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2007
Pricing Excellence Summit
Roadmap to
Pricing Excellence
April 22-24, 2007, Intercontinental Hotel—Houston,
TX
The annual Pricing Excellence Summit is an event
focused on helping executives of Fortune 1000 companies increase
profits by learning about best practices for pricing strategies
and processes. The lectures and networking sessions will
establish a common understanding of how a company is performing
compared to best-in-class organizations and how to improve
pricing effectiveness.
Summit Presentation Abstracts
From Opportunity to Reality: A Guide to Making it
Real
Laura Preslan, Microsoft
Many companies that are interested in pricing have already
figured out that there is an opportunity for improvement.
But, what happens after the scatter plots, price bands, and
price/volume curves are created? This presentation discusses
how to translate pricing opportunities into pricing actions
to make it real for salespeople and to drive corporate change.
Examples include how to identify opportunities, how to communicate
effectively with sales management, how to create change at
the sales rep and account level, and how to keep the momentum
going after the low hanging fruit has been picked. This session
included a number of case studies to provide real-world examples.
The Art and Science of Pricing Psychology
David Dvorin, Fisher Scientific
Emotional
reactions play an inevitable role in pricing strategy and
execution, and successful pricing approaches must be designed
to effectively manage this psychological component of pricing.
Even in pure business-to-business pricing transactions,
where the decision-making should be based entirely on maximizing
financial return, emotional judgment is involved. Every pricing
decision includes some measure of “mental math” on
the part of the customer, and it is up to the pricing professional
to recognize and prepare accordingly. This discussion explores
different strategies and tactics for handling the unavoidable
psychological component in price setting, price communication,
and price negotiation. This presentation provides a combination
of near-term action steps and longer-term strategies to more
effectively manage the psychology of pricing.
Building Pricing Excellence into Your Organization
Patrick Connaughton, Forrester Research
Pricing as a discipline has been transformed by technology,
enabling the marriage of the art and science of pricing.
But challenges still remain: cultural challenges to adoption,
organizational challenges for how to organize for pricing
excellence, as well as the need to stitch together point
solutions like optimization within the overall pricing process.
Overcoming these challenges will be key as companies look
to take pricing to the next level. This presentation explores
the barriers and tradeoffs to achieving pricing excellence,
and some best practices for overcoming those barriers.
Measuring Pricing Performance: Looking Beyond Simple
Profit Margins
Matt Johnson, Simon-Kucher& Partners
Pricing
continues to play an increasingly prominent role as corporations
recognize it as the single biggest lever to increase their
profitability. Profit growth is certainly the hallmark of
better pricing, but profitability itself is often a misleading
metric when evaluating the effectiveness of a pricing strategy
or process. Many companies ignore pricing measurement as
they implement early pricing initiatives since these “easy” wins have lower investments, large
returns and the results are clear. However, as investments
in pricing increase and pricing strategies become more complex,
measuring the incremental impact of pricing initiatives becomes
both more difficult and more critical. Pricing measurement
becomes a core driver of justifying investments, prioritizing
initiatives and communicating results both internally and
externally. In this session, Matt discussed some of the current “best
practices” of pricing performance measurement as well
as common pitfalls to avoid.
Aligning Sales Behavior with Principles of Pricing
Excellence
BlueLinx Pricing Team
Critical to the success
of any pricing project; system implementation, policy revision,
process improvement or strategic change, is acceptance from
the sales organization. Change management is as important,
if not more so, than platform changes. BlueLinx’s
Pricing Team describes steps they took, and should have taken,
to align the goals of the corporation, through the pricing
implementation, with those of the sales force.
Comprehensive Pricing and Profitability Management
Programs
Robert Friedman, Deloitte
As a company’s executives begin to embrace price management,
the decision regarding which pricing software package to
buy is often viewed as one of paramount importance. Yet,
if executives focus solely on the software purchase, a range
of other issues may be overlooked that will limit the ultimate
value of the price management program. It is critical for
companies to develop an overall “blueprint” that
identifies the full range of pricing and profitability management
opportunities early on as well as a roadmap for how to attain
the blueprint. Critical items that may need to be addressed
include issues around the overall scope of the program, data
quality, pricing processes, staff skills and competencies,
organizational alignment and performance incentives. This
presentation addresses how viewing a price management initiative
as a broader change management effort rather than a system
implementation will ultimately lead to greater value creation.
Growing Revenue and Margins with Price Management
Robert Desisto, Gartner Research
The number
one lever that affects a company’s revenue
and profitability potential is its pricing strategy. Evidence
shows even increases as little as 1% in pricing will have
a substantial impact on profitability. Price management software
enables companies to optimize pricing to increase revenue
and profitability. This presentation will focus on how price
management software and best practices can help businesses
set, execute and analyze pricing to exceed revenue and profit
targets. Key issues include: How will pricing strategy affect
revenue and profitability? How will technology impact an
organizations ability to optimize pricing? How will companies
evaluate and implement price management software?
Building an End-to-End Pricing System
Steve
Pinchuk, Harrah’s Entertainment
Pricing is an area where everyone who has a bank account
believes that they are an expert. However, few people in
a company ever want to be given pricing as their responsibility.
Good pricing decisions are rarely noticed and bad pricing
decisions get broadcast throughout the company. This presentation
addresses some fundamental questions that most companies
should address. What role does pricing play in a Revenue
Management system? What knowledge is needed to make optimal
pricing decisions and how should that knowledge be utilized?
What data is needed and what needs to be done to raw data
to turn it into the fundamental knowledge needed to make
automated pricing decisions? What are the dangers to avoid
in making pricing decisions?
The Pricing Market and the Framework for Success
Sheryl Kingstone, Yankee Group
Cutthroat competition for business, fueled by knowledgeable
and demanding customers, is forcing companies to transform
their current price and revenue management processes. Price
management is one remaining opportunity that is proven and
practical, yet still largely unknown. It is a high-potential,
demand-driven strategy for companies wanting to identify
and capture new revenue opportunities. The intelligence enterprises
currently have available to identify potential pricing opportunities
is often vague and unreliable, typically sourced from complex,
data-driven spreadsheets and databases. This presentation
reviews: current enterprise strategies and tactics to pricing;
the impact of Price Management across the revenue lifecycle;
and target opportunities for Eliminating Price Erosion.
Finding and Fixing Profit Leakages
Lisa Thompson, Monitor Group
Dysfunctional
pricing policies teach customers and competitors to compete
more aggressively on price resulting in more rapid price
erosion. The dysfunctional policies (or lack of policies)
has unintended consequences—they cause confusion in
marketplace about the “true market” prices of
your products/services which, in turn, leads to more negotiation
pressure from customers and ultimately even more unwarranted
and undisciplined discounting. Reversing price erosion requires
organization-wide discipline and while difficult to achieve,
the short-term and long-term financial gains are worth the
investment. During this session, participants learned how
to identify price leakages and diagnose the root causes.
Participants also left understanding how more disciplined
policies and guidelines can be developed and what impact
they can have on their businesses.
Creating the Right Environment to Maximize the Value
from Pricing Tools
Augustin
Manchon, Simon-Kucher& Partners
This presentation
draws from the largest set of pricing best practices in the
world: the 1,100 pricing consulting projects conducted by
SKP in the last five years alone. How to avoid typical mistakes
such as automating pricing processes misaligned with the
business strategy? How to prepare your organization to make
the most out of innovative pricing tools? The focus is on
three specific environments: strategy, people and data. The
examples and practical takeaways address the perspectives
of four decision-makers: the director of pricing, the VP
marketing & sales, the CIO and the CEO.
The Promise and Pitfalls of a Global Pricing Initiative
Tom Jacobson and Julian Short, Accenture
As
the boundaries of enterprise value and supply chains transform
and competition assaults come in so many different local
and global forms, it is becoming more and more critical
to gain mastery of market conditions around the globe. Whether
it is to defend historic strongholds or to gain traction
in emerging segments and geographies, companies must bring
to the point of each deal their best and most strategic pricing
strategies and tactics. The need to enhance visibility into
information and decision process is a given, but overcoming
organizational resistance to change is one of the more complex
subjects to tackle. Participants gained insight into some
imperatives that need to be in place, with some practical
steps to take to master their ever changing global profit
objectives in a way that builds a collaboration between “corporate” and
the “field”.
Fundamental Redesign
of Your Pricing Structure to Drive Profits
Jim Saunders, Pricing Solutions Ltd.
This
presentation covers a case study of a company that dramatically
improved profitability by redesigning its’ pricing
structure. The presentation covers the strategic implications
and tactical considerations as we walk through a step-by-step
approach to redesigning your pricing structure. Although
the case study is of an industrial products manufacturer,
the lessons can be generalized across any industry. Topics
include: how to grow profits and share through a redesigned
pricing structure; using qualitative and quantitative research
to understand customer’s needs; developing a multi-dimensional
price structure to enhance customer satisfaction and business
results; how to customize the price structure to leverage
corporate strengths and minimize weaknesses; and how to select
between a pricing structure based on customer performance
vs. customer behavior. |
