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The Janitor Can Make Good Pricing Decisions?

Questions about pricing authority and control never go away…

Who should be making pricing decisions? Who’s in the best position to assess pricing tradeoffs? Who’s in the best position to align prices to differential value perceptions? Who should have pricing authority in order to maximize speed and responsiveness? Who should have pricing authority to maximize profitability?

While these are certainly interesting questions, what happens when you stop asking them? What happens when you try to make the best of the situation as it exists, rather than wishing for a different situation? What if you dealt with things as they are rather than wringing your hands over how they should be?

Well, you just might discover a new best practice…

In Profitable Pricing Enablement, we detail how some pricing leaders have discovered…largely out of necessity and almost by accident…a better way. This emerging best practice for ensuring good pricing decisions, without direct authority or control, is based on a somewhat obvious truth:

“HOW a pricing decision is made
is much more important than
WHO is making it.”

The essential insight here is that whoever is making the decision…a sales rep, a pricing analyst, a newbie, an old-timer, or the janitor…the information they’re relying-upon or drawing-from is what makes the qualitative difference. And the operational idea behind the approach is that by proactively delivering the right information…presented in the right way and at the right time…you can enable anyone to make a sound pricing decision.

The pricing leaders who’ve embraced this enablement approach have realized a number of somewhat “accidental” benefits as a result:

  • It involves less organizational change and political pain.
  • Sales reps have control and flexibility in the “last mile”.
  • It promotes more collaboration between pricing and sales.
  • It’s more scalable and repeatable than changing the “who”.
  • It can be leveraged effectively in any situation or structure.
  • Improved results can be generated in fairly short order.

For most of these pricing leaders, taking this approach was not their preferred option or ideal path forward. And initially, they developed and pursued “pricing enablement” as a sort of duct-tape solution to a set of seemingly intractable problems. Frankly, this was all they thought they could do!

That said, the approach has proven to be so beneficial that these leaders now report that they would definitely use it again…deliberately…even if they were offered full control and authority over pricing decisions.

So think about what it would take to enable a good pricing decision, regardless of who’s making it. What information would they need? When would they need it? And how would that information need to be presented and explained in order to make things as obvious and intuitive as possible?

You’ll know you’ve nailed it when even the janitor could make it happen 🙂

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