Episode #0029 - What are the options for a business pricing transformation?

In today's episode of Pricing College - we discuss the broad options available to a company who is considering a pricing transformation for their business.

The broad options available to any company generally include:

A - engage pricing consultants to advise your business

B - employ a proven pricing manager to implement change internally

C - utilise a pricing software system

And the winner is.........

 

Today we're going to talk about options for you if you're going through a price improvement project or you're thinking about improving or changing prices and you just want to know, what the options are out there? What should you do next? So just to start on that, I think Aidan I would like to give you the three examples and the first one would be consulting, you can invest in external consultants to come in and set up a new pricing system for you. Consultancies like top tier ones like McKinsey, Bain, Boston's and Simon Kutcher. People like that can come into the business, they can do some diagnostics of your current pricing situation and then advise on what you need to do next, what strategy would suit your business and industry, and then potentially think about the analytics, and the people required, but they won't necessarily do all the pricing for you, they'll be more advisory.

A second option, and obviously, all these options have to be looked at from your own corporate requirements where you're starting from, you have to play the ball from where it lies as the old golf says. A second option would be to build your internal resource. Do you have a pricing department right now? Do you have pricing expertise? What you can do rather than bring an expert advisory on a freelance or contract basis, you can employ an expert in your own business, and then build that department, grow that business and seek to internalise that expertise in the company. They will likely require more resources, it may not suit every budget etc, but maybe in the longer term, that will help internalise that and build relationships and stakeholder contacts inside the company. So that's option two.

Option three would be to buy a pricing system or software to install in the business to then algorithmically price your goods, services and products. For instance, you could use software from price intelligently for the SAAS community or technology community, you could use a Zilliant or PROS for B2B and B2C pricing needs, they're very popular and quite expensive pricing software, but they ultimately implement dynamic pricing in B2B and B2C settings and to some degree customised pricing to suit your business.

That's right, so those are the three broad categories, which one is most appropriate and maybe it's not just one, maybe it's a mixture of all three that are appropriate to your business. But I think when you start to look at a transformation project, you should be aware of the options available, the cost-benefit analysis of what it would cost upfront? What will cost on an ongoing basis? What immediate short term and medium-term and what ongoing benefits will you get from it? and it's only then that you can make the right choice or the best choice.

I agree and then underneath that, you can think about suitable change management approaches just to underpin each option because you have to think about each option just not in terms of what you're buying today to fix a specific pricing issue that you have now but thinking about building that sustainable pricing capability. As Aidan says, that could be a mixture of all three, or just one so it's just getting that diagnostic right so you know where to take the next step but yes, those are your options and I hope that's helped.