In his novel Ulysses, James Joyce wrote, “A man of genius makes no mistakes. His errors are volitional and are the portals of discovery.” While we’re fairly certain that Joyce was not thinking about pricing when he wrote these sentences (although Ulysses covers so much ground it might be possible), it nevertheless applies fairly aptly to B2B organizations.
In all walks of life, the natural tendency is to try to avoid failure — and B2B pricing is no exception.
Unfortunately, being overly risk-averse also tends to stifle innovation and growth. It doesn’t allow you to make the discoveries that Joyce mentions.
We would like to suggest that there is a very good way for pricing teams to harness the power of mistake-making. Yes, it can be a little bit risky. But it also opens up the opportunity for significant breakthroughs while minimizing the possibility of large-scale disaster.
What is this amazing methodology?
The pricing pilot program.
When implemented well, a pilot program acts as a sandbox where the pricing team can fail in a manageable way. And pilot programs offer some great benefits, including the following:
- Start small and fail small. As we’ve discussed numerous times, small changes in pricing can make a huge impact on your bottom line. If you were to make a change across the board to all of your prices at once, it could tank your profits. But making smaller, targeted changes to your pricing model in a limited way allows you to see the impact of proposed changes while minimizing the consequences.
- Easier acceptance and approval. Because the risk is less with a pilot program, it’s much easier to get the executive team to sign off and approve budget for your experiment. Psychologically, it’s just much easier for someone to go along with a new idea when the perceived risk is low.
- Room to learn. The low stakes also take some of the pressure off the pricing team. Instead of feeling the stress of needing to perform flawlessly, you have the freedom to play around and learn some things that will help you make better large-scale decisions. And you can keep iterating until you get it right.
- Prepares the team for pushback. When you are pitching an idea — even if it’s small — you will inevitably get some pushback. These counterarguments will show you the kind of proof you will need to gather in order to win approval when the time comes to roll out the program more widely.
- Data-driven expansion. Above all else, a pilot program gives you the hard data you need to feel confident that your initiative will succeed. It gives you a roadmap to a smooth transition on a larger scale.
If you’re sold on the idea of a pilot program — or if you’re at least willing to give it a try — check out the webinar on Pricing Pilot Programs. It walks you through the process of designing a program, selling it internally, measuring the right metrics, and scaling it up.
In the end, an ideal life — or an ideal career — is not one without mistakes. It’s one where you’ve made the right kind of mistakes, mistakes that allow you to learn and to grow.