Last week, I attended the PPS Spring Conference in Chicago with some of our team—and a few hundred members of the pricing community. It’s been years since an in-person conference for this group, and as you can imagine, refreshing to be able to talk through challenges face to face.
Many of us as pricers are dealing with similar issues, and in a more magnified way than we’ve seen in our careers. I wanted to address some of the themes that came through in our workshop, as well as my conversations throughout the week.
1. I’ll take “Volatility” for $1000, Alex. Supply chain. Labor issues and shortages. Oh – inflation? That, too. With all of these economic indicators – there was a lot of focus on the volatility of today’s markets. Turns out customers are smarter than we give them credit for, and they know that price increases are inevitable. However, navigating through unpredictability can be daunting. It requires having the right metrics in place so price changes can be implemented at the right time. It also requires an additional level of transparency so both customers and sales teams clearly understand the rationale behind any upcoming changes.
2. Will the real reliable data source please stand up? Access to higher volumes of real time data is creating more issues than clarity for a lot of organizations. With medium to large sized organizations, there are so many different sources of data and each one can seemingly provide endless uncertainty. Internally, it’s hard to agree on basic things like, “how much revenue are we getting from a certain customer or product segment?” And without that data, how do you price? From our point of view, you want to be able to understand the value your product provides. Quantifying that value can be used as the basis for pricing. Historical data can and should be used to corroborate and calibrate price points. As long as this data is directionally accurate, the right price points can identified. Ensure any reporting you use has a clear intended outcome or action. Anything outside of that is simply a massive drain of resources.
3. The need for speed. Nothing slows down a pricing project (tip: never call it that) more than trying to drive inter-departmental alignment through an overload of data, process, and complex information. It’s important to have the right systems and processes in place to make price changes effectively and efficiently. Make sure you have processes that involve cross-functional teams to make decisions quickly. Organizations lose up to 40% of their pipeline deals by waiting to take action. Taking a risk is often less costly than taking no action at all.
As these topics develop and evolve, we’ll continue to publish our perspectives. Thank you to all attendees I had the opportunity to interact with over the course of the week and thank you to PPS for the platform to collaborate and move the community forward in this way.
