PHILOSOPHY

Pricing is messy!  All business functions have their own ideas as to what constitutes the right price, many times fueled more by emotional feelings than by actual data.

·         Finance - "Margins are too low" 

·         Sales - "Prices are too high - I am losing business"  

·         Product Development - "The life cycle pricing schedule is too short"
·         Product Management - "What segments are going to pay what price"

·         Marketing - "That price does not represent the value we created"

·         Operations - "We have unused capacity, run a promo"

·         IT - "We do not have the bandwidth to constantly run data pulls"

A good pricing executive needs to manage all of these concerns and speak their language.  Visually represented, it might look like this:

With over 25 years of experience in Sales, Finance, Marketing and Product, I am able to do this.  I am able to build strong cross functional teams by bring all parties to the table and giving them a voice.  I am able to take all input and craft it into a strategy that all can get behind. 

When talking about pricing, there are 3 generally accepted pricing strategies:  Cost Plus, Market Based and Value Based.   Each one has their own strengths and weaknesses.  I do not believe in any one pricing strategy.   I believe that the correct strategy is unique to your business and will invariably have pieces of the three strategies as its underpinnings.  I believe that ascribing to one strategy is short sighted. That is why I have moved away from these and created the Pricing Pyramid.  It takes the best of the three strategies and blends them into one that is easy to understand and easy to implement.