To be a successful pricing practitioner, you have to have quite a few different abilities. You need some basic aptitude for math, and you should have a solid understanding of basic business principles. You’ll also need some people skills in order to educate and influence the rest of your company. And of course, you’ve got to be able to put together spreadsheets and reports using the various technological tools you have at your disposal.
But you may have overlooked one very essential set of skills: investigative abilities.
Why do pricing practitioners need to be good investigators? A huge variety of marketplace factors affect the prices buyers are willing to pay. When firms are having trouble closing deals, it’s tempting to jump to the quick conclusion that your prices must be too high. But as Sherlock Holmes once said, “There is nothing more deceptive than an obvious fact.”
It’s just as likely—and if you’ve done your work well, perhaps even more likely—that something other than the price is to blame for the situation. And it’s almost always a mistake to change your prices without first fully investigating the issue. If you make assumptions about why a problem occurred and take action without discovering the true root cause, you are just as likely to make things worse as to correct the situation.
In order to be a good pricing detective, you’ll have to set aside your pre-conceived notions and look at what the data is telling you. If something doesn’t seem to make sense, you’ll need to dig deeper until all the facts line up. And you’ll need to double- and triple-check the sources of all your data to make sure that the numbers you have are really the numbers you were looking for.
To illustrate the necessity of finding hidden root causes, we asked members of the PricingBrew network to share their stories about problems that required a little investigation before the true solution could be found. The case study Exploring the Root-Causes of Pricing Problems explores seven situations where careful, thorough detective work was necessary to diagnose and solve problems that were originally blamed on pricing. In nearly all of the cases discussed, simply lowering prices would not have helped, and in many it would have exacerbated the underlying trouble.
If you want to make yourself more valuable to your employer (or future employers), one of the best things you can do is hone your ability to examine problems and diagnose their true root causes. To get started, check out the express guide “Three Core Pricing Skills No One Talks About,” as well as the case study resource mentioned above. In addition, sign up for our upcoming webinar “Diagnosing Pricing Problems.” You’ll learn the most common root causes of pricing problems and a straightforward diagnostic technique that will help you improve your detective abilities.
So the next time someone comes to you with a perceived problem with your pricing, put on your private investigator’s hat before you commit to changing prices.
Three Core Pricing Skills That No One Talks About
For many B2B companies, increasing knowledge around pricing is a priority. But this education regularly ignores skills that are critically important. In this guide, learn about three areas that are often overlooked.