Last week, Zilliant customers and partners from around the world met in Austin, TX for MindShare 2019. Our annual conference featured three days of pricing and sales growth workshops, deep dives, keynotes, networking and customer appreciation. Attendees heard how manufacturers were growing profits in the wake of tariffs, how distributors are innovating to keep pace with Amazon Business and much, much more. If you weren’t in our audience or are looking for key learnings from the conference content, here are our five takeaways from MindShare 2019.
Customer Leadership is Essential
Amongst the guiding principles of the Zilliant Customer Success approach are the following Benefit Drivers, the first of which is leadership.
Leadership is the most universal benefit driver and it touches all eight drivers. At each stage of the pricing journey and at different levels of the organization, leaders need to stay involved until a new normal is established. Most digital transformation efforts follow a familiar pattern in which early wins generate excitement but are quickly followed by a “valley of despair” as legacy processes are abandoned.
For organizations to push through and adopt a new paradigm, they need an executive sponsor to stay involved beyond initial implementation and cut across the organizational silos.
Start Where You Are
We heard from customers who began their journey with Zilliant at many different levels of pricing maturity. As discussed in a recent blog post, it’s easy to fall into a trap where you think your organization is not ready to get started, either because your data is bad, your processes are a mess or your organization is heavily decentralized.
Don’t be your own roadblock. There are quick wins to be had and those small victories have power. Start in one division or branch office with price management. The productivity gains and margin benefits of a single source of pricing truth will be self-evident in short order. Go forth and evangelize, backed by real proof points. Every company’s pricing roadmap is a little bit different, but there are tangible benefits at each stage, from Manual to Optimized. As one of our customers said on stage: “You don’t have to be in an ideal state to make money and have an impact with pricing. We’re constantly improving our processes and increasing adoption as we go.” The biggest threat is inaction.
Establish a Pricing Center of Excellence
You’ve gotten started, had some early success and can boast of executive sponsorship. Now the work really begins. It was a common theme throughout MindShare that a dedicated Pricing Center of Excellence is one key to building a culture of continuous improvement for large companies selling a diverse set of products through local branches. You can start out with the greatest pricing strategy the world has ever seen, but company culture eats strategy. A Center of Excellence takes feedback from the field and facilitates communication between teams, growing trust and enforcing price discipline to ensure consistent delivery of strategic value.
The Pricing CoE is data-driven and rational. One manufacturing customer who leads his company’s CoE said on stage, “Data takes the emotion out of pricing.” When sales reps are discounting too much, he’s able to point to a deal envelope for that specific customer segment that takes into account outside market data. His CoE doesn’t restrict sales from discounting, but reps know they will be held to account if the practice gets out of hand. The result is less conflict and more price justification.
Innovate or Die
Ian Heller, President & COO of Modern Distribution Management, had the crowd on the edge of its seat as he described the threats to distributors, who must innovate or die in an era of intense marketplace competition.
“Amazon has out-Graingered Grainger,” said Heller. “(Amazon) carries all your SKUs, delivers as well or better than you can, and reaches more customers than you can.”
But there’s hope for distributors, as long as they don’t do what retailers did when faced with a similar threat: nothing. Some of the steps Heller says distributors can take include:
- Be a tech leader: “AI is going to transform the industry as much as the Internet did.”
- Quantify your exposure to Amazon.
- “Build your moats!” Fortify your value added services that can’t be digitized.
Price Transformation is a Living Thing
“Strategic pricing is a discipline, not a project,” said a global food products distributor. “What we consider to be the ‘right price’ is what gives us a fair share of the value we help our customers create.” Since this value is always evolving, the Pricing Center of Excellence must always evolve and grow to meet the times. You can’t expect pricing to be a project that gets wrapped up in a bow and forgotten. The Zilliant tools that customers implement are the technology drivers of the pricing function within their enterprise.
The pricing function is deeply ingrained with sales, marketing, finance, inventory and other departments. The inputs are always changing as internal and external customers shift their demands. Pricing can be a strategic source of growth, but only if it’s treated with the care and attention of a living, breathing entity.
Thanks to all of our MindShare 2019 attendees for making it an impactful and entertaining event! Keep an eye out for details on MindShare 2020.
Contact us for help in building the business case that sets you on the path to success!