(Part 4) Where Are You on the Pricing Journey?

May 30, 2019 Team Zilliant

Introducing our Online Assessment Tool & Pricing Impact Benchmark

More than two decades of research, product innovation and hands-on work with clients across many industries has taught us that the pricing discipline tends to follow a distinct path. That path can be broken down into four stages, each with specific challenges and opportunities. We believe it’s important to nail down where your organization is on the path, so you can focus on solving problems now while planning for the future you want.

That’s why Zilliant offers a fast, free, self-service online assessment tool. Simply answer a few questions about your organization’s pricing practices to receive a full current state report with recommendations for instant improvement and long-term growth.

You took the assessment and discovered you’re at Stage 4 – Optimized. You’re reaping the powerful benefits of AI and machine learning to deliver fair, profitable prices in an automated fashion. You’ve integrated outside data to achieve market-driven pricing and analytics, enabling a proactive, predictive approach that is vital to the business. In short, you’ve reached the pricing summit, where few have gone before. But before you go resting on those laurels, remember that with great power comes great responsibility. Even at the Optimized stage, there are difficult institutional and cultural waters to navigate. 

Now what?

All of your efforts to this point have been leading to this: the ability to deliver intelligent, market-ready prices and predictive pricing data to sales and management teams precisely when they need it. AI engines and advanced technology have made this all a reality. The proverbial horse has been led to water. But they still must drink in all of your shiny, optimized prices. Buy-in and adoption of prices by sales is just as crucial here as it was in the Managed stage. 

In many organizations the sales reps hold a great deal of power. Here’s a scenario we’ve come across more than a few times:

A top sales rep at a manufacturer has been managing one of the most important customer relationships for 25 years. This rep has earned some autonomy and can credibly argue they know the customer better than any man or machine. The AI guidance, informed by supplier costs, outside market data and predictive analytics, says it’s time to raise prices on various SKUs, but the rep won’t hear it. They claim the customer won’t go for a price hike and furthermore, it’s close to end-of-year and it wouldn’t be wise to upset the apple cart. 

It’s at this point that pricing needs to assert itself in its new-ish role as strategic partner to the business. You must gain buy-in by taking a holistic, long-term view of the situation. For instance, it may be tempting to let powerful reps do their thing, knowing they will retire soon. But what happens to that customer relationship when you send in a new, green rep with optimized prices that happen to be higher than what they’ve paid for years? The old rep you placated is on a beach, while you have a serious customer satisfaction problem on your hands, not to mention a scorned sales rep who has reason to distrust your prices.

Swift, decisive action backed by data can prevent this mess. Remind sales that these decisions are no longer being made arbitrarily. Give them justifications that they can be confident transparently relaying to their customers. The tools at your disposal help you justify your pricing changes to management, who can then mandate sales adoption in many cases.

An Optimized pricing organization got there by completely transforming itself over time, with operational leadership, sponsor, training and understanding that incorporating pricing optimization is a process not a project. That means, inevitably, other parts of the company need to change the way they do things. This will create (hopefully) healthy conflict. No operational team is an island, especially not one as integrated into the daily workflow as pricing. As a pricing manager you’re now capable of doing your job more effectively as you’ve traded in the stress of repetitive manual tasks for the high-class stress of fighting for the most effective business strategy. It’s a good problem to have, especially when your argument is back by AI-driven evidence that you’re confident in delivering.

Think you’ve made it to Stage 4? Take the Assessment to learn more about opportunities, challenges and next steps associated with reaching this hallowed tier.

Take the Online Assessment Now!

Click the links to review Stage 1-Manual, Stage 2-Managed and Stage 3-Automated

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Team Zilliant

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