Pricing Leadership is the ability of the corporate team to agree on the strategically sound pricing plan, implement it, and succeed in the marketplace. For the pricing professional to help the team reach a position of Pricing Leadership, he or she must develop the softer skills of business to complement the analytical capabilities. Pricing Leadership has a component of thought leadership, yet its true effectiveness is unleashed through motivating and orientating other individuals towards a common identified goal. To progress from Pricing Competency to Pricing Leadership, you must take four critical behavioral steps!
Step 1: Pick Your Battles
If you fight every little issue, people will consistently perceive you as arrogant or out-of-touch. In the end, this reduces your potential role as a pricing leader who helps create company strategy to one who at best, might provide technical pricing analysis. Pricing Leadership requires discretion; select in advance those issues you can champion, and which ones you will openly and proudly defer to the judgment of others.
Step 2: Explain, Don't Proclaim
Pricing Leadership implies that people willingly choose to follow an agreed pricing plan, not begrudgingly accept the restrictions of it. Teams will champion a plan when they understand the rational behind the decisions which formulated the plan. Authoritatively proclaiming your pricing plan is the right one ensures that others will find reasons to disagree with it.
Step 3: Understand That Pricing Is About Guidelines, Not Laws
Real life market situations will result in customer price transactions that are far different than those prices you developed at the strategic pricing level. In the end, the strategic pricing plan is just that, a plan, not a mandate. Good pricing plans are living creatures. They are flexible and evolve with time.
Step 4: Realize That Sales Is Your Ally, Not Your Enemy
Pricing professionals and sales teams have a common goal, to create customers and capture profitable revenues. As a Pricing Leader, you must find means to work well with the sales team. To the customer, the salesperson is the corporate advocate. To the corporation, the sales team is the customer advocate. As a pricer, please recognize their dual role and the unique insights they gain from being the conduit between the corporation and the customer.
Read the full article here: "Four Steps from Pricing Competency to Pricing Leadership."
2 comments:
The article made fine reading. You might want to add another step though i.e. collect and analyze data. It helps a lot to gain true understanding of the problems (or deciding which fight to pick) and is a good way to gain buy-in.
Abhinav
www.abhinav.sonaliagrawal.com/blog
Pricing strategy and execution typically generate little excitement unless companies are faced with major opportunities or threats. And often the pricing function or a multi-functional pricing organization is unprepared to tap the full potential of market opportunities. It is critical but also easier said than done that companies should build capabilities to stay ahead of good and bad times. As suggested by Tim Smith’s article, pricing practitioners should actively clarify their roles and impact within their own organizations. My advice to pricing colleagues is to start with small and steady steps to show continuous and measurable improvement. Here are a few tips that have worked me:
1. Baseline processes identifying who’s who and does what
• Understand motivations and needs of stakeholders by engaging them in regular brainstorms
• When initiating major market actions, ask internal stakeholders – what can go wrong if I do this and how do we avoid mishaps
2. Map processes to understand system and process leaks
• Initiate implementation where one has most control for sure wins
3. Be relentless in communication – simple, clear and consistent messages to internal and external customers
4. Organize your team for maximum reach and speed – reach out to other functions to support and get support
5. Broadcast successes for visibility to gain further support
Navdeep Sodhi
www.iSixSigmaPricing.com
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