Pricing Insight is Good, Action is Better

September 11, 2020 Mick Naughton

 

Zilliant’s Mick Naughton explains why pricing insight, powered by AI and data science, is only as valuable as the meaningful action it produces.  

 

One of my favorite movies of all time is "Tommy Boy." In, what is a classic scene between Tommy and Ray Zalinsky (played by Chris Farley and Dan Akroyd, respectively), Tommy has rubbed a car air freshener on himself because he is sweating and nervous. In that interaction, Tommy gets this piece of advice:  

 

[after Tommy has rubbed air freshener on himself] 

Ray Zalinsky Went a little heavy on the pine tree perfume there, kid? 

Tommy Sir, it's a taxicab air freshener. 

Ray Zalinsky Good, you've pinpointed it. Step two is washing it out 

 

While it might be a stretch to connect a comedy gem about a rookie salesperson out on the road to the challenges of complex B2B sales in an incredibly dynamic commercial environment, the message has value. Insight is good (it’s an air freshener), action is better (you’ve pinpointed it, now wash it off).  

 

I’ve had the opportunity to live in two distinct, yet intersected, worlds in the business universeFirst, the corporate sidewhere we analyzed data, developed forecasts, built reports and communicated with senior leadership to help guide their strategy. I’ve also been a field-based sales manager, running a team of sales professionals who were challenged to balance competing interests on a day-to-day basis in order to deliver on their quota and earn a living. 

 

As a wearer of both hats, there are a few themes I have recognized that come out of the dynamic tension between the folks in the “ivory tower” and those in the trenches. Each has an important point of view. The corporate teams have access to all the data, transactional history and results … and they usually have the executives’ ear. They can see the big picture; they can develop an analysis of patterns and predict trends that help guide activity. The field sellers that carry the bag spend each day face-to-face with customers, with maybe a tablet or a mobile phone at their disposal. They intimately understand what is important to their clients. They get immediate feedback daily and their livelihood depends on reacting appropriately.  

 

Both teams are critical to a business's success and both are generally convinced the other has no idea what they are talking aboutThe good news is we are living in an age where technology is catching up with the needs of traditional selling practices and there is a real opportunity to improve not only outcomes for capturing more revenue, but to improve the communication flow between field and corporate teams. The following are a few observations that I think if considered can help every organization.  

 

Make Sure the “Insights” Are in Fact Insightful!  

I realize this sounds like a Zen Buddhist koan (paradoxical riddle), but stick with me. Historically, analyzing data and developing insights took a lot of time. It required pulling information from multiple sources, scrubbing it and processing it through spreadsheets or SQL databases. Formulas were often built by hand and the output was not particularly user friendly. By the time it was broken up and sent to the folks who were the intended audience, what was meant to be actionable intelligence was often watered down  not specific enough to do anything with or just plain wrong. The advances that have been made over the past decade in terms of not only computing power, but the platforms designed to ingest and manipulate incredible amounts of data, have changed the effort spent on this facet of the process. No longer is the process so front-end loaded that there is not enough time to work with all the end consumers of this information to determine if what is being produced has any real value!  

Since the time spent on developing insights is reduced, more of the focus should now be spent validating the information, gathering specific feedback, adjusting the models and gathering more feedback. Or, even better, developing models that use AI and machine learning to ingest that feedback automatically and use an agile development approach to rapidly implement changes iterativelyEven with the advances that have been made, there a lot of organizations that still take the old approachinsights are handed down and there is no feedback loop developed to improve the output. Building that mechanism into the process changes marginally useful information into dynamic insight that can measurably move the needle. 

 

Deliver the Message to the Right Address  

 

Confession time: When I was working in the field managing a sales team, my inbox was a mess. It was filled with customer emails, notes from my boss, messages from my team, notices from HR on training that needed to be completed before the end of the month. It was a M.A.S.H. unit and I had to perform daily triage on what information lived and what died. Somewhere inside of this chaos were reports from my well-meaning pricing, marketing and sales analytics folks. I know they were well-meaning because I had been one of them. I knew they had taken a ton of time sending me reports that had good information. But the task of opening, digesting and then putting them into action usually was sacrificed at the altar of the relatable excuse, “I’m just too busy.” 

 

“Efficiency is doing things right; effectiveness is doing the right things.”  

Peter Drucker  

 

The changes in technology that have put mobile tools into the hands of teams have obviously changed the playing field. Work that could only be done from an office and a desktop can now be performed on a phone or a tablet. Tools for quoting and updating activity reports can be done in real time and the user experience gets better every single day. With these changes and the advancements in REST APIs comes the ability to put actionable intelligence at the fingertips of a sales team at precisely the right time to effect behavior.  

 

When quoting a customer do you want to go look at a separate pricing book to look up a recommended sell price? No! You want that price recommendation in your quoting application. When preparing for a customer call do you want to dig into a sales report on product churn or search your website to figure out what else to sell them? No! You want your tablet to tell you exactly what they should buy or have stopped buying and then connect you to detailed product information.   

 

If it Isn’t Measured it Likely Won’t BAdopted  

There are a lot of business maxims around this concept. I know I’m running the risk of over-leveraging Peter Drucker in this article, but he is famously quoted as saying, “you can’t manage, what you can’t measure.” This is a great truism, but the tools and technology that are available now can take that concept to a completely new level. Pushing out information and then measuring changes is critical to testing ideas and altering strategies. However, the problem with that model is that while you might get back signals that your insight is having an impact, it's difficult to separate which data was creating the change from the noise of what might have been happening organically.  

“Distinguishing the signal from the noise, requires both scientific knowledge and self-knowledge.”  

Nate Silver   

 

The tag line on this section would seem to suggest that if management doesn’t measure the behavior of the field team, the sellers are unlikely to adopt whatever policy or recommendation has been given. I’d like to take that concept and turn it on its head. Let’s walk through the concepts we have discussed above in which technology has allowed for: 

  • Better insights created more rapidly.
  • Insights that can be adjusted quickly to ensure they are relevant.
  • Insights delivered into the tools that are now being used precisely at the point where they are needed.
  • Insights delivered with a speed that makes them usable. 

So, what can be done to further improve on this cycle? Implement closed-loop reporting. At the point of insight consumption there should be mechanisms that allow the data consumers to provide feedback on why they did or did not use the insight provided. Did they win the business with the quote, or did they lose the business? Did the customer they were speaking with want the products recommendedMeasuring this feedback and then adopting changes to the models is what elevates good information into great insight.  

 

Conclusion  

 

Today’s news is tomorrow’s fish and chips paper. Meaning, there will always be advances and each will claim to be the next big thing. However, what has changed recently is less about a novel new management theory or a hot emerging market. It is a fundamental shift in the infrastructure of how quickly data can be managed and manipulated. Enormous volumes of information can be rapidly ingestedthe output of which can be delivered down to a very precise place in space and time. Organizations that can leverage automation and combine it with instinct have an opportunity to dramatically improve the effectiveness of their selling teams.  

 

Zilliant has been developing tools and using technology for more than 20 years with this focus. For each customer, we determine the right blend of data science and software for the specific challenge at hand, while our cloud-native architecture allows for infinite scalability and best-in-class processing speed. Finally, our REST APIs deliver that information into any CPQ, CRM, ERP or eCommerce application for instant usability.  

 

The speed, accuracy and relevance of the prices delivered thanks to this data science-driven corporate/field collaboration produces a consistent positive impact on a B2B organization’s top- and bottom-line. As Tommy would say, “That’s gonna leave a mark!” 

 

If you’re interested in how Zilliant can help your company turn insights into action, send me an email at michael.naughton@Zilliant.com or connect with me on LinkedIn. 

About the Author

Mick Naughton, M.S., MBA, is a sales director at Zilliant where he helps global B2B companies realize improved financial performance using advanced technology. Prior to joining Zilliant Mick spent 20 years in the life sciences industry in a variety of pricing, sales and technology roles.

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