Pricing Control

The most difficult challenge faced by management is the development of an effective pricing control system. Defining control and management of pricing is a challenge that requires full collaboration between the organisational functions of sales, marketing, finance and operations.

The basis of pricing control begins with the company policy. Most policies are long wordy documents. In the Pricing Insight system, policy is a clear and concise set of rules that all key players in the business understand.

Importantly these policies are generated by the team themselves as an output from an in-house planning workshop. The policy ensures pricing tactics are understood and implemented as agreed at regular structured price review meetings. Non-complying tactical pricing requests are evaluated and authorised by appropriate management.

Control can take a number of forms. For example:

• policy enforcement
• process mapping
• tactics advice issued to the field team through to limiting pricing decisions to a centralised pricing team controlling all system inputs

In many companies today a menu based pricing system allows value management by the customer to self select how much they want and how much they are willing to pay thus eliminating the need to sell or negotiate pricing. Customers learn that the system is not open to pricing discretion by sales staff and this eliminates the inconsistent go to market that characterises many evolving businesses.

The most powerful play you can make is to establish a dedicated resource or team to manage pricing within your business. This resource works cross functionally, integrates muliple viewpoints and commercial issues and must have authority to make the final call. The final call is a process, rules driven decision. This rules driven decision making ensures that your business has the intellectual property contained within the business itself and not dispersed across the organisation at an individual level.

How Pricing Insight can help your business

We utilise a comprehensive diagnostic and benchmark assessment to evaluate your current capability, agreement amongst team members on that capability and ways to generate alignment and subsequent business improvements.

To find out how much pricing control you have in your business, try completing Pricing Insight's 21 point diagnostic.

Contact Us

Email : action@pricinginsight.com.au
Phone: +61 2 9973 4099