Truce Or Friction


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Speech on improving pricing quality given at a Professional Pricing Society conference.

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Truce Or Friction

  1. 1. Professional Pricing Society October 2005 Truce or Friction: The Magic of Collaboration Linda Gorchels Director, E Di t Executive M k ti Curriculum ti Marketing C i l Fluno Center for Executive Education Wisconsin School of Business, UW-Madison Madison, WI USA Author of The Product Manager’s Handbook Goals for our time together Improve price management Control processes to reduce defects Rethink your collaborative efforts Break down the silos Deal with unavoidable ambiguity pp Redefine opportunities © Linda Gorchels © Linda Gorchels 2005 1
  2. 2. Professional Pricing Society October 2005 Pricing factors Price Inputs planning Outputs © Linda Gorchels Now let’s get to work on defects What is a pricing defect? Which input o output has the most c put or as t e ost variability, the biggest impact on corporate goals, and/or offers “low- hanging fruit” for fast improvement? Negotiated prices out of compliance with guidelines Deviations between invoiced and final price Specific customer or segment prices inconsistent with segmentation policies Declining ability to attain share goals © Linda Gorchels © Linda Gorchels 2005 2
  3. 3. Professional Pricing Society October 2005 Diagram the related process Receive RFP from customer Compile quotation information Submit proposal to customer Negotiate changes with customer Obtain approval for policy exceptions Submit final offer to customer © Linda Gorchels Establish improvement metrics Create a shared understanding of the expected deliverable here: improve the process to reduce the rate of price-related defects (as defined earlier). Gather, study and document data p about the overall process as well as the steps in the process. Build collaboration & cooperation © Linda Gorchels © Linda Gorchels 2005 3
  4. 4. Professional Pricing Society October 2005 Need to break through the walls Pricers feel they are the g guardians of Salespeople profitability Marketing feel they people feel “own” the they have customer objective relationship information © Linda Gorchels Practice “yes, and….” rather than “yes, but…” “ es b t ” © Linda Gorchels © Linda Gorchels 2005 4
  5. 5. Professional Pricing Society October 2005 Practice authentic conversation The ABC's of Authentic Conversation Author: Patricia Ryan Madsen Author: Susan Willett Bird © Linda Gorchels Find opportunities in ambiguity The very nature of customer experiences is changing, causing uncertainty in marketing strategy and pricing Look for challenges to “status quo” pricing Emerging markets Disruptive technologies Bottom-feeding © Linda Gorchels © Linda Gorchels 2005 5
  6. 6. Professional Pricing Society October 2005 And in the end … Pricing will always involve science and art – and both benefit from processes Pricers will need to collaboratively bridge between departmental goals in establishing and executing structure, strategies and policies A fresh perspective on ambiguous information may yield new insights into improved pricing © Linda Gorchels © Linda Gorchels 2005 6