Managing a Pricing Portfolio
I’ve been a pricing practitioner for many years now, with experience in several industries on the individual contributor and manager level. It has always allowed me to dive into the business and influence revenue in a positive way by becoming engaged in the business and seeking out opportunities for price/process/strategy improvement.
An opportunity is shaping up to move into a pricing director role, with responsibility for several business units. These all operate with their own management, in different markets, with different products and pricing. If this opportunity materializes, I will have less time to dive in and understand the business firsthand, which would be a big change. A portfolio of situations will present itself to me. How do I manage this portfolio? What criteria should I understand about the market and the pricing strategies, processes and results to get a lay of the land? How should I prioritize?
First, congratulations. Obviously, you’ve done a great job as an individual contributor. You’ve had a chance to implement several pricing techniques. Now things will change.
As director of pricing, you are more of a consultant, coach and educator to different departments within your company. In this role, let me share a few lessons that served me well.
- Nobody wants you to tell them what to do.
You don’t have any power. The business units make all of the decisions. You need to work with each business unit with an attitude of service. How can you help them be more successful? Often pricing teams take the lead on collecting and processing data like win/loss analysis or scatterplots. Show other departments how to use these, but don’t be upset if they don’t. You are an asset to them, not their boss.
- Help everyone else win.
Have lots of meetings. Ask them what their goals are. What issues do they have with pricing? How does it affect their job or get in the way of achieving their goals? Don’t defend anything. Don’t promise anything. Be curious. You are there to listen. The more you listen and demonstrate that you understand their issues, the more they will trust you. Eventually, you will make suggestions. Show how these new ideas can help each person get closer to their goals.
- Start with small wins.
A lot of ideas will come from these meetings. Some people may even ask you for help. Look for the low hanging fruit where some easy price adjustments should have big impact. Then start to pick up some bigger projects. You should spend a lot of time helping business units think through the value that their products deliver to customers. Maybe you can go on win/loss calls with them to help understand how the market perceives your value.
- Take on a BIG idea.
After you’ve spent six months to a year working on the first three hints, you can swing for the fences. During all of your conversations, you have likely run into a big roadblock inside the company. It may be the system’s ability to quote, or segment prices, or the way the company handles contracts with huge customers or the interface with the distribution channel. To fix this roadblock, it will likely affect almost every department in the company, including every business unit, the sales organization, customer support and especially finance.
Have more meetings with people in the departments that will be affected. Listen to everyone’s concerns. Brainstorm solutions with the different departments. Once you have what you believe is the best solution, you need to sell it department by department, person by person.
Do NOT have a huge meeting where you present your proposal. It won’t go well. One person at a time. After you have buy-in from most people, then approach the CEO to fund this project.
This is a multi-year project, but it’s so worth it. It will have a huge impact on the company and on your career. You will transform from being a director of pricing to a leader in the company.
I’m sure there are many more hints. I’d love to hear from any readers on what they have done or seen work well.
Good luck and keep me informed.
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