In all the hype and excitement around new pricing technologies and tools, it’s worth remembering something important:
The technologies are only part of the equation…and they may not even be the biggest part of the equation. Yes, the capabilities are impressive. Yes, the potential is real. But the success and efficacy of these tools in practice depends on much more than the tools themselves.
That’s because there are at least two other variables that tend to matter just as much…and maybe even more.
Now, neither of these variables will get much attention in vendor demos or conference presentations. They’re not new. They’re not particularly sexy. And frankly, these variables complicate the tidy little narrative that the technology alone will transform your commercial performance.
The first variable is the human component…
In most B2B environments, pricing is a team sport. While there may be a Pricing department, all pricing contributions and decisions aren’t isolated or contained to just that silo. Almost everything we do with pricing…and everything we want to do with pricing……rubs up against many other functions, other departments, other contributors, other stakeholders, and so on.
And all of these different people can have incentives, priorities, and perspectives that may not align…or may even conflict…with ours.
A sophisticated pricing technology can generate incredibly precise and timely recommendations. And on paper, the logic and math might be airtight. But once those recommendations run into a sales organization worried about losing deals, or a product group concerned about unit volumes, things tend to get a lot more complicated.
While technology can do incredible things, it’s all the humans involved that will ultimately decide whether those things actually survive contact with the rest of the business. That’s just the reality of B2B pricing in the real world.
Which brings us to the second variable…the power of the status quo.
As we’ve highlighted many times before, we humans are biologically wired to resist…and to some extent, even fear…change. After all, to our ancient ancestors, change was rarely for the better. So being collections of human beings, our organizations are already naturally inclined or predisposed to just keep doing what we’ve always done.
But on top of that, almost everything about how our business operates in the marketplace is purposely architected to reduce variability, maintain consistency, and resist change. Over time, we’ve designed, defined, and implemented all manner of processes, systems, procedures, policies, and rules that all work together to not only reinforce but effectively codify “how we do things here.”
As such, any new pricing tool or technology won’t be dropping into a vacuum or onto a blank canvas. Instead, it’ll be landing in the middle of a whole bunch of legacy structure and organizational inertia. And regardless of whether all these elements of the current “status quo” still make sense today, they will nevertheless be working against any new thing, like white blood cells attacking a virus.
This is how pricing technology transformations can stall out even when the technology itself is stellar and works exactly as advertised. And this is precisely why experienced pricing leaders will devote a lot of time and attention to things that seemingly have little to do with pricing or technology:
- Influence and persuasion
- Strategic change management
- Organizational dynamics
- Cross-functional collaboration
- Data-driven storytelling
Obviously, we’re not going to find these sorts of things listed as features of any pricing technologies or toolsets. But in most B2B organizations, these are exactly the sorts of the things that will ultimately determine whether any given pricing technology or toolset will actually succeed…or fail miserably.
Now, I say none of this to diminish the value of new pricing tools and technologies. The latest AI-enabled generations of these solutions can indeed accelerate insights, surface hidden opportunities, support more sophisticated decision-making, and help organizations develop capabilities that were previously out of reach. And from my perspective, the use of these advanced tools represents the height of best practice in pricing today.
My point is that the tools alone are almost never enough in B2B environments. And to maximize our odds of success, we have to acknowledge and address the other huge variables in the equation. They aren’t sexy; nor do they get much attention from the business press or punditry.
But without them, the technology is…at best…only half-baked.
Making Change Happen
How do you get executives to recognize a need for change? How do you get an organization to move away from the status quo and actually embrace doing things differently? How do you foster true adoption, as opposed to merely forced compliance?
Delivering Data to Decision Makers
Providing data to decision-makers is a core responsibility for most pricing teams. But getting it right is a significant challenge. In this on-demand session, learn how leading teams are making their efforts in this area more effective.
Boosting the Pricing Team's Influence
How can a B2B pricing team improve results when they don't control all the cooks in the kitchen? How can they be heard when others don't have to listen? In this session, learn the science of influence and persuasion.
