truce or friction

Professional Pricing SocietyOctober 2005

© Linda Gorchels 2005 1

Truce or Friction: The Magic of Collaboration

Linda GorchelsDi t E ti M k ti C i lDirector, Executive Marketing Curriculum

Fluno Center for Executive EducationWisconsin School of Business, UW-Madison

Madison, WI USAAuthor of The Product Manager’s Handbook

[email protected]://exed.wisc.edu/marketing/

Goals for our time together

Improve price managementControl processes to reduce defectsControl processes to reduce defects

Rethink your collaborative effortsBreak down the silos

Deal with unavoidable ambiguityRedefine opportunities

© Linda Gorchels

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Pricing factors

InputsPrice

OutputsInputs planning Outputs

© Linda Gorchels

Now let’s get to work on defects

What is a pricing defect?Which input or output has the most c put o output as t e ostvariability, the biggest impact on corporate goals, and/or offers “low-hanging fruit” for fast improvement?

Negotiated prices out of compliance with guidelines

© Linda Gorchels

Deviations between invoiced and final priceSpecific customer or segment prices inconsistent with segmentation policiesDeclining ability to attain share goals



Diagram the related processReceive RFP from customer

Compile quotation informationCompile quotation information

Submit proposal to customer

Negotiate changes with customer

© Linda Gorchels

Obtain approval for policy exceptions

Submit final offer to customer

Establish improvement metricsCreate a shared understanding of the expected deliverable here: improve the process to reduce theimprove the process to reduce the rate of price-related defects (as defined earlier).Gather, study and document data about the overall process as well

© Linda Gorchels

pas the steps in the process.Build collaboration & cooperation



Need to break through the wallsPricers feel they

are the guardians of

Salespeople feel they “own” the customer relationship

Marketing people feel they have objective information

gprofitability

© Linda Gorchels

Practice “yes, and….”

rather than

“ es b t ”

© Linda Gorchels

“yes, but…”



Practice authentic conversation

The ABC's of Authentic Conversation

© Linda Gorchels

Author: Patricia Ryan Madsen Author: Susan Willett Bird

Find opportunities in ambiguity

The very nature of customer experiences is changing, causingexperiences is changing, causing uncertainty in marketing strategy and pricingLook for challenges to “status quo” pricing

© Linda Gorchels

Emerging marketsDisruptive technologiesBottom-feeding



And in the end …

Pricing will always involve science and art – and both benefit from processesart and both benefit from processesPricers will need to collaboratively bridge between departmental goals in establishing and executing structure, strategies and policies

© Linda Gorchels

A fresh perspective on ambiguous information may yield new insights into improved pricing