Thursday, March 24, 2011
Friday, March 11, 2011
Tuesday, March 1, 2011
Monday, February 21, 2011
Warren Buffett Says Pricing Power More Important Than Good Management
Are you still having trouble convincing your C-Level of the value of pricing strategies and ongoing pricing training to your company’s profitability and growth?
Then maybe it’s time they listen to one of the most successful men in the world. Warren Buffett, the billionaire chief executive officer of Berkshire Hathaway Inc., told Bloomberg this week that he rates businesses on their ability to raise prices and sometimes doesn’t even consider the people in charge.
Read the full article here. With the economy still in flux, it is increasingly important for pricers to stay ahead of the competition by controlling their pricing power. Many of this years Workshops, Breakout Sessions and Keynotes have been designed to address these concerns and give meaningful strategies for pricers to take charge of their pricing in the 2011 global economy. We hope to see all of you in Chicago!
Then maybe it’s time they listen to one of the most successful men in the world. Warren Buffett, the billionaire chief executive officer of Berkshire Hathaway Inc., told Bloomberg this week that he rates businesses on their ability to raise prices and sometimes doesn’t even consider the people in charge.
"The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business."
Read the full article here. With the economy still in flux, it is increasingly important for pricers to stay ahead of the competition by controlling their pricing power. Many of this years Workshops, Breakout Sessions and Keynotes have been designed to address these concerns and give meaningful strategies for pricers to take charge of their pricing in the 2011 global economy. We hope to see all of you in Chicago!
Friday, February 18, 2011
Pricing Strategies for Product Managers by Linda Gorchels
Question: How can organizations insure that they are leveraging pricing strategies and tactics across all functional disciplines to get bottom line results?
Answer: Begin by cross training individuals within the organization on the relevance and importance of pricing training in each department and equip management teams with a pricing toolkit: starting with the Product Manager.
In this course individuals will learn the role of the Product Manager in developing a pricing strategy as well as how to interpret upstream and downstream product pricing issues. Since pricing is the key to profitability and growth stimulation, product managers will be able to speak with their CFO’s about “true” product and customer costs and establish prices on a product line basis.
Answer: Begin by cross training individuals within the organization on the relevance and importance of pricing training in each department and equip management teams with a pricing toolkit: starting with the Product Manager.
In this course individuals will learn the role of the Product Manager in developing a pricing strategy as well as how to interpret upstream and downstream product pricing issues. Since pricing is the key to profitability and growth stimulation, product managers will be able to speak with their CFO’s about “true” product and customer costs and establish prices on a product line basis.
Tuesday, February 1, 2011
PPS 22nd Annual Pricing Wokrshops & Conference - Chicago May 3-6 2011
On behalf of The Professional Pricing Society’s entire team, I am honored to present you our 22nd Annual PPS Spring Pricing Wokrshops & Conference in Chicago.
Our Spring Conference will get you updated on the strategies, tactics, tools and resources you need to improve profitability and boost your pricing career.
The complete program is outlined on this link www.pricingsociety.com/chicago2011 or in the video you can watch in this page. Please allow me to describe some exciting news for you:
A Full Day Added to the Program: Due to PPS Member demand, we have added an extra day to our event. For those new to pricing, we strongly recommend Kent Monroe’s “Core Pricing Skills” 2-day workshop. Another great option is Reed Holden’s 2-day “Pricing with Confidence” workshop, which will show give you the tools necessary to advance your pricing efficiency. In addition, Tim Smith will lead a 1-day workshop on Tuesday the 3rd entitled “Influencing Customer Price Acceptance” for those who want to concentrate on capitalizing on the value provided to their customers.
On Wednesday, May 4th, you have the continuation of the 2-day workshops plus your choice of four excellent day-long Pricing Training Workshops: Avy Punwasse – “Progressing to World Class Pricing,” Alice Warhol and Oliver Griebl – “Pricing to Stay Whole in Wholesale,” Frank Luby’s Consumer Products workshop,
and Reuben Swartz’s workshop – “Positioning, Pricing, and Profits for Better Performance.”
All of our workshops also grant credits to those pursuing the Certified Pricing Professional (CPP)designation.
Pricing Training for Any Level of Expertise: Whether you are relatively new to pricing and seeking basic information or you are experienced within the pricing discipline and are interested in fine tuning your skill set, we have a comprehensive workshop designed to fit your needs.
Responding to Your Needs: Our event continues on May 5-6th with a strong variety of
keynote addresses, expert opinions, interactive sessions and practitioner success stories all geared towards applicability in today’s market conditions. Charlie Peters, Executive VP at Emerson and Stephan Liozu, President & CEO of Ardex America will discuss strategic issues from a senior management pricing practitioner viewpoint.
Paul Hunt, Eugene Zelek, and Mark Burton also will discuss ways that you can improve your pricing skill set in keynote addresses.
So please join us for our expanded 22nd Annual Spring Conference in Chicago, where
you can reconnect with your peers and gain the knowledge needed to increase your pricing expertise, advance your career and company goals. We look forward to seeing you in Chicago!
Kevin Mitchell
President
Professional Pricing Society
Our Spring Conference will get you updated on the strategies, tactics, tools and resources you need to improve profitability and boost your pricing career.
The complete program is outlined on this link www.pricingsociety.com/chicago2011 or in the video you can watch in this page. Please allow me to describe some exciting news for you:
A Full Day Added to the Program: Due to PPS Member demand, we have added an extra day to our event. For those new to pricing, we strongly recommend Kent Monroe’s “Core Pricing Skills” 2-day workshop. Another great option is Reed Holden’s 2-day “Pricing with Confidence” workshop, which will show give you the tools necessary to advance your pricing efficiency. In addition, Tim Smith will lead a 1-day workshop on Tuesday the 3rd entitled “Influencing Customer Price Acceptance” for those who want to concentrate on capitalizing on the value provided to their customers.
On Wednesday, May 4th, you have the continuation of the 2-day workshops plus your choice of four excellent day-long Pricing Training Workshops: Avy Punwasse – “Progressing to World Class Pricing,” Alice Warhol and Oliver Griebl – “Pricing to Stay Whole in Wholesale,” Frank Luby’s Consumer Products workshop,
and Reuben Swartz’s workshop – “Positioning, Pricing, and Profits for Better Performance.”
All of our workshops also grant credits to those pursuing the Certified Pricing Professional (CPP)designation.
Pricing Training for Any Level of Expertise: Whether you are relatively new to pricing and seeking basic information or you are experienced within the pricing discipline and are interested in fine tuning your skill set, we have a comprehensive workshop designed to fit your needs.
Responding to Your Needs: Our event continues on May 5-6th with a strong variety of
keynote addresses, expert opinions, interactive sessions and practitioner success stories all geared towards applicability in today’s market conditions. Charlie Peters, Executive VP at Emerson and Stephan Liozu, President & CEO of Ardex America will discuss strategic issues from a senior management pricing practitioner viewpoint.
Paul Hunt, Eugene Zelek, and Mark Burton also will discuss ways that you can improve your pricing skill set in keynote addresses.
So please join us for our expanded 22nd Annual Spring Conference in Chicago, where
you can reconnect with your peers and gain the knowledge needed to increase your pricing expertise, advance your career and company goals. We look forward to seeing you in Chicago!
Kevin Mitchell
President
Professional Pricing Society
Wednesday, January 19, 2011
McKinsey & Company Pricing Expert Craig Zawada Joins PROS Executive Team
New Senior Vice President of Pricing Excellence brings world-class expertise to help customers drive profitability and growth
Houston, Texas – December 14, 2010 – PROS Holdings, Inc. (NYSE: PRO), a world leader in business-to-business pricing and margin optimization software, announced that Craig Zawada has joined the company as senior vice president, pricing excellence. In this role, he will provide customers with expert-level insight into pricing best practices and strategies, contribute his expertise to product development, sales, and marketing organizations within PROS, and actively work with other PROS executives on the strategy for the continued growth of the company. Zawada will report to PROS President and CEO, Andres Reiner. Zawada is a well-known expert in the area of pricing strategy whose experience spans a wide range of both B2B and consumer products. Over the past 17 years he has developed innovative pricing concepts and ideas in the areas of market strategy, post-merger pricing, Internet pricing, pricing in distribution, price implementation and pricing infrastructure. Zawada is also a widely-published author, whose articles have been featured in many highly-esteemed publications, such as the Harvard Business Review, Mergers and Acquisitions and the McKinsey Quarterly. He has been interviewed and quoted in Fortune, Canadian Business and Industry Week. He is perhaps best known for his role in coauthoring both the first and second editions of the book, “The Price Advantage,” which has been recognized as one of the most pragmatic books on pricing strategy available. As a frequently soughtafter presenter, Zawada has spoken on pricing strategy at industry conferences in North America, Europe and South America.
“We are thrilled to have Craig Zawada join PROS,” commented Reiner. “Craig is recognized around the world as one of the preeminent thought leaders in the area of pricing and profitability, and we’re excited to offer his expertise to our customers. His experience as a consultant and advisor to senior executives fits nicely with the pragmatic and prescriptive approach we’ve always taken to helping our customers achieve their pricing objectives.”
As Senior Vice President of pricing excellence, Zawada will further strengthen PROS commitment to customer success by providing meaningful insight and direction throughout their pricing journey. He will also provide customers guidance and expertise to ensure they maximize the value of their PROS solutions, which have proven to increase profitability, defend market share, and improve operational agility. Zawada’s years of experience working with many marquee companies on pricing will also serve as invaluable input as PROS continues to advance its software and services suite.
“I am excited to join PROS, which I’ve always considered the distinctive market leader in pricing software,” stated Zawada. “This is a pivotal time for the pricing market, as it has evolved to a point where manufacturers and distributors simply must invest in pricing software to remain competitive.
Pricing is now far too complex and the speed of business far too rapid to rely on anything other than advanced pricing technology to find and capture pricing opportunities. I am convinced that PROS prescriptive solutions, relentless focus on successful customer implementation and change management, and remarkable record of impact make us uniquely positioned to address this growing and substantial need.”
Zawada joins PROS from McKinsey & Company, where he served as a partner in the firm and coleader of the North American Pricing Practice. While at McKinsey, Zawada was focused exclusively on the pricing profession for more than a decade, assisting clients on pricing issues as well as conducting 3100 Main Street, Suite 900, Houston, TX 713.335.5151 www.prospricing.com NYSE:PRO research and development in the pricing field. Prior to this, he was a Senior Associate with a boutique consulting firm specializing in pricing. Zawada received a master’s degree in business administration in 1993 from the Schulich School of Business, York University in Ontario, Canada. He resides in Kimberley, British Columbia.
Houston, Texas – December 14, 2010 – PROS Holdings, Inc. (NYSE: PRO), a world leader in business-to-business pricing and margin optimization software, announced that Craig Zawada has joined the company as senior vice president, pricing excellence. In this role, he will provide customers with expert-level insight into pricing best practices and strategies, contribute his expertise to product development, sales, and marketing organizations within PROS, and actively work with other PROS executives on the strategy for the continued growth of the company. Zawada will report to PROS President and CEO, Andres Reiner. Zawada is a well-known expert in the area of pricing strategy whose experience spans a wide range of both B2B and consumer products. Over the past 17 years he has developed innovative pricing concepts and ideas in the areas of market strategy, post-merger pricing, Internet pricing, pricing in distribution, price implementation and pricing infrastructure. Zawada is also a widely-published author, whose articles have been featured in many highly-esteemed publications, such as the Harvard Business Review, Mergers and Acquisitions and the McKinsey Quarterly. He has been interviewed and quoted in Fortune, Canadian Business and Industry Week. He is perhaps best known for his role in coauthoring both the first and second editions of the book, “The Price Advantage,” which has been recognized as one of the most pragmatic books on pricing strategy available. As a frequently soughtafter presenter, Zawada has spoken on pricing strategy at industry conferences in North America, Europe and South America.
“We are thrilled to have Craig Zawada join PROS,” commented Reiner. “Craig is recognized around the world as one of the preeminent thought leaders in the area of pricing and profitability, and we’re excited to offer his expertise to our customers. His experience as a consultant and advisor to senior executives fits nicely with the pragmatic and prescriptive approach we’ve always taken to helping our customers achieve their pricing objectives.”
As Senior Vice President of pricing excellence, Zawada will further strengthen PROS commitment to customer success by providing meaningful insight and direction throughout their pricing journey. He will also provide customers guidance and expertise to ensure they maximize the value of their PROS solutions, which have proven to increase profitability, defend market share, and improve operational agility. Zawada’s years of experience working with many marquee companies on pricing will also serve as invaluable input as PROS continues to advance its software and services suite.
“I am excited to join PROS, which I’ve always considered the distinctive market leader in pricing software,” stated Zawada. “This is a pivotal time for the pricing market, as it has evolved to a point where manufacturers and distributors simply must invest in pricing software to remain competitive.
Pricing is now far too complex and the speed of business far too rapid to rely on anything other than advanced pricing technology to find and capture pricing opportunities. I am convinced that PROS prescriptive solutions, relentless focus on successful customer implementation and change management, and remarkable record of impact make us uniquely positioned to address this growing and substantial need.”
Zawada joins PROS from McKinsey & Company, where he served as a partner in the firm and coleader of the North American Pricing Practice. While at McKinsey, Zawada was focused exclusively on the pricing profession for more than a decade, assisting clients on pricing issues as well as conducting 3100 Main Street, Suite 900, Houston, TX 713.335.5151 www.prospricing.com NYSE:PRO research and development in the pricing field. Prior to this, he was a Senior Associate with a boutique consulting firm specializing in pricing. Zawada received a master’s degree in business administration in 1993 from the Schulich School of Business, York University in Ontario, Canada. He resides in Kimberley, British Columbia.
Wednesday, December 15, 2010
Monday, November 1, 2010
Zilliant Named An Innovative Software Company To Watch for 2010
Another exciting announcement from PPS Member Company Zilliant:
Zilliant Named An Innovative Software Company To Watch for 2010
Leading market research firm recognizes Zilliant’s price optimization technology as a visionary information access solution
Austin, TX – October 5, 2010 – Zilliant, the leading provider of price optimization and margin management solutions for B2B manufacturers, distributors, high-tech, and industrial service companies, today announced the company was named as a recipient of IDC’s Innovative Information Access Companies To Watch Under $100M1. Zilliant is recognized for their technology’s ability to help sales teams improve decision processes by providing pricing guidance directly to the point-of-sale.
"Smart pricing is one of the most potent competitive strategies a business can deploy in today's intelligent economy," the IDC report highlighted. "[Zilliant’s] software-as-a-service offering provides pricing guidance to sales professionals at the point of a deal negotiation...and drives measurable improvement in performance."
“It is an honor for Zilliant’s technology to be receive this award from IDC—especially with their commitment to recognize companies that have demonstrated real-world customer benefit,” said Rafe VanDenBerg, vice president of strategic marketing at Zilliant. “Numerous in-market validation studies conducted over the past five years have consistently demonstrated that our pricing science and technology helps companies win more sales at higher margins.”
Zilliant's Margin Maximizer optimizes prices, reduces risk in the marketplace, minimizes over-discounting in the field, and drives dramatic improvements to operating margins. As the only B2B solution capable of calculating accurate, segment-level price sensitivities from readily-available transaction data, Margin Maximizer is proven to help businesses win sales without going too far or giving-up too much. Zilliant’s analytics solution, Margin Insight, delivers deep visibility into over-discounting patterns, quoting errors, cross-selling opportunities, off-invoice margin erosion, and cost-to-serve variances.
IDC’s “Innovative Companies Under $100M to Watch” reports are a qualitative evaluation of a set of vendors within a specific market—they are not a stack ranking nor do they represent an exhaustive evaluation of all companies in a segment or a comparative ranking of the companies in the report. IDC solicited entries from vendors of less than $100 million that exemplify specific key trends (selected by analysts) that are driving change in a specific software market. Vendors then submitted case studies that exemplified one of the trend used as the basis for the award. These case studies were evaluated individually and independently by related market analysts across several pre-determined criteria. The teams then met to review the scores. The case studies submitted for review had to demonstrate that the technology was available, able to be implemented and provided real-world benefits to the customer.
Zilliant has been recognized in the Manufacturing Business Technology Top 40, S&DCE 100, Red Herring 100, Red Herring 200, Austin Business Journal’s Fast 50, and the prestigious Deloitte Texas Technology Top 50.
To keep on top of Zilliant developments, news, events and happenings please subscribe to Zilliant’s RSS Feed.
Zilliant Named An Innovative Software Company To Watch for 2010
Leading market research firm recognizes Zilliant’s price optimization technology as a visionary information access solution
Austin, TX – October 5, 2010 – Zilliant, the leading provider of price optimization and margin management solutions for B2B manufacturers, distributors, high-tech, and industrial service companies, today announced the company was named as a recipient of IDC’s Innovative Information Access Companies To Watch Under $100M1. Zilliant is recognized for their technology’s ability to help sales teams improve decision processes by providing pricing guidance directly to the point-of-sale.
"Smart pricing is one of the most potent competitive strategies a business can deploy in today's intelligent economy," the IDC report highlighted. "[Zilliant’s] software-as-a-service offering provides pricing guidance to sales professionals at the point of a deal negotiation...and drives measurable improvement in performance."
“It is an honor for Zilliant’s technology to be receive this award from IDC—especially with their commitment to recognize companies that have demonstrated real-world customer benefit,” said Rafe VanDenBerg, vice president of strategic marketing at Zilliant. “Numerous in-market validation studies conducted over the past five years have consistently demonstrated that our pricing science and technology helps companies win more sales at higher margins.”
Zilliant's Margin Maximizer optimizes prices, reduces risk in the marketplace, minimizes over-discounting in the field, and drives dramatic improvements to operating margins. As the only B2B solution capable of calculating accurate, segment-level price sensitivities from readily-available transaction data, Margin Maximizer is proven to help businesses win sales without going too far or giving-up too much. Zilliant’s analytics solution, Margin Insight, delivers deep visibility into over-discounting patterns, quoting errors, cross-selling opportunities, off-invoice margin erosion, and cost-to-serve variances.
IDC’s “Innovative Companies Under $100M to Watch” reports are a qualitative evaluation of a set of vendors within a specific market—they are not a stack ranking nor do they represent an exhaustive evaluation of all companies in a segment or a comparative ranking of the companies in the report. IDC solicited entries from vendors of less than $100 million that exemplify specific key trends (selected by analysts) that are driving change in a specific software market. Vendors then submitted case studies that exemplified one of the trend used as the basis for the award. These case studies were evaluated individually and independently by related market analysts across several pre-determined criteria. The teams then met to review the scores. The case studies submitted for review had to demonstrate that the technology was available, able to be implemented and provided real-world benefits to the customer.
Zilliant has been recognized in the Manufacturing Business Technology Top 40, S&DCE 100, Red Herring 100, Red Herring 200, Austin Business Journal’s Fast 50, and the prestigious Deloitte Texas Technology Top 50.
To keep on top of Zilliant developments, news, events and happenings please subscribe to Zilliant’s RSS Feed.
Friday, October 15, 2010
Monday, October 11, 2010
Monday, September 27, 2010
A Venture Capitalist's View on Pricing Fixing and Collusion
I ran across this article and thought it would be interesting to share. This is one area of pricing that we discuss in many different contexts, but this gives us an interesting perspective outside of the global pricing arena and into how pricing can and does affect small businesses and start-ups.
For background, you need to start here, with "AngelGate": "So a Blogger Walks into a Bar."
Synopsis: A successful small businessman walks into a room full of some of the most powerful angel investors in Silicon Valley - people he counts among his friends - only to find that the mood is less than friendly. After assessing the situation, he comes to the following conclusion:
Mark Suster, a highly successful two-time entrepreneur turned venture capitalist (who is also an active blogger who has followed the issue closely) provided an interesting commentary on this subject (in his blog "Both Sides of the Table") in which he looks at this issue from both sides and gives entrepreneurs advice on dealing with investor price fixing: "What Entrepreneurs Should do about Price Fixing"
He argues that A) the VC community (like AngelList) is small and B) yes, they talk because they are also interested in the same industries. One the other hand, investors are going to talk to other investors to help them make decisions on investments:
So from a pricing perspective, what is the absolute truth? Probably something in the middle - depending on which side you are coming from. As many in the pricing profession know, changes in American Pricing laws have challenged or effectively eliminated formerly convenient and narrow rules of thumb, resulting in a great deal of pricing freedom. But how far is too far? (If you are joining us in San Francisco next month for the Fall Pricing Conference, you should consider registering for a new workshop addressing this issue: "Making Pricing Flexibility Under the Law Work for You")
Any pricers out there that have been following this story and want to weigh in? I am interested to hear what others in the pricing community think of this unique pricing debate!
Want more? "AngelGate: The Sequel"
For background, you need to start here, with "AngelGate": "So a Blogger Walks into a Bar."
Synopsis: A successful small businessman walks into a room full of some of the most powerful angel investors in Silicon Valley - people he counts among his friends - only to find that the mood is less than friendly. After assessing the situation, he comes to the following conclusion:
"So what’s wrong with this?
"Collusion and price fixing, that’s what. It is absolutely unlawful for competitors to act together to keep other competitors out of the market, or to discuss ways to keep prices under control. And that appears to be exactly what this group is doing."
Mark Suster, a highly successful two-time entrepreneur turned venture capitalist (who is also an active blogger who has followed the issue closely) provided an interesting commentary on this subject (in his blog "Both Sides of the Table") in which he looks at this issue from both sides and gives entrepreneurs advice on dealing with investor price fixing: "What Entrepreneurs Should do about Price Fixing"
He argues that A) the VC community (like AngelList) is small and B) yes, they talk because they are also interested in the same industries. One the other hand, investors are going to talk to other investors to help them make decisions on investments:
"My assertion was that information flows outside of their process. People call each other. People call their friends. They’re not in search of price fixing or collusion, they’re in search of diligence information about the company."
So from a pricing perspective, what is the absolute truth? Probably something in the middle - depending on which side you are coming from. As many in the pricing profession know, changes in American Pricing laws have challenged or effectively eliminated formerly convenient and narrow rules of thumb, resulting in a great deal of pricing freedom. But how far is too far? (If you are joining us in San Francisco next month for the Fall Pricing Conference, you should consider registering for a new workshop addressing this issue: "Making Pricing Flexibility Under the Law Work for You")
Any pricers out there that have been following this story and want to weigh in? I am interested to hear what others in the pricing community think of this unique pricing debate!
Want more? "AngelGate: The Sequel"
Monday, September 13, 2010
United Rentals Inc. Deploys Zilliant Solutions to Enhance Pricing Operations Across Branch Network
Check out this exciting announcement from PPS Partner and Member, Zilliant:
United Rentals Inc. Deploys Zilliant Solutions to Enhance Pricing Operations Across Branch Network
World’s largest equipment rental company adopts price optimization to improve rental rates management across North America
Austin, TX – September 1, 2010 – Zilliant, the leading provider of price optimization and margin management solutions for B2B manufacturers, distributors, high-tech, and industrial service companies, today announced that United Rentals, Inc. (NYSE: URI) has deployed Zilliant Margin Maximizer and Margin Insight solutions across its integrated network of over 550 branch rental locations in 48 states and 10 Canadian provinces. United Rentals is also piloting Margin Manager with an expected full roll-out in early 2011.
“As the market leader, we sought to employ a tool that could offer us a rigorous pricing methodology to support our customer segmentation strategy and increase the effectiveness of our sales force,” said Michael Kneeland, CEO, United Rentals. “We selected Zilliant because the company has demonstrated success with their price segmentation and statistical scientific software technology that specifically addresses the pricing challenges we face every day.”
United Rentals deployed Zilliant Margin Maximizer to improve the quality and accuracy of customer rental rates to maximize return on assets. District and national account managers will leverage Zilliant Margin Manager to gain detailed visibility into the pricing performance of rental agreements and streamline the customer rental experience. Zilliant Margin Insight provides the organization clear visibility into margin and revenue performance across all branches, enabling them to take necessary action to on pricing opportunities quickly. Sales teams in the field also have the ability to access market-based rate guidance directly from mobile devices, ensuring quick and accurate transactions.
Zilliant's industry-leading Margin Maximizer and Margin Insight price optimization and management solutions improve all facets of B2B pricing — segmentation, analysis, setting and execution — increasing margins and maximizing profits. Margin Maximizer optimizes prices, reduces risk in the marketplace, minimizes over-discounting in the field, and drives dramatic improvements to operating margins, while its analytics counterpart, Margin Insight, delivers deep visibility into over-discounting patterns, quoting errors, cross-selling opportunities, off-invoice margin erosion, and cost-to-serve variances.
“Partnering with United Rentals reinforces Zilliant’s position as the leading provider of price optimization solutions in the equipment rental space,” said Greg Peters, CEO, Zilliant. “We are excited to work with the largest company of this type in the world, and are pleased to see United Rentals experiencing significant margin lift and greatly improved financial performance because of our technology.”
United Rentals, Inc. will present an in-depth look at its approach to rate optimization at Zilliant’s Executive Pricing Summit, September 22 in Las Vegas. The free, invitation-only Summit will focus on maximizing margins and minimizing risk during a recovery. Request an invitation here.
To keep on top of Zilliant developments, news, events and happenings please subscribe to Zilliant’s RSS Feed.
About United Rentals
United Rentals, Inc. is the largest equipment rental company in the world, with an integrated network of 554 rental locations in 48 states and 10 Canadian provinces. The company’s approximately 7,400 employees serve construction and industrial customers, utilities, municipalities, homeowners and others. The company offers for rent approximately 3,000 classes of equipment with a total original cost of $3.8
billion. United Rentals is a member of the Standard & Poor’s MidCap 400 Index and the Russell 2000 Index® and is headquartered in Greenwich, Conn. Additional information about United Rentals is available at unitedrentals.com.
About Zilliant
Zilliant is the leading provider of price optimization and margin management solutions for B2B manufacturing, distribution, high-tech, and industrial service companies. Zilliant uses existing transactional data to improve decisions across all facets of price analysis, price setting and execution. Zilliant helps companies achieve the best pricing possible on every deal, agreement, and price list, increasing profits by tens of millions of dollars. Headquartered in Austin, Texas, Zilliant is a privately held company. For more information contact Zilliant at 877.893.1085 begin_of_the_skype_highlighting 877.893.1085 end_of_the_skype_highlighting or visit www.zilliant.com.
United Rentals Inc. Deploys Zilliant Solutions to Enhance Pricing Operations Across Branch Network
World’s largest equipment rental company adopts price optimization to improve rental rates management across North America
Austin, TX – September 1, 2010 – Zilliant, the leading provider of price optimization and margin management solutions for B2B manufacturers, distributors, high-tech, and industrial service companies, today announced that United Rentals, Inc. (NYSE: URI) has deployed Zilliant Margin Maximizer and Margin Insight solutions across its integrated network of over 550 branch rental locations in 48 states and 10 Canadian provinces. United Rentals is also piloting Margin Manager with an expected full roll-out in early 2011.
“As the market leader, we sought to employ a tool that could offer us a rigorous pricing methodology to support our customer segmentation strategy and increase the effectiveness of our sales force,” said Michael Kneeland, CEO, United Rentals. “We selected Zilliant because the company has demonstrated success with their price segmentation and statistical scientific software technology that specifically addresses the pricing challenges we face every day.”
United Rentals deployed Zilliant Margin Maximizer to improve the quality and accuracy of customer rental rates to maximize return on assets. District and national account managers will leverage Zilliant Margin Manager to gain detailed visibility into the pricing performance of rental agreements and streamline the customer rental experience. Zilliant Margin Insight provides the organization clear visibility into margin and revenue performance across all branches, enabling them to take necessary action to on pricing opportunities quickly. Sales teams in the field also have the ability to access market-based rate guidance directly from mobile devices, ensuring quick and accurate transactions.
Zilliant's industry-leading Margin Maximizer and Margin Insight price optimization and management solutions improve all facets of B2B pricing — segmentation, analysis, setting and execution — increasing margins and maximizing profits. Margin Maximizer optimizes prices, reduces risk in the marketplace, minimizes over-discounting in the field, and drives dramatic improvements to operating margins, while its analytics counterpart, Margin Insight, delivers deep visibility into over-discounting patterns, quoting errors, cross-selling opportunities, off-invoice margin erosion, and cost-to-serve variances.
“Partnering with United Rentals reinforces Zilliant’s position as the leading provider of price optimization solutions in the equipment rental space,” said Greg Peters, CEO, Zilliant. “We are excited to work with the largest company of this type in the world, and are pleased to see United Rentals experiencing significant margin lift and greatly improved financial performance because of our technology.”
United Rentals, Inc. will present an in-depth look at its approach to rate optimization at Zilliant’s Executive Pricing Summit, September 22 in Las Vegas. The free, invitation-only Summit will focus on maximizing margins and minimizing risk during a recovery. Request an invitation here.
To keep on top of Zilliant developments, news, events and happenings please subscribe to Zilliant’s RSS Feed.
About United Rentals
United Rentals, Inc. is the largest equipment rental company in the world, with an integrated network of 554 rental locations in 48 states and 10 Canadian provinces. The company’s approximately 7,400 employees serve construction and industrial customers, utilities, municipalities, homeowners and others. The company offers for rent approximately 3,000 classes of equipment with a total original cost of $3.8
billion. United Rentals is a member of the Standard & Poor’s MidCap 400 Index and the Russell 2000 Index® and is headquartered in Greenwich, Conn. Additional information about United Rentals is available at unitedrentals.com.
About Zilliant
Zilliant is the leading provider of price optimization and margin management solutions for B2B manufacturing, distribution, high-tech, and industrial service companies. Zilliant uses existing transactional data to improve decisions across all facets of price analysis, price setting and execution. Zilliant helps companies achieve the best pricing possible on every deal, agreement, and price list, increasing profits by tens of millions of dollars. Headquartered in Austin, Texas, Zilliant is a privately held company. For more information contact Zilliant at 877.893.1085 begin_of_the_skype_highlighting 877.893.1085 end_of_the_skype_highlighting or visit www.zilliant.com.
Monday, August 23, 2010
Simon-Kucher and Partners Industry Pricing Series
This article is one of a long series of pricing articles that have been running in the Monthly PPS Newsletter. Called the "Industry Pricing Series" by Simon-Kucher & Partners, these articles offer numerous pricing strategies that, although explained in the context of specific industries, can be applied in pricing practices across multiple specialties and practice areas.
Introduction:
Ever wonder how Disney pricers think? In this article, the authors explore the top four challenges faced by pricers in the theme park and travel industries, as well as steps that pricers in these and other industries can take to effectively manage their pricing in challenging environments. Damien Robert is the Director in charge of Leisure & Tourism for Simon-Kucher & Partners and former Head of Pricing of Disneyland Resort Paris. Guillaume Alexandre is a Senior Consultant at Simon-Kucher & Partners. Both can be reached at www.Simon-Kucher.com.
Theme parks are exciting places for all who visit them, but the opportunity for thrills isn’t just reserved for the customers. Behind the scenes there is just as much to keep you occupied and for the head of pricing there is no exception. Pricing for a theme park is a challenging endeavour; it is a key revenue driver and the variety of problems puts it high on the CEO agenda. The top four on the list are:
1. The accurate measurement of willingness to pay for different segments… to avoid the inefficient 3% price increase rule
In many companies, the overall pricing strategy is driven by company financial targets, which are themselves derived from the mid-term plan and the decisions to invest in new rides. Yet for theme park activities the quality and accuracy of price management can be considered particularly important. There are two main reasons for this: the cost structure and the market demand elasticity.
Firstly, the small variable costs that each additional customer incurs can typically be more than compensated by the additional profits these customers will bring with on-site expenses such as food, beverages and merchandise purchases. When this is the case, ticket price drops can be profitable, even with “limited” price sensitivities.
Secondly, the total market size is not defined for such leisure activities. In many industries, a price drop would only allow a company to make short-term profits, since competitors would quickly react and all the market players would still have to share the same overall demand. But theme parks are pure leisure “nice-to-have” activities and a simultaneous price drop of all players can sometime result in an overall significant increase of demand and of industry profits. Conversely, a systematic price increase could be a very big mistake which may kill your business.
However, price increases may be necessary to fund investment for new attractions. These are often a good way of increasing volume capacities, duration of stays and frequency of visits. Thus, to achieve this without risking a park’s total demand, price decisions have to be based on an accurate measure of price sensitivity by customer segments.
A park, with a natural customer portfolio composed of mainly international and distant customers, has thus been able to make additional profits from a new product range dedicated to the local demand. The population living in the area was interested in coming but the entrance ticket price was a much higher barrier to visit than for international tourists. A significant (more than 40%), structural but fenced (not accessible to other customer segments) price decrease has generated new local demand flows without lowering the revenues made with other customer segments. The lower price ticket range was not available on high attendance days and sales and communication actions were not very visible to other customers. (For example, ticket prices were made accessible online only after postcode identification and advertising done through local radios and panels.)
This kind of segmented pricing is essential for profit growth but requires in-depth customer surveys with very solid business casing.
2. The stimulation of demand by creating urgency to visit and increasing the repeat purchase rates... without losing customer trust
Why should customers come to your park? Proactively stimulating the demand is a necessary job when you are selling "nice-to-have" products which are not essential to your customers.
In the leisure industry, many businesses play with customer behaviour by laying special emphasis on unique events and highlighting the risk to miss an opportunity that may never appear again. Unique concerts or major sport competitions are indeed "perishable" opportunities for customers who rush towards booking channels and outlets. How then to turn a theme park entry ticket into a perishable opportunity?
More than ever, parks are creating marketing events, seasons and anniversaries to suggest that visitors should come more often. However, the core offer of a park is generally not perishable. Disneyland Park in California is now more than 50 years old and the rides are only changing incrementally. This does not justify monthly visits for customers.
With nothing perishable to offer, playing with pricing tactics may be an alternative. Promotional offers and innovative multi-visit products can help to drive customer behaviour and generate new visits. This is not something that easy.
To launch the appropriate pricing initiative and really get money out of it, knowing the current customer mix and understanding the purchase behaviour of visitors is key. Experience shows that not all companies succeed in implementation.
A water park in Northern Europe launched an annual pass at three times the price of a single ticket, with only the knowledge that the standard average number of visits to a water park was 1.2. Sales clearly hit the roof, but it destroyed the experience and the revenues. Indeed, a very quick “customer survey” at the entrance of the park later showed that 50% of the total attendance was already driven by people coming more than six times per year and that these people had found in the new product a very good way to save money... Such breakthrough product launches require detailed customer insight and financial modelling. Furthermore, international leisure companies should be aware that each destination has to face specific customer behaviours and that nothing can be “copy-pasted” without taking serious risks.
Far better results were achieved by another leisure company who sent free nominative invitations to targeted customer families. The free invitation was only given to one family member and it had to be used for specific dates only. The letter was packaged in a premium way. The promotion was thus creating a unique event for the family who had to balance the pain of losing this perishable present with the cost for all other entrance tickets. On-site customer surveys helped to measure the impacts and to calibrate future promotion campaigns.
In conclusion, promotions can be a very powerful tool to stimulate the demand, but only on the conditions that the behaviour of customers is carefully analysed and that the promotion is kept simple. It is really important to focus on key offers and not to blur customer perception with very different messages coming from hundreds of small tactical actions. Otherwise, all promotion efficiency is jeopardised and customer trust is gone.
3. The constant adaptation of price offers to fully capture the willingness to pay of each customer segment... while keeping your offer simple and clear to everyone
Who is it that goes to Disneyland Resort Paris? Possible answers include families wanting activities that appeal to the whole group, those that are seeking thrills from the more extreme rides and those that buy into the fantasy aspect of the Disney characters. The customer base is thus very wide and within it there are very different income profiles, ranging from famous international soccer players to teenagers of Paris suburbs.
Therefore, one of the most important price management challenges is to develop and price all the offers that will capture the full willingness to pay of each customer segment.
Building and displaying a wide range of offers with increasing value and price levels are essential for two reasons. Firstly, it allows any customer to find an offer which corresponds to the price he is ready to pay. Secondly, it becomes easier to up-sell as you always have something slightly more attractive and expensive to put forward. To succeed, the value gaps between the price points must be really tangible, otherwise smart shoppers will systematically go for the less expensive offers.
For instance, seating categories are natural differentiators for sports events or concert tickets and allow the exploitation of different levels of willingness-to-pay. In the case of leisure parks, the differentiated range of offers is instead developed through additional activities like shows, food, beverages and merchandise. It is possible to have lunch in Disneyland Resort Paris from 9.95€ for a quick-service menu to a full experience with Princes and Princesses dancing around you for 55€ per person. Similarly, one can exit the park with a simple Disney pen as a souvenir or a Chrystal Castle.
4. The temptation to make easy "on-site" profits... that can impact overall experience perception
Once a visitor is in a park, sports arena, or movie theatre complex, the temptation is high to leverage this captive audience with aggressive pricing. However, numerous surveys have shown that some exaggerated prices were clearly impacting the intention to visit again and to recommend to friends the activity or the destination.
Again, a deep understanding of customer purchasing behaviour will help to limit the negative impacts. On-site visceral factors come into play and customers are ready to make additional expenses they may not have been prepared to before coming. But their price sensitivity is likely to increase if they perceive a loss of freedom. It is important to understand what is accepted by the customer and what is not.
Generally speaking, all the “need” expenses are very sensitive, while the “chosen” expenses are less problematic. For “need” expenses, a progressive range of value and price levels can reduce the negative perception. Consequently, theme parks should be able to provide low price alternative offers for lunch, but can try to extract more from the merchandising products.
Taking the right pricing decisions towards on-site spending requires having a global pricing team optimising those decisions, which is often not the case with BU centric price optimisations.
Conclusion
Pricing is a key element of the revenue optimisation for theme parks and leisure activities. It can only be achieved with intensive customer surveys and strong analytics. Pricing in leisure parks is really fun and exciting, but can turn to a nightmare if you do not have the proper tools and knowledge.
Introduction:
Ever wonder how Disney pricers think? In this article, the authors explore the top four challenges faced by pricers in the theme park and travel industries, as well as steps that pricers in these and other industries can take to effectively manage their pricing in challenging environments. Damien Robert is the Director in charge of Leisure & Tourism for Simon-Kucher & Partners and former Head of Pricing of Disneyland Resort Paris. Guillaume Alexandre is a Senior Consultant at Simon-Kucher & Partners. Both can be reached at www.Simon-Kucher.com.
Theme parks are exciting places for all who visit them, but the opportunity for thrills isn’t just reserved for the customers. Behind the scenes there is just as much to keep you occupied and for the head of pricing there is no exception. Pricing for a theme park is a challenging endeavour; it is a key revenue driver and the variety of problems puts it high on the CEO agenda. The top four on the list are:
- The accurate measurement of willingness to pay for different segments… to avoid the inefficient 3% price increase rule
- The stimulation of demand by creating urgency to visit and increasing the repeat purchase rates... without losing customer trust
- The constant adaptation of price offers to fully capture the willingness to pay of each customer segment... while keeping your offer simple and clear to everyone
- The temptation to make easy "on-site" profits... that can impact overall experience perception
1. The accurate measurement of willingness to pay for different segments… to avoid the inefficient 3% price increase rule
In many companies, the overall pricing strategy is driven by company financial targets, which are themselves derived from the mid-term plan and the decisions to invest in new rides. Yet for theme park activities the quality and accuracy of price management can be considered particularly important. There are two main reasons for this: the cost structure and the market demand elasticity.
Firstly, the small variable costs that each additional customer incurs can typically be more than compensated by the additional profits these customers will bring with on-site expenses such as food, beverages and merchandise purchases. When this is the case, ticket price drops can be profitable, even with “limited” price sensitivities.
Secondly, the total market size is not defined for such leisure activities. In many industries, a price drop would only allow a company to make short-term profits, since competitors would quickly react and all the market players would still have to share the same overall demand. But theme parks are pure leisure “nice-to-have” activities and a simultaneous price drop of all players can sometime result in an overall significant increase of demand and of industry profits. Conversely, a systematic price increase could be a very big mistake which may kill your business.
However, price increases may be necessary to fund investment for new attractions. These are often a good way of increasing volume capacities, duration of stays and frequency of visits. Thus, to achieve this without risking a park’s total demand, price decisions have to be based on an accurate measure of price sensitivity by customer segments.
A park, with a natural customer portfolio composed of mainly international and distant customers, has thus been able to make additional profits from a new product range dedicated to the local demand. The population living in the area was interested in coming but the entrance ticket price was a much higher barrier to visit than for international tourists. A significant (more than 40%), structural but fenced (not accessible to other customer segments) price decrease has generated new local demand flows without lowering the revenues made with other customer segments. The lower price ticket range was not available on high attendance days and sales and communication actions were not very visible to other customers. (For example, ticket prices were made accessible online only after postcode identification and advertising done through local radios and panels.)
This kind of segmented pricing is essential for profit growth but requires in-depth customer surveys with very solid business casing.
2. The stimulation of demand by creating urgency to visit and increasing the repeat purchase rates... without losing customer trust
Why should customers come to your park? Proactively stimulating the demand is a necessary job when you are selling "nice-to-have" products which are not essential to your customers.
In the leisure industry, many businesses play with customer behaviour by laying special emphasis on unique events and highlighting the risk to miss an opportunity that may never appear again. Unique concerts or major sport competitions are indeed "perishable" opportunities for customers who rush towards booking channels and outlets. How then to turn a theme park entry ticket into a perishable opportunity?
More than ever, parks are creating marketing events, seasons and anniversaries to suggest that visitors should come more often. However, the core offer of a park is generally not perishable. Disneyland Park in California is now more than 50 years old and the rides are only changing incrementally. This does not justify monthly visits for customers.
With nothing perishable to offer, playing with pricing tactics may be an alternative. Promotional offers and innovative multi-visit products can help to drive customer behaviour and generate new visits. This is not something that easy.
To launch the appropriate pricing initiative and really get money out of it, knowing the current customer mix and understanding the purchase behaviour of visitors is key. Experience shows that not all companies succeed in implementation.
A water park in Northern Europe launched an annual pass at three times the price of a single ticket, with only the knowledge that the standard average number of visits to a water park was 1.2. Sales clearly hit the roof, but it destroyed the experience and the revenues. Indeed, a very quick “customer survey” at the entrance of the park later showed that 50% of the total attendance was already driven by people coming more than six times per year and that these people had found in the new product a very good way to save money... Such breakthrough product launches require detailed customer insight and financial modelling. Furthermore, international leisure companies should be aware that each destination has to face specific customer behaviours and that nothing can be “copy-pasted” without taking serious risks.
Far better results were achieved by another leisure company who sent free nominative invitations to targeted customer families. The free invitation was only given to one family member and it had to be used for specific dates only. The letter was packaged in a premium way. The promotion was thus creating a unique event for the family who had to balance the pain of losing this perishable present with the cost for all other entrance tickets. On-site customer surveys helped to measure the impacts and to calibrate future promotion campaigns.
In conclusion, promotions can be a very powerful tool to stimulate the demand, but only on the conditions that the behaviour of customers is carefully analysed and that the promotion is kept simple. It is really important to focus on key offers and not to blur customer perception with very different messages coming from hundreds of small tactical actions. Otherwise, all promotion efficiency is jeopardised and customer trust is gone.
3. The constant adaptation of price offers to fully capture the willingness to pay of each customer segment... while keeping your offer simple and clear to everyone
Who is it that goes to Disneyland Resort Paris? Possible answers include families wanting activities that appeal to the whole group, those that are seeking thrills from the more extreme rides and those that buy into the fantasy aspect of the Disney characters. The customer base is thus very wide and within it there are very different income profiles, ranging from famous international soccer players to teenagers of Paris suburbs.
Therefore, one of the most important price management challenges is to develop and price all the offers that will capture the full willingness to pay of each customer segment.
Building and displaying a wide range of offers with increasing value and price levels are essential for two reasons. Firstly, it allows any customer to find an offer which corresponds to the price he is ready to pay. Secondly, it becomes easier to up-sell as you always have something slightly more attractive and expensive to put forward. To succeed, the value gaps between the price points must be really tangible, otherwise smart shoppers will systematically go for the less expensive offers.
For instance, seating categories are natural differentiators for sports events or concert tickets and allow the exploitation of different levels of willingness-to-pay. In the case of leisure parks, the differentiated range of offers is instead developed through additional activities like shows, food, beverages and merchandise. It is possible to have lunch in Disneyland Resort Paris from 9.95€ for a quick-service menu to a full experience with Princes and Princesses dancing around you for 55€ per person. Similarly, one can exit the park with a simple Disney pen as a souvenir or a Chrystal Castle.
4. The temptation to make easy "on-site" profits... that can impact overall experience perception
Once a visitor is in a park, sports arena, or movie theatre complex, the temptation is high to leverage this captive audience with aggressive pricing. However, numerous surveys have shown that some exaggerated prices were clearly impacting the intention to visit again and to recommend to friends the activity or the destination.
Again, a deep understanding of customer purchasing behaviour will help to limit the negative impacts. On-site visceral factors come into play and customers are ready to make additional expenses they may not have been prepared to before coming. But their price sensitivity is likely to increase if they perceive a loss of freedom. It is important to understand what is accepted by the customer and what is not.
Generally speaking, all the “need” expenses are very sensitive, while the “chosen” expenses are less problematic. For “need” expenses, a progressive range of value and price levels can reduce the negative perception. Consequently, theme parks should be able to provide low price alternative offers for lunch, but can try to extract more from the merchandising products.
Taking the right pricing decisions towards on-site spending requires having a global pricing team optimising those decisions, which is often not the case with BU centric price optimisations.
Conclusion
Pricing is a key element of the revenue optimisation for theme parks and leisure activities. It can only be achieved with intensive customer surveys and strong analytics. Pricing in leisure parks is really fun and exciting, but can turn to a nightmare if you do not have the proper tools and knowledge.
Wednesday, July 14, 2010
World Cup Pricing Questions
Here is an interesting article I came across recently which argues that FIFA needs to re-analyze their pricing structure in order to not alienate the multitudes of fans worldwide who cannot afford the expense of attending soccer's greatest event. This is especially evident when the event is held in countries with large lower income populations, such as South Africa in 2010, or the next host nation: Brazil in 2014.
However, when you analyze the costs involved with the Cup - preparation fees, winnings, compensations for player involvement, etc - it presents an interesting scenario from a pricing perspective. How do you host a global tournament (four years in the making) and simultaneously accommodate the ideal price points of all potential attendees? Thoughts?
From ESPN: (Read the full article here)
However, when you analyze the costs involved with the Cup - preparation fees, winnings, compensations for player involvement, etc - it presents an interesting scenario from a pricing perspective. How do you host a global tournament (four years in the making) and simultaneously accommodate the ideal price points of all potential attendees? Thoughts?
From ESPN: (Read the full article here)
FIFA has been accused of putting money first and pricing out ordinary fans after many matches at the World Cup failed to sell out.
Kevin Miles, the Football Supporters' Federation's director of international affairs, told the Sunday Mirror that FIFA must review the costs of tickets and accommodation before the next World Cup in Brazil.
"Overall, it was a rewarding experience for those lucky enough to be able to afford it," Miles said. "But a World Cup being played out in front of so many empty seats was a cardinal sin. The pricing structure excluded large sections of the local population. They have to learn the lessons from South Africa before the next World Cup in Brazil in four years.
"It will require a different mindset as to how they deal with the tickets and accommodation pricing structure that is fixed at too high a level for many grass-roots fans of the game, especially when you take the tournament to a developing nation.
"FIFA must learn the lessons about pricing quickly. They must ensure that we have far fewer empty seats and more enthusiastic Brazilian fans in the stadia. FIFA need to ensure locals and visitors alike are not deterred by high prices."
Miles, like many others, has reservations about the role of MATCH, the agency which exclusively handles World Cup ticketing and corporate hospitality rights. It has been lambasted for pricing out fans and has said it will use Brazil to make up losses from South Africa.
"It's beyond belief that an organisation that has exclusive rights to sell tickets for a World Cup managed to make a loss. But FIFA needs to look at this whole area again to ensure future tournaments are more fan-friendly."
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