Last week, I made the hike to Amsterdam for the Pricing Strategy World Summit hosted by Ardensi. Our Head of Pricing Jeet Mukherjee gave a keynote on the Future of Pricing (more on that topic soon), and we were eager to see how US challenges were impacting European markets.
Turns out, all the headwinds we are seeing in the US are impacting businesses globally in similar ways. Below are the topics that stood out most.
Hello darkness, my old friend.
Leaders are thinking differently about their businesses given a possible recession. Many are going on a spending freeze. It’s easy to get pricing wrong right now, especially with inflation continuing to surge. But customers are smart—they know everyone is increasing prices. The game becomes who can increase prices the least, while gaining market share? As noted by Alberto Rapaport from Fedrigoni Group, in some cases this could look like implementing a temporary fee instead of a price increase (e.g. for freight or energy costs).
Recommendation: In times of volatility, focus on providing predictability for the customer. Increase transparency wherever possible.
Whose math is bigger?
With reporting and analytics, there seems to be endless ways to cut data depending on what you are hoping to find. (Yes, I said it.) Your team’s energy should be spent on identifying insights to drive action. Otherwise, you’ll be cutting data for weeks and wasting precious time debating what is driving a dip in margin.
It’s natural to study the data in retrospect, but how can you use it to take forward-looking insights to leadership? Focus on what will impact profitability, and make sure you don’t lose people in the weeds of detailed analytics.
Recommendation: Keep it simple! Set up all reporting to trigger an action. If it doesn’t trigger a clear action, stop doing it.
Remember who you are.
Look at the business from the bigger picture of profitability. Maybe valuable resources can be saved from accounts that are draining time and energy without much return. Perhaps there’s an opportunity for your business to start providing services in addition to their products. You have a massive opportunity to contribute to the success of the company—for some pricers, this means stepping out of your analyst box and influencing the broader commercial team to make difficult decisions.
Recommendation: Make a 2x2 matrix and plot customers based on profitability and company resources spent on that account. Bring the insights to leadership. Firing unprofitable customers often needs to come from the CEO, and these insights prompt critical action to help save company time when you need it most.
The bottom line? One thing is clear: between inflation, labor challenges, and supply chain issues, many of us are in the same boat. Now is the time to make your dollars count and contribute insights to the business when it needs you most. Keep the outcome in the foreground: profitability or bust.
See you in September at the USA Summit in Houston.
