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When Strategic Pricing Isn’t Strategic

Recently, I met someone at an event who described themselves as being involved in strategic pricing. They even handed me a “Director of Strategic Pricing” business card to support their assertion. But after talking at-length about what they actually did on a day-to-day basis, it became clear that while this person may have had the “strategic pricing” title, they didn’t have the goods.

As they say in Texas, “He had a big hat, but no cattle.”

Of course, he wasn’t even aware of the facade he was operating under. He wasn’t trying to perpetrate a fraud or anything nefarious like that. In fact, he was quite confident that what he was doing was indeed strategic pricing. So, I gave him the benefit of the doubt and let it slide under the George Costanza defense, i.e. “It’s not a lie if you believe it.”

So…what gave him away? How did I know he wasn’t really involved in strategic pricing, even though his business card said otherwise?

Strategic pricing…real strategic pricing…is about proactively creating the conditions under which better and more-profitable pricing outcomes are the natural result. And nothing about this person’s daily activities and responsibilities fit…at all. Therefore, by definition, he was not involved in strategic pricing. It’s as simple as that.

You see, everything he described about his function was extremely tactical and internally focused. He and his team moved numbers around. They managed price-lists and kept product cost information up-to-date. They fielded availability questions from the sales team. They oversaw the workflow to make sure deals got approved in a timely manner. And, they generated reports…tons and tons of reports.

When I asked about the needs and preferences their target market segments? Nada. Priority value-drivers amongst customers and prospects? Zippo. Competitive differentiators and key positioning elements? Goose egg. He didn’t know any of these things…nor did he seem to think that he should.

But here’s the cherry on top…

When I asked about the company’s pricing strategy, I was told that it was someone else’s responsibility…and he wasn’t quite sure who those people were.

Come on! How can you be a strategic pricing person while not doing anything remotely strategic? While not knowing anything about your customers and competitors? While not having a clue about your strategy for winning the business you want to win?

I guess you just get business cards printed up.

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