Product People Who Price Earn More (and other interesting findings)
Pragmatic gave me access to the raw data to find anything interesting in the world of pricing. Here is blog number 1.
Over 2000 people in product teams filled out our survey. I was specifically interested in the answer to the question “Which of the following business activities are your responsibility? Check all that apply: setting and maintaining pricing”. 757 out of 2087 product people claimed this was one of their responsibilities. This was 36%.
What does the data say about these 36%? As we go through the other characteristics that had possibly interesting information, I will give you the percentage that claimed yes to this category. Anything significantly over 36% indicates there’s a tendency for that attribute to be correlated with managing pricing.
For example, gender. 1336 respondents claimed to be male and 534 of them managed pricing. 40% of males manage pricing. The data showed 29% of females managed pricing. Hence, being male is correlated with pricing. (I’m not making any guesses as to causality on this one.)
Age is very highly correlated with pricing responsibility. The percentage went up with every age group up to 64 years old. 18-24 was 25%. 55-64 was 50%. Interestingly the only decrease is the age group 65+ which only had 33%.
Experience in product management or product marketing was similar to age with a continual increase in pricing responsibility as they gain more experience. Less than 1 year of experience showed 24% while greater than 15 years showed 47%.
However, longevity in current role doesn’t seem to be correlated at all with all categories providing similar responses.
Role within the department was also highly correlated. The three choices were individual contributor, department head and executive. They had responses of 31%, 42%, and 56% respectively.
The more direct reports a product person has, the more likely they manage pricing. This increase directly with the number of direct reports with 0 having 32% and 10+ direct reports showing 54%. Of course this one should be correlated with the role as well.
Interestingly, education didn’t seem to impact whether or not someone prices. The one exception was that people with some education toward a masters degree (i.e. started and have not finished) have the lowest participation with pricing at 31%.
And the one you’re most curious about, Salary. Yes, it has a great correlation with pricing responsibility. Of people who make less than $60K, only 22% do pricing. 65% of product people who make over $200K have pricing responsibility. Hard to say which is the cause, but I’d be working to earn pricing responsibility.
OK, nice data, but what does it all mean? Here’s my take on it. The most senior product people are the ones who are involved in pricing. Of course this is correlated with age and the number of direct reports. Pricing appears to be a responsibility that is given most often to product team members who have the most respect.
HOWEVER, I think ALL product people are involved with pricing. Creating value is the most important part of our job before we put a price on it. Product people must create value. They must know how much value they created. Product people who are clear about these two things will be more likely to earn the responsibility of setting and maintaining prices.
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