It’s no secret that businesses around the world are facing challenges of varying degrees as we all navigate the ‘new normal’ brought on by COVID-19. At Syncron, we’ve recently had several discussions with Professional Pricing Society’s Kevin Mitchell – conversations that are specific to the value optimized pricing can bring to manufacturers and suppliers in times of economic uncertainty.
Optimized pricing strategies offer a way to make a positive impact on business continuity, financial performance and customer loyalty. Below, we share highlights from our conversations with Kevin as we take a look at strategies and tactics teams can put in place in both the near- and long-term to achieve success:
Q: What are the short-, medium- and long-term effects of changing an organization’s pricing strategy?
A: In the short-term, there can be sizeable gains if teams have buy-in and good systems in place because they can attack the ‘low-hanging fruit.’ Unfortunately, there is also the risk of a change management battle, where inertia and resistance to change can be bottlenecks. In our experience, however, teams are sometimes surprised when they finally have visibility into that ‘low-hanging fruit’ that exists within their organization, which helps reduce reluctancy to change.
In the medium-term, refining processes, obtaining additional resources and internally advertising pricing wins helps others become not only aware of the power of optimized pricing, but also gets them excited to learn and do more. Gains will continue to increase as pilot programs evolve into more sophisticated pricing strategies.
Finally, in the long-term, optimized price management will become a part of company culture. For example, it will become instinctual for product development to think about the value of pricing early in the process, instead of saving a price decision for the end of a development cycle. The C-suite and senior management will be able to put specific dollar amounts to pricing initiatives as easily as they can quote sales and market share information.
Q: Will the ‘new normal’ change business as we know it today?
A: For today’s ‘new normal,’ impact is very dependent on industry. The last financial downturn a decade ago presented many so-called ‘disruptive’ companies that superseded large, established brands. The situation we are in due to COVID-19 will continue to move quickly and adaptability – via optimized pricing strategies – will be more paramount to success than ever.
Q: While the world is working remotely and seemingly has more time at home, are there professional development opportunities pricers should take to sharpen their skills during this time?
A: Continuous education is critical for any profession and for pricers specifically we recommend the following:
- Network virtually and connect to industry leaders and peers via social media. Many PPS members have been asking questions and discussing ideas on LinkedIn.
- Take the time to read a new book and learn more about specific issues within pricing. Some great books include Tim Smith’s Pricing Strategy: Setting Price Levels, Managing Price Discounts and Establishing Price Structures; Thomas Nagle’s The Strategies and Tactics of Pricing; Reed Holden and Mark Burton’s Pricing with Confidence; and Andreas Hinterhuber and Stephan Liozu’s Pricing Strategy Implementation.
- Join virtual events like webinars – which are now more common and popular than ever- to address the economic concerns surrounding the world today. PPS has several that are complimentary to its active members.
- Pursue professional certification as we answer the call to go above and beyond in our jobs to deliver increased value to company financial and operational performance.
For more information, visit Emerge, a new resource center that serves as a dynamic online space and provides the tools and resources needed to make a positive impact on business continuity, financial performance and customer loyalty.