You have been asked to evaluate and recommend changes to a pricing strategy that has been in…
You have been asked to evaluate and recommend changes to a pricing strategy that has been in place for almost two years. Several people in the business believe that it isn’t right, but they don’t know what needs to change.
You start by evaluating the structure of the pricing strategy, uncovering what data you have available to analyze current performance and collecting some recent contracts to review. Then you spend the next few weeks analyzing data to uncover areas of potential weakness. Based on the quantitative analysis and your experience in pricing, you develop a recommendation to make a few changes to the current strategy and present your findings.
You know your recommendations are sound and will improve revenue results; during the presentation, leaders even nod their heads in approval. Yet nothing changes. Everyone seems interested in the changes, but no one implements them. You’re faced with the three I’s: little Interest, Indifference and a culture of Inertia.
Pricing decisions require changes in multiple departments: Sales must change how it communicates price; marketing has to realign its value messaging; product may need to create new product versions; operations must make changes in the business systems; and finance may need to change the way it tracks performance. Perhaps it wasn’t considered worthwhile to invest any time in these changes. Worse, maybe your proposal was viewed as risky because of a potential loss of revenue if your recommendations were incorrect.
So how do you avoid getting struck down next time? Engage your colleagues in the process and collaborate with them at all stages of your work: when you develop your hypotheses, when you develop your analytical plan, during insight development and during recommendation development.
Think through both whom to collaborate with and why they are necessary:
Of course, collaborating with these groups can seem to slow down the process. But you need to capture information from each group and integrate it into your decision-making. Sales can provide competitive intelligence, marketing can share market research, product can offer industry benchmarks, and operations can provide current capabilities and options
If possible, coordinate a workshop for members of this cross-functional group. The objective is to encourage them to become vested in problem-solving and, ultimately, to develop recommendations. You may be surprised at what you learn when you ask everyone to interpret the data. Diverse viewpoints can be helpful when developing and assessing the pros and cons of different ideas. Each member brings a unique perspective and alternative solutions, and you can set expectations for success as a group.
If you can’t get the group together, check in with each person before making final decisions. This ensures that you solicit their expertise and input as much as possible, minimize the potential for pushback, address questions that might arise and involve them in the decision-making process.
A significant number of pricing decisions are made by only one or two people in a business. By engaging different team members and incorporating their supporting data and insight, you’ll not only improve your chances for support and implementation, you’ll improve your odds of success. It’s simply better business to involve more stakeholders.
Holly Krafft leads two high-caliber teams—strategic pricing and customer analytics—that work across the five companies that are part of RELX Group. Before leading these teams, Holly led the development of pricing strategies for LexisNexis Europe/Canada/Latin America/Africa as the businesses migrated from print to online. Prior to that, Holly had roles in sales, sales management, marketing management and operational pricing at LexisNexis. Contact Holly at email@example.com.