The document discusses best practices for engaging pricing consultants to achieve mutually successful project outcomes. It provides examples of pricing consulting projects, outlines factors for success like clear roles and senior management support, and shares insights from a practitioner survey. The survey found regular progress reporting and a pre-determined implementation plan were critical, while ownership and follow-through by the client were also important.

1. The Pricing Consultant “Dance”: Achieving Mutually Successful Project Results Professional Pricing Society Conference Fall 2010 San Francisco, CA Presented by: Alan Hollander and Peter Maniscalco

2. Agenda Introductory Case Study Session Objectives Consulting Firm Business Models Role and Expectation Management Key Questions for Consideration Project Management “101” Principles Pricing Practitioner Survey Results & Takeaways

3. Case Study A Semiconductor manufacturer Major account plan and strategy for multi-year contract renewal supported by Regional Sales Executive and Business Unit GM Consulting team utilized to help develop account level negotiation strategy with value based selling approach (understand cost to serve, customer value, competitive options) Sales team achieved $10+ million increase over prior contract pricing on large $50 million electronics account Led to establishment of pricing function to assist in large account management (strategy, pricing, negotiation) All “strategic” accounts required utilize same process for major customers

4. Case Study B Communications Solution Provider (hardware and software) Product price migration program to incent customer upgrades supported by Business Unit GM and VP of Product Management Consulting group commissioned to analyze and recommend the most effective price program for moving installed base to latest release 4-5 full time internal client team resources (product, pricing, marketing) utilized Program launched resulting in <$1million in upgrade revenue over 9 months and <1000 upgrade licenses (installed base $70+ mil) Sales confusion caused due to overlapping promotions and unclear value proposition Other critical product development and launch projects delayed due to lack of resources Question: “Why were there such completely different outcomes?” :

5. Objectives & Outcomes for Today’s Session After today’s presentation you will be able to: Understand consulting firms’ key motivators (what makes them tick!) Articulate the most/least effective roles and/or scenarios for engaging with a pricing consulting firm. Determine key/critical project management factors to set yourself up for success on a project. Create a ‘mental checklist ‘of key questions to prepare for internal discussion. Utilize perspectives from other pricing practitioners to help achieve mutually successful project outcomes

6. Consulting Firm Business Model Objective Benefit/Outcome Leverage resources (e.g. fixed assets) High analyst/consultant utilization (e.g. billable time) drives revenue Enables more scale in project coverage/quality control by partners (e.g. # billable projects) Establish/Maintain Client Executive Relationships Generates more opportunities for follow on business with current client Drives opportunities to expand across divisions or business units within same company Ensure Market Reputation Quality (e.g. referrals) Customer testimonials and/or referrals aid in acquiring new clients Possible input to annual price changes (e.g. billable rates) Market messaging and differentiation through case studies/ success stories

7. Role Definition & Expectation Management Setting the right expectations starts by collective assessment of the “best fit” role for both consultants and practitioners in an engagement Roles for consultants which tend to work well: Sounding board for major initiatives (outside perspective) Best practices expert and advisor (desired/future state) Capabilities development & expansion (data, systems, processes) Strategic pricing initiative roadmap development (e.g. 3-5 years) Roles that tend not work for anyone: Extension of internal execution team (temp implementation resource) De facto Pricing lead / Interface to senior management (exec communication) Project/program management (internal coordination) Outsourced analytical team

8. Key Considerations Before Starting the “Dance” Is the project intended to address an acute tactical pricing problem or a broad strategic issue? Are there differing views of the problem from key functions (sales, marketing, finance)? Who is the project sponsor or owner? Who owns the end result? What function and position do they occupy in the organization? Do you plan to use a virtual team comprised of different functions, dedicated pricing team or a mix? Are the number of resources sufficient? What is the planned cadence of communication? Are executive “check - ins” included? How will issue escalation and resolution handled? What is a realistic vs. aggressive timeline, including execution, to achieve the desired results or outcomes (target vs. stretch)?

9. Project Management “101” – Planning for Success Checklist Criteria LOW SUCCESS POTENTIAL HIGH Consultant Role Process Execution Program Mgt Targeted support/expert Strategic solution partner Problem Definition Fix our price! We need a strategy! End period discounts (acute) List price setting (structural) Strategic pricing capability “map” Functional Alignment Single function Internally facing view only Externally facing view only Cross functional Seniority Level Alignment Grassroots / Functional mgrs Division / P&L specific Sr. level mgt review forum CFO, CEO, COO Resource Availability Limited-to-none Virtual team of SMEs Existing pricing team Dedicated cross functional team Progress/Result Measurement As needed – when fires emerge Milestone driven Regular cadence review with work team Formal readout with sponsors & team Execution Plan To be determined in future Post completion handoff to Ops group Pre-determined implementation team Change mgt / training team

10. Pricing Practitioner Web Survey Results What aspects of the engagement did you feel were handled/ run best? (Select Top 3) What aspects did you feel were not run well and needed the most improvement ? (Select top 3) How would you rate the following aspects of the project on a scale of 1-10? (1 being lowest/worst and 10 being highest/ best) Avg Rating 6.4 7.6 6.5 6.6 7.0 7.0 6.4

11. Pricing Practitioner Web Survey Results Top 2 Box =75% Were the expected results or enhancements both achieved AND measured? How would you rate the pricing project in terms of its direct financial or operational impact to your company?

12. Pricing Practitioner Web Survey Results Avg =3.24 How would you rate the overall personal satisfaction from this last consulting project with 5 being extremely satisfied and 1 being completely dissatisfied? How likely are you to recommend hiring of or working with pricing consultants to others? Top 2 Box =68%

13. Fellow Practitioner Insights/ Takeaways “ You need to have a clearly defined process roadmap as a guide. You need to ensure that the business and consultants are on the same page.” “… . ensure ownership stays with you at all times with regular direction updates as well as a sign off on the problem/project before their evaluation and findings work BEGINS “ “… .an internal person, if not crunching the numbers him or herself, [should] be intimately involved in some way with the analytics used to draw conclusions.” “ A strong internal team should be engaged through out the process to keep the project in the right direction, and at the end, to be able to translate the recommendation into actual implementation.”

14. Some Final Thoughts…. Assess internal needs, resource skill sets, pricing capability and expertise gaps against consultant capabilities and approach Onus is on the company and practitioner to proactively own, participate in, manage the project. Cannot defer everything to the consultant Implementation is responsibility of practitioner and company, not consultant. However the consultant must help develop the critical steps necessary and should be held accountable for understanding and incorporating potential political issues/ roadblocks into the execution plan Quality consulting project work is different from impactful project work, the difference lying in how the work is translated into action Bottom line is there must be a hand off between consultant and client for the project to be successfully executed which requires equal effort from both parties

15. THANK YOU! Contact information: Alan Hollander [email_address] 908-290-8347 (office) Peter Maniscalco [email_address] 484-947-6450