Being the “bad guy” is almost never fun. But sadly, it’s a role pricing folks frequently find themselves in.
Imagine this: The sales team is celebrating a big “win.” There’s lots of talking and laughing in the office—maybe even cake. Everyone is congratulating the salesperson on closing a huge deal. And then you have to be the Debbie Downer who interrupts the party and says, “Sure, you closed the deal, but you missed the pricing target by 10 percent. This deal is going to be terrible for our margins.”
It’s often the case that one or two salespeople are the worst pricing offenders. If the problem persists for a long time (as it usually does), you may get the unenviable task of delivering lectures about the importance of pricing. It’s a thankless job. Making matters worse, you know that the salespeople are probably going to keep on doing exactly what they’ve always been doing no matter what you say.
It’s tremendously frustrating. If the situation happens often enough, it can even make you question your career choices. But since the pricing team usually doesn’t have the power to fire or fine the sales team, it may seem like there’s nothing you can do to make it better.
However, there is actually something you can do, and it’s not all that difficult.
Instead of delivering ineffective lectures, we recommend that you leverage the power of peer pressure. Get the salespeople to police themselves so that you can stop playing “bad cop.”
One of the easiest ways is to publish a “closest to the pin” ranking each month. At month end, you simply look back at all the deals closed and calculate how close each salesperson was, on average, to target pricing. Then you rank the salespeople in order by their performance and put the list somewhere that everyone can see it.
If you want to make the ranking even more effective, offer a very small prize for each month’s winner. It can be a gift card for lunch out or just a silly trophy that gets passed around the sales team or something else inexpensive. The real prize, of course, is bragging rights—something every salesperson would love to have.
You’ll be amazed at how well this simple technique works. We describe it in more detail and offer some helpful tips in the tutorial Leveraging Peer Pressure to Improve Pricing. If you’re tired of being the bad guy, stop lecturing and put peer pressure to work for you.