the value; chain so that everyone in the ecosystem benefits, prospers and grows.
If you want to find out how to attract and hire the best pricing professionals, then read:
CVs and interviews are the worse predictors of success in a role
For a comprehensive view on maximising growth in your company,
Download a complimentary whitepaper on How To Drive Pricing Strategy To Maximise EBIT Growth.
Therefore;
Are you a business in need of help to align your pricing strategy, people and operations to deliver an immediate impact on profit?
If so, please call (+61) 2 9000 1115.
You can also email us at team@taylorwells.com.au if you have any further questions.
Make your pricing world-class!
B
Therefore
