Paul Charlton, Owner & Founder of The Pricing Factory

Cool Pricing Play, n. Usually asked for by a CEO or GM who doesn’t realize – or doesn’t want to admit –  that they are not doing pricing basics right. Or maybe they just don’t want to invest the time or energy into getting the basics right. A bit of a tell.

But allow me to tell you one fact: if you don’t get the basics right, you’ll never have an impactful or successful “cool pricing playâ€. Ever.

Previously from Paul’s Pricing Dictionary:

Bad Selling, adj.+gen. Bad Selling is somehow always absent as an option in Bid-Loss analysis. But if there ever was a Bid-Win analysis, I’m sure that Good Selling would somehow get 100% of the credit. Of this I feel absolutely sure.

Big Data, n. pl. but s. or pl. in constr., often attrib. It doesn’t matter how big your data is, how big your cube is. It’s how much insight you get from it that counts. And how quickly.

Currency, n. 1) The first refuge of the scoundrel when there is the slightest adverse movement in exchange rates to excuse crap business performance. This is a phenomenon which miraculously disappears just as soon as there is a beneficial shift in exchange rates. 2) Usually a key ingredient in a cocktail beloved of CEOs called “The Perfect Storm” to explain away a quarter of exceptional – and to everyone except them – entirely predictable under-performance (recipe available under NDA) 3) The perfect excuse for a list price increase and just one of the many reasons why list prices matter.

Defuddle, vb. What your Pricing Team does for you if you are befuddled, particularly on matters of channel demarcation, deal registration and sincerity.

Happiness, n. A feeling of well-being which is directly proportional to your gross margin %.

Haste, n. Hurry, rush. Price in haste, re-price at leisure. (Adapt., William Congreve, The Old Batchelor, 1693)

Insight, n. What your Pricing Team should be providing you with. Insight from your Pricing Team should come in two distinct flavors:

Margin Recovery Plan, n. A work of complete fiction written by Sales in the hope that no-one else will read it and, most of all, the author will not be held to account for its contents. Ever.

Meta Price Analysis Value (MPAV), n. Analysis which determines how much and what type of price analysis needs to be done in order to create insights which the can help drive the business towards its goals.

It’s not how much analysis you do that matters; nor is it how much data you can churn that’s going to impress people. It’s actually how little you need to do, how quick it is, how repeatable and intelligible the analysis is, and most importantly – pause – how much insight you create in the process:

Meta Price Analysis Value = ∫{Insight, Speed, Repeatability, Intelligibility / Effort}

New Product Insanity (NPI), n. Thinking that your next New Product will fix all your business problems when it has never done so in the past. Why? Because you didn’t fix your historic pricing problems. New product, old pricing problems. You know it. But you’re shareholders don’t. Not yet. But they will find out. Sooner or later. One way or another.

Organizational Memory, n. The Pricing Team. The Pricing Team remembers what worked and what didn’t work. It has a longer data retention period than anyone other than Tax. And unlike Finance, well, let’s just say, they are unlike Finance. The Pricing Team just knows where the data (coll. n. s.) is and lots, lots more. I thought I would list how much more but it started getting creepy so I stopped. You’re welcome.

Panic, n. If your Pricing Team isn’t panicking, don’t panic. But before you totally relax, please have your Pricing Team’s Pricing Intelligence checked out because there is a reason why they might not be panicking. However if the Pricing Team is panicking, then you should really feel free to panic.

Patience, n. Something pricing folks have in abundance, but don’t you worry, I’ll talk to your successor about it if you don’t have the time, inclination or courage to do so.

Prevarication, n. Pricing problems. The longer you leave them, the worse they get, the more money you leave on the table, the more they cost to fix. Just saying.

Price, n. Value, plus a reasonable sum for wear and tear of conscience in demanding it. (qv, Ambrose Bierce, The Enlarged Devil’s Dictionary)

Pricing, v.tr. 1) Sales hears “discounting”, 2) Product Group hears “list pricing”. So when someone says, Houston, I’ve got a pricing problem, the first thing to do is work out is this a list pricing problem or a discounting problem. Best not to use the word “pricing” standalone unless you want to waste everyone’s time.

Pricing Drag, n. When your history of bad pricing and your disinclination to fix it creates a incessant drag on your business performance, your ROIC & consequently your stock price.

Pricing Intelligence, n. The first thing you lose when you allow your Pricing Team to break up. The second thing? Well, you shouldn’t have allowed your Pricing Team to break-up, otherwise you would have known what that was. (Your Pricing Team would have briefed you).

Strategic Deal, n. deal struck at a massively negative gross margin by CxO or Executive Sponsor, usually without any hope of margin recovery. See Margin Recovery Plan.

Uncompetitive Products Costs, n.pl. The old lie 50% of the time; an uncomfortable truth for the other 50. But how can you tell whether your product costs are competitive or not? Your Pricing Team should be protecting Sales from uncompetitive product costs while defending the Product Group against false assertions from Sales that the products are not cost competitive, and, at the same time – who said this was going to be easy? – protect the corporation from bullshit excuses from both.

Value, n. or adj.  Often mistaken to mean “cheapest†or “budget†by consumers, marketing people, and – sigh – product managers of Intel/X86-based products; while simultaneously mistaken by others who make proprietary servers to mean “expensiveâ€. Rather ironically, neither represent value in the true sense of the word.

Value Server, n. Misnomer. Hist. Very high list price, very high discount product wrapped up with some sort of an assumption that you’ll also pay through the nose for o/s’s, apps, storage and services. Not a value server at all in the true economic sense of the word “value”. For a true value server with a reliable processor, investment protection in innovation within industry standards, and a product roadmap which actually exists, see, rather ironically, “Volume Server.”

• Incapable of acting as a coffee cup holder: for superior coffee-cup holding – and many other – capabilities of X86 servers – with forward and reverse coffee-cup compatibility – please refer to “Volume Serverâ€.
• Sometimes mistakenly referred to as a “proper computer†by Enterprise EVPs. For an “improper server†presumably I would have to refer you to – again – “Volume Serverâ€.
• Also see under “Failed Pricing Strategies”. No, the technology and ecosystem aren’t the only problems. High list, high discount? Just cruising for a bruising. Forever exposed to those who like to get their retaliation in first. Just saying.

Volume Server, n. More specifically, a volume server is a high volume server simply because it is good value for money. Should really be called a value server because value is the cause and volume the symptom. But that would be far too straightforward and understandable. See “Value Serverâ€.