What are the key pricing skills and competencies that you look for in your team members?

Successful pricing teams merge crucial hard skills—like data analysis, understanding pricing methodologies and customer behavior—with essential soft skills. Effective interpretation of vast data which leads to insightful margin-enhancing recommendations are part of hard skills. Soft skills, such as communication, storytelling, and empathy, wield pricing knowledge to influence stakeholders and navigate potential conflicts. Business acumen serves as the bridge for these skills, necessitating a deep understanding of business intricacies to align pricing strategies with broader business objectives, balancing market share and profitability tradeoffs.

Analytics is crucial for pricing because it provides insights to maximize revenue, enhance competitiveness, and drive sustainable growth in an increasingly dynamic and complex marketplace. For example, with the recent pricing excellence project, we are creating first the baseline with different zones using our analytical capabilities in CPQ tools and then providing insights to the zone where can we add the biggest value in terms of profit and revenue.

For B2C subscriptional pricing key data input for analysis and pricing are: existing customer base tiering and ATL/BTL pricing, market (competitor) pricing over time, price elasticity on the market and for your brand/product/service, and of course setting the purpose of your pricing as base for the analysis (do we need to grow by volume, value, or a combination of the two)? This in turn means that you have your base data, you need to track competitors, and you will need to formulate a hypothesis for your future pricing that you can survery in a con-joint. Then given that you can do the case for what will happen with your ATL/new sales effects of pricing and how the new ATL/front book will affect your base/back book.

In addition to the mentioned aspects, pricing decisions may also involve considering regulatory constraints, geopolitical factors, and global economic trends. Also, understanding cultural differences and regional variations in consumer behavior can be crucial for devising successful pricing strategies, especially in international markets. Additionally, qualitative insights from customer feedback, industry experts, and sales representatives can complement quantitative data analysis, providing a more comprehensive understanding of market dynamics and informing pricing decisions.

Effective pricing requires extensive data analysis, including market research, customer segmentation, price elasticity, cost structure, and value proposition. Team members should be skilled in collecting, interpreting, and applying data to make well-informed pricing decisions. They should also be proficient in using tools like spreadsheets, databases, statistical models, and pricing software to perform analyses and communicate findings.

?? Pricing leaders need strong business acumen ?? because pricing decisions hinge on numerous factors, both internal and external. ?? A comprehensive grasp of the business landscape ?? is essential. Factors like market dynamics, competition, cost structures, and customer behavior play pivotal roles ??. Business acumen helps leaders interpret these variables, making informed pricing choices. It's like assembling pieces of a puzzle ??, where each element affects the final picture: profitability. Therefore, a broad understanding of business, encompassing finance, marketing, and operations, is indispensable for pricing leaders to navigate the complex terrain and set the optimal price. ????

Team members need to understand your business objectives, value proposition, the competitive field, and customer requirements, alongside industry movements. This gives a strong foundation to Business acumen: Pricing is an art as much as it is a science, a blend of analytical/strategic insight and align your pricing strategy with the overarching business goals. An overlook and critical skill is their ability to thoughtfully balance the intricate trade-offs among revenue, profit, volume, and market share. I have found that volume and market share are often not given the weight the deserve when negotiating price.

Pricing leaders who possess strong business acumen hold the key to strategic decision-making. Pricing isn't an isolated activity – it's deeply intertwined with market dynamics, competition, cost structures, and customer behavior. Having a panoramic view of the business landscape is essential for deciphering these interconnected factors and setting prices that hit the sweet spot. Business acumen is their navigation system, a map of the complex terrain – finance, marketing, and operations – guiding them towards optimized pricing for sustainable profitability

Let's take an example of hotel revenue managers; they all come from front desk guest checkin experiences. This experience helps them build an understanding of demand patterns, role of competition pricing, and in their interactions w/customers they get to undertand demand and value drivers. Pricing team members need a strong business acumen. Often to build a strong base here, I like to send pricing team members in the field in interact with the customers and build first hand knowledge of (a) demand drivers, (b) value drivers, (c) edge cases, (d) pricing factors. The knowledge gained in the process helps build the right pricing frameworks; when layered with strong data engineering, it sets stage for automation and tracking of pricing KPIs.

If you're managing a business (or parts of one), you should understand basic pricing concepts like value-based pricing and price elasticity. If your job is to optimize pricing, you should be familiar with pricing methodologies such as Van Westendorp, Gabor Granger and Conjoint.

Pricing team members not only need to have strong business communication skill - persuasive presentation, storytelling, active listening, conflict resolution, understanding audience, etc. but more importantly they need to have strong data story telling skills. With strong data storytelling skills, pricing team members are able to simply and convey key insights from (a) complex data analytics or data science computations, (b) trends, correlations and causation factors, (c) forecasts and area of org risks, (d) customer data (browsing, search, purchase, reviews, etc.)

In the field of pricing, presentations of technical data to technical, non-technical and executive leadership will occur regularly. Being a skilled storyteller is key, and being able to understand the audience and adjust the story-telling method to each audience will be key. Understanding the audience, and what they need to know, allows you to present persuasively without losing the audience in the process. Each audience group has different needs, learning styles and expectations.

Pricing requires collaboration across various functions. Team members should communicate clearly and persuasively with stakeholders like sales, marketing, finance, product, and management. They must explain the rationale and benefits of the pricing strategy, address any questions or objections, and listen to others' perspectives and needs. Building trust and rapport is essential for a cohesive and effective pricing approach.

Getting various stakeholders aligned on a price change (or on resisting one when a new product doesn't immediately sell like hot potatoes) can be a daunting task. Start with understanding incentives of each stakeholder involved in a pricing decision, find out who the ultimate decision maker looks to for advise, and speak with these individuals one on one to get their buy in or at least understand their objections.

As for any important decision making the why is often the most underrated part of the process. Explaining what and how your pricing should be done is not easy but it is still harder to explain why. Basically it comes down to that your overall strategy, your wanted market position, your offering portfolio, your campaign pricing, your product communication, and your pricing fits together and makes sense. This might seem fuzzy - and it is! Build your story internally with data points, insights and survey input, be transparent, show the case for what it is, or even less than it might actually be. If you have done the work it will show.

Pricing is a dynamic and flexible aspect of business strategy. Team members need to negotiate effectively with internal and external parties, including suppliers, distributors, customers, and competitors. They should focus on creating and capturing value while protecting and defending the pricing position. Additionally, they must be adept at handling conflicts and challenges, finding win-win solutions to maintain relationships and achieve business objectives.

?? Individual negotiation skills are crucial in pricing, as they can influence deals significantly. Yet, many companies face a dilemma ??. Negotiators may find themselves in situations where they risk losing out due to lack of guidance. ???? Management's role is pivotal ??. They must establish a clear mandate ?? and a "walk-away" price ??, below which concessions are unwise. This empowers negotiators and ensures strategic pricing decisions. ?? Effective communication between management and negotiators, along with predefined limits, strikes a balance between flexibility and profitability, enhancing the overall pricing strategy. ??

Negotiation skills aren't a bonus, they're a necessity. Empower your team to not only understand the pricing strategy but also to confidently articulate and negotiate its worth in any situation.

Pricing isn't just the listed cost. The "true price" considers costs, value, the market, and the relationships involved. Negotiation skills are essential because they help your team: -Discover what matters: Negotiate to understand the needs and priorities of suppliers and customers, finding ways to deliver more value. -Justify your price: Use negotiation to clearly demonstrate the value you provide, supporting your pricing position. -Stay flexible: Market changes mean "true price" shifts. Negotiation lets you adapt agreements to remain profitable. -Create win-wins: Negotiation helps find deals where everyone feels heard, ensuring your pricing is fair and leads to lasting partnerships.

Pricing is not a mundane task but a dynamic and innovative one. Any team needs to think creatively and develop novel pricing strategies, such as discounts, bundles, subscriptions, or dynamic pricing. They should be skilled at testing and experimenting with various options to find the most effective approaches. Additionally, they must be agile and responsive to evolving customer preferences, market conditions, and competitive actions to stay ahead and optimize pricing performance.

Key to fostering a creative environment for pricing is to establish very clear delimitations to what the task and targets are. Might sound paradoxical, but framing a problem enables creativty. Give your team free hands to explore data and try out their hypothesis. Benchmark competitors and other markets to get inspiration. Access data and content and spend money on great content. Do regular, every year at least, customer surveys. If you follow the market close you will eventually learn to predict it rather well - and then you be creative about how to steer it, form it, and bend it to your will. Ideally.

I have a good example of creativity in pricing: "Name Your Price" Museums -Instead of fixed entry fees, some museums let visitors pay what they want. -This attracts new audiences who might not usually afford the entry price. -It helps museums understand what people value their experience at. -Builds a positive reputation for the museum. This shows how pricing can be a tool for accessibility, understanding customer value, and building brand image.

Pricing is not a one-time or final decision but a continuous and iterative process. The team needs to learn from experiences, refine their pricing skills, and adapt strategies based on performance metrics and feedback. Regularly monitoring and measuring the impact of pricing strategies is crucial, as is staying updated with the latest trends and best practices. This approach ensures ongoing improvement and responsiveness to market dynamics.

The primary pricing skills and competencies include a strong business acumen, encompassing a deep understanding of own reality, big picture business environment, competitors, and customer needs & demands. Additionally, creative thinking abilities to innovate beyond conventional approaches and analytical prowess to dissect internal and external data effectively, extracting actionable insights.

Start with tracking your competition over time and establish trends. Then bench mark with international, comparable markets. Build a base of data and knowledge. Then start building new offering and pricing and case them, for the short term and the long term, the longer in the future you are looking the harder it gets, but also there is more room for creativity. Study pricing in other businesses and other types of products/services. Find non-competitors in your area in other countries and sit down with them and get their knowledge and input. Talk about pricing, challenge your team to price your products, other products, and the competitions products. What you do every day you will eventually excel in.

From my experience, the most important skill to implement a pricing strategy is the ability to built trust and relationships across the organization. Pricing execution is a result of the buy in across the organization. As such, Pricing has to closely influence PnL owners while at the same time working closely with Marketing, Sales and Finance. Pricing strategy heavily relies on market and product information - which often sits with Sales and Marketing. Hence, without a strong relationship locally, it will be very hard to collect the right data to build a strategy and have the buy in to get it implemented.

That is a great list composed of harder and soft skills but … … I suggest to add a key, missing, hard skill: the ‘Pricing-Basics’ skill set. That is, a basic knowledge i) of the key contracting options in the industry in question, ii) of how different concrete pricing solutions address different customer concerns, iii) of the actual pricing&strategies being applied in the company … With that in place team members can then be so much more effective and apply the other skills highlighted (e.g. creativity, communications …)

Key pricing skills and competencies to look for in team members include strong analytical abilities to interpret data and market trends, strategic thinking to align pricing with business goals, and proficiency in pricing tools and software. Communication skills are essential for explaining pricing strategies to stakeholders. Additionally, adaptability to changing market conditions and a customer-centric approach to ensure pricing strategies meet consumer needs are crucial. Collaboration skills are also vital for working effectively across departments.

?? Pricing-related skills, while valuable, don't sum up to equal the ?? organizational pricing capabilities. Organizational pricing involves a holistic approach, encompassing strategy, execution, and coordination across departments. It's not just about individuals' proficiency, but also processes, data, and tools. Assessing and improving these capabilities is crucial for achieving optimal pricing strategies. ?? Systematic evaluation helps identify gaps and inefficiencies, leading to better decision-making and profitability. By recognizing the distinction between individual skills and organizational capabilities, businesses can enhance their pricing strategies and ultimately drive greater success. ??

Pricing strategy is about understanding of each customer's unique needs and challenges. Recognizing that every customer is unique, with individual pain points, underscores the importance of tailoring our approach. When our product effectively addresses the most significant pain points of a customer, their willingness to invest increases substantially. This approach ensures that our pricing not only reflects the value our product provides but also resonates with the specific benefits our customers seek.