I told an old friend who had been a colleague of mine and had worked closely me with that “I was pleased to have been able to sort out the pricing for my client from “end-to-endâ€â€, and he replied that he had no idea what “end-to-end pricing†meant. Which made me think, if he doesn’t know what I meant, who does?
The purpose of the paper is to help pricing professionals explain to non-pricing executives and managers not only what “end-to-end pricing†is in a simplified, integrated 10-step program, but also articulate and visualize what pricing professionals create. So I am defining – for the purpose of this exercise – that the objectives of end-to-end pricing are to:
- create competitive list prices and discount policies and guidelines which:
- allow sales to be more efficient and focus on selling the value of the product …
- … rather being margin managers or, even worse, sellers of deals for internal approval,
- consistently apply your pricing strategy and price list positioning strategy,
- align with your marketing, sales comp and financial plans;
- All of which can be refreshed with a sustainable, efficient and repeatable process.
This is applicable to pretty much all B-2-B from those with one product to those with hundreds of thousands; small to large; regional to global; new to old; and particularly high tech.
If you like it’s like building a factory – a pricing factory – for prices & pricing processes, discounting policies and sales tools.
Step 1 – Competitive Analysis
I think this is the piece that everyone knows that pricing folks do – that is in between putting price tags on PCs in Best Buy as the parent of one of my daughter’s friends thought – but there are lots of opportunities for pratfalls. And I’ve seen some pratfalls in my time ….
The analysis needs to make sense and be easily understandable.
If it doesn’t instinctively make sense to your sales people, then there’s probably something wrong with it … and you’ll never be able to transform the analysis into a sales tool for communicating value to your customers.
The methodology and format needs to be consistent and repeatable … and timely.
If I didn’t need to mention any of this, obviously I wouldn’t.
Ah, and the link between qualitative and quantitative analysis is the valuation/$-ization of those previously qualitative, subjective valuations …. everyone’s favorite topic. But for a lot of businesses, those valuations are the reason – not a reason, the reason – why the business exists, or is able to command a premium. So you gotta learn to love them … even if you don’t like them.
Extract from “10 Steps to Creating End-to-End Pricing” in April 2016 edition of The Pricing Advisor, authored by Paul Charlton of The Pricing Factory®. Read the paper.
- The Pricing Advisor is the monthly publication of the Professional Pricing Society, The World’s Leading Association Dedicated to Pricing Management.
- This is the second article of Paul’s that the Professional Pricing Society has published. Read the paper in slideshow format …..
- Any questions, please contact [email protected]
