It’s a great time to be a B2B pricing professional…
Across dozens of different sectors, the economic optimism is really hard to miss. Companies are clearly feeling good about their prospects for the future and they’re gearing up for growth. But as the last downturn still looms large in recent memory, companies want to be very smart about driving profitable growth.
And in the interest of driving more profitable growth, more companies than ever before are looking to take their existing pricing functions to the next level; or working to establish new pricing functions where none have existed before.
That said, if you really want to capitalize on this “rising tide” you’ll need to acknowledge certain realities associated with a career in B2B pricing:
1. Pricing in B2B environments is always a “team sport”.
Given how most B2B companies are structured these days, there are many different groups playing at least some role in pricing.
The sales team is an obvious contributor. But decisions in product management can skew the game…for better or worse…before products are even introduced. The way marketing handles positioning and communication can boost…or degrade…prospects’ value perceptions. And executive management has the ability…and often, the desire…to weigh-in and override everything.
Amazingly, in some organizations even the accountants can have an influence on pricing by virtue of how they choose to measure costs and report profit performance.
So while one might think that having “pricing” in your title should mean that you actually control all aspects of pricing, it’s just not realistic in B2B. To be successful as a pricing professional in a B2B environment, you have to recognize and accept all of the “cooks in the kitchen” and become very effective at influencing them.
2. Profitable pricing will almost never be the top priority.
We all know that pricing is an extremely powerful profit lever, whereas a small improvement in realized prices can generate more profit than a giant increase in sales. It’s math. It’s fact. It’s axiomatic.
That said, ask 100 CEOs if they’d rather generate 10% more profit through a 1% price improvement or through a 30% increase in sales. Of course, most will say, “I want both by the end of next quarter!” But if they really had to choose, every single one would opt for sales growth. And I suspect that you would, too.
Pricing is clearly very important. As stated earlier, more companies than ever before are investing in improving their pricing capabilities. But you have to keep it in the proper perspective and work to align your efforts with the needs and priorities of the company as a whole.
3. Demonstrable results are the best resume builders.
One thing true in nearly any profession or career path is that demonstrable results tend to cut through a lot of confusion and uncertainty.
While someone who doesn’t live and breathe pricing may find it difficult to unpack what you do, how you do it, and whether or not you’re actually any good at it, the results you’ve been able to produce are very hard to misinterpret or dismiss.
Tell me you’ve conducted a bunch of pricing analyses, processed hundreds of large bids, and generated segment-specific price matrices, and I might suspect that you know your stuff…probably…maybe.
But show me how you boosted margins by 7% without sacrificing any unit volume, increased RFP win-rates and deal-sizes at the same time, or reduced price exceptions by 25% while actually increasing net contribution, and I’ll have little doubt that you know how generate results…even if I know relatively little about the practice of pricing.
In summary, with companies investing in the future again, there’s never been a better time to be a B2B pricing professional. But while the rising tide will float all boats to some extent, the greatest rewards will go to those who can effectively influence others, support the broader objectives and priorities, and produce results that are obvious to everyone.
Advancing Your Career in Pricing
There's never been a better time to be a B2B pricing professional. But when it comes to your career, you can’t just hope that good things will happen in the future. In this on-demand webinar, learn how to take charge and make good things happen.
The Top "Lessons Learned" by Pricing Leaders
How have pricing leaders become leaders? What can their 20/20 hindsight teach us to streamline our own path? In this on-demand webinar, learn the top lessons gleaned through our research.