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You Don’t Need…or Want…Pricing Authority

In the Pricing Lessons Learned on-demand webinar we cover a number of valuable lessons that other pricing leaders have learned over the years. Very often, these lessons were learned the hard way. Due to my own career experiences, one lesson in particular really hit home:

Being an effective influencer is much more valuable than having authority.

It’s just so easy to think that having ultimate authority over all things pricing is some sort of “ideal” to shoot for. It’s easy to believe that if we just had the authority, then we could really “make things happen” by simply forcing the progress and change we’re seeking.

But in my experience, having authority over all things pricing is not all it’s cracked up to be and there are some major downsides:

  • Pricing authority isn’t given up or relinquished without a fight.
  • Forced compliance will often breed resentment and resistance.
  • Those stripped of authority are prone to actively look for faults.
  • Ultimate authority carries ultimate accountability for results.

And besides, in B2B environments, centralizing authority over all things pricing can actually reduce…rather than enhance…overall pricing effectiveness. What you gain in terms accuracy and consistency often comes at the expense of responsiveness and adaptability to changing market conditions and customer dynamics.

On the other hand, being an effective influencer has a lot of advantages and benefits, while sidestepping many of the downsides:

  • You can achieve most of the change and progress you’re seeking.
  • Influencers are often viewed as “advisors” rather than “usurpers”.
  • When people draw conclusions for themselves, buy-in is a given.
  • People making their own decisions are less likely to point fingers.
  • Ultimate responsibility and accountability stays right where it is.
  • You don’t need anyone’s permission to exert greater influence.
  • Being more influential is transferable to every aspect of your life.

And while authority is a binary thing…either you have the authority or you don’t…influence tends to be on spectrum. Influence is always “on” and you’ll just have more and more of it as you learn, develop, and improve your skills over time.

Knowing what I know now…having experienced many of the downsides of authority myself…and if given a choice…I’ll take influence over authority every single time.

Not just because it’s less personally painful. Not because I want to avoid accountability. And certainly not because I’m lazy. No, I would choose influence over authority because it’s actually more effective for driving pricing improvement in B2B environments. All the other benefits are just icing on the cake.

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