Are Value and Diversity the Keys to Competitiveness in Pricing?
In these pandemic times, when the temptation to take a knee-jerk-reaction approach to pricing is strong, looking at adopting a value-as-a-service attitude to your pricing strategy means meeting your customers on a level playing field. Join Gabe Smith (@SwEvangelist) and Kevin Mitchell, President of the Professional Pricing Society (@PricingSociety), as they discuss that although our business dealings often live in a virtual world, the reality is that the diversity of our professional environment contains the keys to a more informed and competitive future.
Listen to the podcast with the embedded player below or read along with the transcript. You can listen to the podcast on Apple Podcasts, Spotify, Stitcher, or wherever else podcasts are hosted. Want to see the conversation and not just listen? Watch on YouTube.
Gabe Smith 0:00
Hello, everyone, and welcome to Pricing Matters. This time we’re going to chat with a constant and somewhat of a celebrity in the pricing world. Kevin Mitchell, the president of the Professional Pricing Society. Hi, Kevin. Thanks for joining.
Kevin Mitchell 0:11
Hey, Gabe. Very Good day, thanks for the opportunity to talk with you today. I am certainly not sure about the celebrity part. We will see what we can do here. But thanks for the opportunity to talk.
Gabe Smith 0:21
But for those that might not know what PPS, the Professional Pricing Society, does, or what you do, maybe you can educate the audience a little bit and tell us about it.
Professional Pricing Society
Kevin Mitchell 0:28
Gabe, the Professional Pricing Society, PPS, is the world’s networking information, education, certification professional organization, we’re a member organization for people in pricing and revenue management and sales enablement, marketing and related fields. And basically, if you are in one of those areas, or if you are in pricing, perhaps connected with another discipline. We’re the organization where you would go through your membership to get skills, strategies, tactics, acumen to do better in your jobs. We do conferences across the globe, in non-pandemic years, we would do typically three, four or five major conferences on two, three or four continents. We have publications about pricing, we have a bank of online pricing courses and lots of options for you there.
And basically, we are the professional organization for people in this part of the world. PPS has a very long, storied, interesting history, it goes back several decades to way before pricing was cool. PPS started as a newsletter, kind of connected to office hours, where you could get in touch with a consultant, you know, via phone or something like that. And this was in the early 1980s. And in about 1990, maybe it was 1991, we started doing conferences. And of course, those have grown over the years. And last year, we celebrated our 31st year of doing conferences in North America, we’ve been doing them in Europe for 15 years.
And of course now in 2020, everything, everything is virtual. But we have made the shift there as well. But basically very, very long answer to your short question. But PPS would be where you would go to network to train to get educated, to get a psychological group hug from others in your area. If this is part of your job.
Gabe Smith 2:25
Not to toot our own horn. But it’s also I would say at the conferences where a lot of people go to see what’s out there in the world of software, pricing optimization software, and you have a lot of vendors and sponsors that normally when you have the exhibition halls that people can go around and get demos and see kind of the latest and greatest of what’s out there as well. Right?
Kevin Mitchell 2:42
Yeah, absolutely. And that’s a big part of our events. And of course, we’re doing it virtually as well, too, with virtual software sponsored demonstrations and things like that. But yes, it would have been the place where you would go, you could hear from the Big Four accounting firms, there are a handful of pricing, specific consultancies and adjacent fields. And of course, you know, Pricefx and other companies who have software offerings for pricing that that is exactly where you would go in our exhibit hall to see the latest and greatest, to get a demonstration, to get all your answers.
Adapting to the “New Normal” in 2020
Gabe Smith 3:13
2020 has been a virtual year, I thought. I’ve been in many, many PPS conferences going back to probably I think 2007/2008, when I first started getting more involved in pricing. I’ve been at PPS conferences every year. And so, kind of missing it this year. You know that last one in Las Vegas, I wouldn’t have thought that that’d be the last time we’d see each other for a while. 2020 is obviously been a challenging year for everyone, right? Running an organization like yours that is heavily focused on events and networking and kind of in-person training and things like that must have been really challenging for you. So, can you talk a little bit about how your organization have adjusted your plan in response to the pandemic and how you’re tracking against that plan.
Kevin Mitchell 3:50
This year, of course, has been an adjustment for PPS because what we are best known for would be our really big major conferences where everyone in our discipline gets together for conference keynotes, breakouts, presentations, our exhibit hall to learn the latest and greatest and things like that. So, with this adjustment, and this was really more perspiration than inspiration. I mean, decisions were made for us. This year, an in-person event as we’ve been used to for the past 30 years is simply not going to happen. So, I am lucky in that regard and that the PPS team is very experienced. But also, we’ve got enough agility and youth and new ideas where we were able to take our events virtual and although it’s not exactly the same field as being in a large hotel’s ballroom with 556 people all around, listen to presentations and getting together and meeting for receptions and things like that, we have been able to replicate big parts of that through our virtual events.
Also, we’re lucky as a result of the last big economic shock that we had, you know the great recession of 2007/2008/2009, maybe 2010 depending on your industry and geography, we invested heavily in building up our online training options. Because again, people lost their travel and training budgets, which is where a lot of our revenue would have come from. So, we had to make a change back then. And that put us in better stead for this shock to our system. Because at least for pricing people, we’ve got a bank of online training options for you and your team.
We’re used to doing virtual summits. And we’re used to doing webinars and things like that. So, we made the shift and had a virtual conference, you gave an excellent presentation on the future of pricing teams. And we had, I believe, 40 speakers, several hundred attendees. And one of the good things about virtual is it can kind of have that nice long tail. So, recordings are still available. So even though our event ended a few days ago, as we’re recording this, it will have a long tail, and people can still go back. And if they want, if they missed out live, they can still go back and see the presentations on demand, you know, on your own schedule.
Silver Linings in the Pricing Playbook
Gabe Smith 6:04
And you talked about some of the kind of that the last recession had kind of prepared you. So, there’s been some positive outcomes from this, right, environmental outcomes, you know, more, some people are getting better work/life balance, spending more time with their families. I know, my personal situation is, you know, I put probably at 150,000 road miles last year. I think I had 30,000 between January and March 12. And I think about five since then. I just took my first business trip last week out to South Carolina of the year, since the pandemic. Tell me about from your perspective in the pricing world in your organization. But let’s start on a positive note and talk about what you’ve seen in the pricing industry as a positive outcome of 2020.
Kevin Mitchell 6:43
What we’re seeing companies do is take a deep breath. And rule number one is don’t panic. And rule number two is kind of remember who you are. Remember your pricing strategies. Remember who your company is, remember who your customers are. And remember that actions have consequences. And panicked actions can have, obviously, some very adverse effects down the road. And one difference between 2020 and 2009, that I’m seeing from a pricing perspective, is back then everyone was under the impression that if we discount more, if we cut our prices, if we throw in a lot of things behind our offer, our margins on a per sale, per unit, whatever basis, may go down, but our sales will increase and continue to increase and everything will be fine, we’ll be glorious. And we’ll be prepared for what’s next.
And of course, our actions have consequences. And so, if I’m Kevin Mitchell and Associates, and I drop off my prices, think it’s going to get my company more volume, Gabe Smith and Associates, my competitor, or my compatriot, may do the same thing, in which case, we’re simply kind of shrinking the pie and battling over smaller and smaller pieces, and really costing jobs. And I did see more of that in 2009 than I believe we’re seeing now. I think now people are adjusting their offerings. They’re saying, okay, there might be a separate offering for a more budget conscious customer, consumer, business partner or something like that. But that doesn’t mean that everything just drops to the floor. Because we have to think, don’t panic, we have to remember that our actions have consequences. And if others follow us down, then we may have started a price war, which hurts everybody.
Hiring, Firing, and Furloughs
Gabe Smith 8:32
You mentioned a potential loss in jobs. And at least from my perspective, I saw when this first hit, there were a fair amount of people getting cut across different disciplines and different industries. But certainly pricing was not an exception there. And there was a fair amount of people that that got either laid off or put on hold, which is kind of a nice way to say we’ll get back to you, I guess. But you’re not laid off, but we’re not sure. So, you’re just furloughed. I’ve seen that come back, though. It seems like recently, at least from some of the things that I see online, that there’s people are hiring again. What is your perspective on that?
Kevin Mitchell 9:05
Yeah, I would agree that there were quite a few people who were affected in March, April and May and still are being affected. I mean, we’re still seeing some of that. I think that this is a little different, and that you’re correct. With this situation, we do see things starting to come back. People are starting to realize the importance of pricing and revenue management and related fields and their effects on your company’s bottom line. And I believe that we are seen as a little bit more critical than we would have 10, 15, 20 years ago with previous shocks. The job market that I’m seeing right now is a bit of a pyramid approach where people toward the top of that if you are vice president level, director level and senior director level, something like that, then yes, there might be a longer job search if you were affected in the early days of a pandemic or by merging or acquisition or anything like that.
There do seem to be lots of opportunities with people building their team and enhancing their teams, and pricing becoming a part of product management, a part of marketing or finance or a connection with sales. And sometimes it may not be called pricing, or it may not be called revenue management. I’ve seen jobs from companies where I know that they’re basically pricing jobs. But they may be called, you know, something on a customer success team, on a margin team or something like that. So, there are a lot of synonymous terms, there is good opportunity, let’s say, at the analyst and manager level, of course, the higher you go up that pyramid, the longer the job search will be, but the rewards will probably be there also. But hopefully, we’re seeing a case where we are not having that big of a bite taken out of the job market for pricing professionals. And there are some new opportunities out there.
So, I would encourage everyone to stay focused, to look beyond things that simply have the word pricing in the title, job descriptions, a lot of them I know, you can look at them and go, this is pretty much a pricing revenue management job. For PPS members and others, you know, we have a jobs board, we have connections on LinkedIn, we have LinkedIn pages where people post jobs. So, remember to use all the tools available to you if you are in a situation where you are looking for your next opportunity there.
Assume Everything You Know is Wrong
Gabe Smith 11:18
Speaking of the importance of pricing, my last episode was a bit different than my other episodes. We had the opportunity to have the CEO of a company called Drift, that’s an engagement marketing platform and chat bot, David Cancel, who’s a serial entrepreneur. And one of the things that he had said when I was doing research is that assume everything that you know is wrong. And that’s kind of one of the things that he always encourages in his team and in the way that he brings products to market and adjusts them. And it’s kind of speaks to that, that iterative kind of agile approach. In the kind of lean startup approach. There’s an old saying, in product management, where I come from is, your opinion, while interesting is irrelevant. It’s kind of along the same line. So, I asked him, do you think that applies to pricing? And he said yes, and kind of explained how he thought it, it did. But I wanted to kind of get your take on that as someone that’s kind of deeper in the in the pricing profession.
Kevin Mitchell 12:09
From a pricing perspective, some things that we’ve already touched on that have been part of the business canon for years, we realize, you know, may not be 100% the case. I believe that probably all of us at one point or another had an economics course or econ 101 or microeconomics course, where we had the downward sloping demand curve from the northwest to the southeast, with price on the y axis and with quantity, or sales or volume or whatever on the x axis. And so, for years, we were taught that, essentially, you could drop price to increase demand or increase sales. And if you look at it from an industry-wide perspective, there’s certainly some truth to that, depending on the comparisons, and depending on the replacements that are available in your industry. But on an individual company basis, of course, that very well might not be true. I mean, there are a lot of cases where people at this point on the axis go, I’ll drop price five, or 10%, I’ll sell five or 10% more. And of course, one caveat that’s there is that almost always put you in a worse position, even if it’s true. And oftentimes it’s not true because of competitive response, because of your customers valuation of what’s going on. And because there are a lot of things that go on in the behavioral economics and in the brain here where it doesn’t work, where I can simply create demand by dropping price.
Gabe Smith 13:36
There’s definitely a game theory aspect to that. And in a B2B environment, it’s a much more complex decision. Purchasing behavior is not just driven by price. So, in a more simple, commoditized, B2C type of environment, that may be the case. And it’s much more than just an economic issue, right? It’s, as you mentioned, behavioral psychological. There’s a relationship aspect, there’s things like derive demand in B2B that means that there’s not going to be an increase in demand for my product, just because I lower the price, they need what they need. And it’s then it’s about the competitive response. And then, as you mentioned, a lot of times you end up with that race to the bottom, you’re just driving the margin out of the business.
And it’s it is very hard to even break even a lot of times, by reducing price in software platforms like ours help track what that response is, and kind of feed that back into the pricing to make adjustments faster than you can without it. One of the things that we often talk about is we talk about pricing as a journey, right and that it can always be improved on a Kanban or continuous improvement for manufacturing, you can apply those same techniques to pricing, and we often talk about it as this journey and with multiple levels in it. Can you explain to the audience about how Professional Pricing Society helps pricers improve their skills and help guide companies along that journey and take them to those higher levels of the promised land? The types of gains and can you talk about maybe some of your experience or what you’ve seen in terms of the gains from price optimization?
How to Build Your Pricing Skills
Kevin Mitchell 14:58
There are quite a few different ways that my organization and others in our space can help with that. One from Professional Pricing Society standpoint, from a PPS standpoint, we’re lucky in that since we’ve been in this part of the business world for decades, plural now that we have connections to the thought leaders, to the experts, to the academics, to the consultants, and software companies, to the senior practitioners, basically, to everyone in this space. And a lot of cases, we use specific experts, as faculty for our training programs. All of our events, all of our conferences, whether they’re in person, or virtual, or you know, perhaps in the next couple of years, a hybrid type of approach, will always have full day workshops, which will go deep in depth on specific issues within pricing. It could be pricing and sales, it could be revenue management and corporate success. It could be on analytics, it could be on negotiations, and so on, and so forth there.
So, through our training initiatives, we offer people basically a chance to plot their own path and decide which issues are most important to them. And basically, we have a bag of opportunities, a lot of options for you to basically plot your own path, pick which options are best for you, and do training on your schedule and do it in a way that’s best for you. Right now, I believe we are at around 55 online pricing courses, we add them all the time, of course. And that’s in addition to the dozens upon dozens that we would offer at our events, connected with our events through workshops, and things like that.
So, all in all, we probably have 100 options every year that that are available for revenue management professionals to train and to gain expertise there. Some other ways that we look at improving knowledge, and basically raising the skill level of pricing people is that PPS also has certifications, plural. Now, our main certification for revenue and for pricing is CPP, certified pricing professional. And this involves a good amount of work. Usually when people finish it, I get an email or a LinkedIn message for them. They’re like, I finished it. Now I’m tired. Now I’m going to go back and take a break and go back to my job. But basically, our certifications involve six specialized workshops or online training classes around specific issues, each of them have testing involved. And after that, you get study guides, extra reading materials, practice tests, a study group, access to an academic advisor and a lot of things. And then we start to prepare you for the CPP, the certified pricing professional final exam, which covers 11 modules in pricing, covers everything from soup to nuts, and basically is a great way to show depth and breadth.
A great way to show that you are going above and beyond the call, a great way to enhance your own career aspirations, for your management to show your dedication to the discipline, and also for your company a way to show results and to improve results there. And one interesting thing that, and I would imagine you have this issue as well, that my team and I have is we looked at pricing as a way to increase your margins and your profitability. And sometimes, we talked basis points. But sometimes we also talked percentage points. If you are able to increase your price effectiveness by a few basis points, or maybe a few percentage points, the impact of that on your bottom line is multiplied over and over depending on your contribution margins. Of course, for an average Fortune 1000 company, a 1% increase in your pricing effectiveness, basically selling things for $1 and one cent instead of $1, everything else staying the same, would increase the average Fortune 1000 company’s profitability by 10 or 11%.
And in some industries, it’s a lot, lot more, though the effect there the rewards there are there. Of course, it’s not easy to do through our organization and through others through systems and software like Pricefx and others, there are ways that you can improve there. But it’s very important that you definitely try to undertake those journeys. So yeah, I would challenge everyone. Even if you don’t have people with revenue or pricing or margin in their job titles, they can be sales managers, but still they make pricing decisions for a significant part of their day and their week, and how that flows through to your bottom line. So, it’s very important to do.
The Future of Pricing and the Pricing Professional
Gabe Smith 19:30
You talked a little bit about the virtual conference you just did on the on the future of pricing and I talked a little bit about that in Las Vegas. Actually, I was talking about the future of commerce and the future of pricing teams. Can you talk about what you see in the future of pricing and the future of the pricing profession or and how that’s been accelerated a little bit this year, how the pandemic is playing into that?
Kevin Mitchell 19:50
First of all, your presentation was great. And I was lucky I kind of nominated myself to be the moderator of your session. So, I got to sort of participate in it live with you. So, I was thankful for the opportunity there. And I would remind everyone that if you did register for the PPS virtual conference, or if you would like to definitely make sure to check out Gabe’s presentation on the future of pricing teams there, because he had some great things around digital opportunities, around the physical makeup of teams and some great information there. Other things that I think we are going to see coming up is with price brings importance. And it’s interesting there because senior management will continue to do what senior management got to become senior management if they’re left alone. But in a lot of cases, their boards and their Wall Street analysts and others are challenging them to focus not only on top line sales, but more on bottom line profitability. And of course, the juicy middle in between where you talk about margins and things like that. And because of this focus, we do hope to see more opportunities and more challenges for pricing and pricing adjacent teams.
So as a result of that, we certainly want to move in a direction where pricing and revenue and margin, you know, these terms become part of a company’s DNA, they become part of the company’s culture, they become part of the company’s processes. In addition to how much of our widget can we sell, at what price? What’s going to be the competitive response? What’s going to be the market response? What effect is this going to have on our bottom line? Just not how many tons of widgets can we get out the door this quarter. So yeah, I would challenge everyone there. And some next steps would involve using your internal data, using marketplace data, using customer data, and many others there to make the decisions that are best for you and your company, not only in the short term, but definitely think medium and long term as well. And pricing needs more corporate investment going forward. You know, this could be in people, it could be in systems, it could be in software, it could be in processes, it can be in training, career development, we need career paths and things like that. But I think that’s also one thing that we’re going to see in the future around this discipline.
And with that, of course, there are a lot of challenges facing people, if we had a, let’s say, if we had a connotation, or if people made assumptions about us, in general, it might be you know, very good at analytics, buried in data buried in spreadsheets, buried in pricing software, maybe not so much with the change management thought selling skills, salesmanship, connections with others, and so on and so forth. And it has to change, we have to be artists and scientists going forward. So yeah, we will need connections with sales, with marketing, with finance and operations, and others there. And we really have to look at becoming an introductory step that comes much sooner and much earlier in the product management process. There are a lot of opportunities, there are a lot of changes. Of course, from a consumer marketplace. And sometimes in B2B as well. There are lots of changes around ownership versus usership. And that was another one of a great presentation that, that we had at our event where if you are of my generation, for example, you know, you were brought up that you want to own the big house and a big car, and you want to own this and have all of these things.
And now what we’re saying with generations that are younger than mine, and maybe my generation as well is really it’s more we can these things do for me, I want what these things do, you know, I don’t want the in the old Deming process, you know, I don’t want to own the hammer the nail, I want a series of holes or something like that. At first, that changes how we do products. And that changes how we do pricing where it’s not necessarily my widget. Now it’s my widget services, or software or data feeding back into you, feeding back in a couple different directions instead of just owning the widget itself. So yeah, lots of changes, lots of things happening in the future. And yeah, we are definitely in a transition.
Gabe Smith 24:02
One of the reasons for our success has really been that we just really focused on being cloud native, and just all in on that and all in on SaaS. And we don’t have a lot of the baggage that comes along with having them on premise and people owning the software and having a certain expectation around that. So, it just has really huge implications, not only the way that you price, but the way that you service customers the way that you develop products, the way that you can roll them out. Speaking of software, one of the things that I said in the in my talk about pricing teams was all companies are becoming software companies to some extent, right.
And I’d say that, you know, in pricing specifically, we are seeing, I think more and more usage of AI, of analytics of embedding software in the quote, to cash process to make it more efficient, be able to move faster. Do you think that’s true? I mean, do you think that that’s going to be an increasingly important component of pricing professionals is to not only understand how to do the analytics, the other thing I was talking about is like, it’s about figuring out what the model to build and what data to have and figuring out that piece. Not necessarily what problem to solve, it’s not about putting numbers into an Excel sheet and coming out with a solution. It’s about figuring out what the problems are to solve now and how that’s going to change in the future and how to develop the right capabilities as an organization, because a lot of problem solving is going to be more and more done by machines.
Kevin Mitchell 25:14
I love the statement that all companies are software companies, it’s just a question of whether or not they realize it or where they are along that, that slope there. But yes, that’s happening. And in addition to Software as a Service, you know, I’m hearing PaaS instead of SaaS, the Product as a Service, I wouldn’t even know how to pronounce it, but XaaS, anything and everything as a service. So, there’s a lot more around servitization, that was a hard one for me. And around software. And yes, eventually, all companies will have that as part of their DNA as part of their processes. You know, it’s 2020, now. If you have not gotten into a basic e-commerce, then there are a lot of bricks and mortar companies that are unfortunately, probably seeing huge declines in favor of those that are. So yes, that connection is simply in the 2020s is going to be the way that we do business.
How Businesses Can Align Across the Whole Organization
Gabe Smith 26:08
I also kind of view 2020 as the year of direct to consumer in many regards, right? You already had seen some of these trends happening and more omnichannel focus for traditional companies that may have sold through more traditional channels in the past. But I mean, you’re seeing a massive expansion and investment in in direct-to-consumer business models. And I think that has huge implications to pricing. A lot of times we talked about others B2B pricing over here, and there’s B2C pricing over here, that whole distinction is going away. And it’s really about customer focus, right?
To go back to what David Cancel said, the reason why you want to assume everything that you know is wrong, is because you should really be talking to the customers about what they want, where they want to buy, what the value is, what pricing strategies make sense for that. And it can vary by depending on you know, where you are, right? The classic example is, you know, I’m okay paying $5 for a bottle of water in a hotel room, but not at the grocery store, even though I could probably go get it for free, you know, out of the sink, not only packaging is important, but the placement that aspect plays into this as well value as a service, right?
And so how do you align? How do you understand that customer value? How do you, you know, price come up with products and services that that align to that and then price them accordingly? And I think companies that are able to do that and have that as like a premise and be very customer focused and customer centric, they have an easier time in this kind of multidisciplinary aspect that you were talking about before and having those relationships because if everyone’s focused on the customer, and understanding all of these things about them, then you’re going to relate better as an organization, because you’re all focused on that. Versus, in some organizations, it’s like, okay, you know, sales and customer success or customer services, uber-focused on the customer, but then finance and operations and you know, other organizations are more focused on the dollars over here, and they’re not all singing off the same hymn sheet, and it causes a lot of conflict.
Kevin Mitchell 27:50
What’s interesting there is that the customer and their valuation of our goods and services needs to come earlier and earlier in all of our thought processes, and where an older manufacturing company may have said, okay, we’ve made this machine. And now we go out and market it, now we go out and sell it. And then we kind of see what works and maybe change the processes there based on customer feedback for version 2.0. For the next one down the road. Now that’s going to kind of be reversed, where everything’s got to start basically outside in from the company’s perspective where it has to start with, we know our customers, we can talk with our customers, we need to really figure out what our customers would value and then determine if it makes sense for us to build it and see where it would be in our product line and see where it is in our placement and see how we promote it and things like that, that thinking has to come a lot earlier.
And this is a case where revenue managers have a great deal to offer there. Because through their research, and through their discussions with the customer base, they may have a great initial idea of Okay, for our last product group, we found out that our customer base really valued features and benefits A, B and C, but we put all of our effort into D, E and F. So, if we can start thinking that way and move it earlier in the process, really it might do a better job of addressing customer evaluation, which of course affects everything from the top to the bottom, all the way down. So yeah, I would agree with that.
Diversity in Organizations
Gabe Smith 29:25
Another movement or another issue at the forefront of kind of society this year has been around the Black Lives Matter movement. And I don’t want to get overly political and I know this is a charged topic, but you are a black leader in a diverse organization. And I was interested to get your take on what you’ve seen this year and kind of leading up to it around this and if you’ve seen impacts in the pricing world or professional world in general.
Kevin Mitchell 29:49
Yeah, definitely. And thankfully opportunity to talk about that Gabe. And I think one thing that’s interesting is I see Black Lives Matter and I see what’s going on in America and around the world in 2020, is really more of a human rights issue than a specific political issue. And I think in our country, obviously, we have kind of a cyclical thing where, you know, we’ve gone from slavery to Jim Crow to open-and-out race discrimination to the fight for rights, to more recent attempts at equity and equality. And with each of these steps, obviously, there are a lot of people fighting for the changes. And also there are quite a few people on the wrong side of history who are fighting against these changes, as well. And specifically, I think you can see Black Lives Matter as the next step in human rights that follows these things from America’s history, from the world’s history, as well. And a few things specifically about the Black Lives Matter movement and about some of the other protests is that I could offer a very simple statement, the police are coming.
Unfortunately, that statement might mean something completely different to a completely innocent black or native or Latin American person than it may to a completely innocent, otherwise similar, white person. And it does and that’s wrong. And I think that that’s the gist of it. And really, that’s a kind of a human rights issue. It’s let’s treat human beings like human beings. If we go back, you know, to a 12-year-old kid, wearing a hoodie, eating candy walking home, if he’s black, does not provoke any more of a response than a 12-year-old white kid wearing a hoodie, eating candy walking home. Surely. But obviously, we have cases where it does. So, a very touchy issue, really about human rights, and seeing the equality and looking for equity in circumstances and realizing that this is a case where we are not being treated equally as human beings, and we should be. So, politics aside, let’s think more human rights than a political. Politics, we have enough there with what should go on in other parts of our economy in our world. But on this one, yeah, let’s make this one is a more rights issue and being treated as human beings.
Gabe Smith 32:32
Unfortunately, things do get politicized. And that’s why I made that statement. I agree with you that it is fundamentally a human rights issue. And one note I also wanted to get your take on is have you seen impacts of systemic racism or impacts of Black Lives Matter in the pricing profession? I mean, one thing that I’ve noticed is that there’s been more high profile moves to leadership in kind of a more focusing on diversity recently, there’s a PR aspect to that, unfortunately. Right. But it is progress, nonetheless. Right. So that’s, that’s positive in many ways. So, I’m just curious to get your take on it, since you have kind of a broad perspective across the pricing profession, and also as a leader yourself.
Kevin Mitchell 33:10
Yeah. Thanks. Thanks, again, for the opportunity there. And from a business perspective, obviously, we still have under-represented groups. And of course, in our pyramid, as we go up, that becomes more and more of an issue as we go higher and higher up that pyramid. And we have also seen that organizations that are more, quote, diverse, unquote, than similar organizations that are less so typically perform better. And of course, the reasons should be apparent. It’s because you get more viewpoints, instead of everyone kind of playing along to the same type of thinking or something like that. I mean, getting thought processes and getting expertise from others who are not like us, is a good thing. And I would definitely challenge anyone that would tend to disagree with that. And yeah, that one should be fairly easy to discern for yourself.
But in the business world, still, we have situations where with under-represented groups, there is a lot more opportunity. And I would challenge leaders to go outside of their own bubbles when searching for their next leaders and for people who are going to take their organizations forward. There was a horrible statement from someone, I think it may have been a CEO of one of our major banks. And this individual said that they had a very hard time finding minority talent in their organization, you know, promotable minority talent. And I was thinking, well, if that’s your viewpoint, then yes, it probably would become a self-fulfilling prophecy, so to speak. And the next leaders may not come from your alma mater, they may not habitate in your social circles, they may not do the things that you do, go to the places that you go, but they’re certainly out there. And a statement that there’s no minority talent out there in 2020 is absolutely ridiculous. So, I would challenge everyone to get outside of their usual processes.
Obviously, there are great organizations, you know, National Hispanic MBA, National Black MBA, and others. There are HBCUs, Historically Black Colleges and Universities that have great Computer Science and Engineering training programs where a very high percentage of the next generation’s leaders will come from. So, if that’s not part of your recruiting, then it should be going forward. And there are lots of opportunities for people out there to do better. And that is to get different viewpoints. And just keep this in mind, in businesspeople, salespeople, marketing people, senior leaders, we like to think of ourselves as being competitive, we want to win. And if we ourselves don’t go out there and look for that next generation, our competitors likely will. And if we are more homogenized, and they are more diverse, if they have more female representation, and you know, under-represented people, higher ups, on their boards, as senior leaders, then down the road, what’s that going to mean for your competitive nature going forward? It’s a way to improve, this is not something that should be done as a PR move, even though in a lot of cases, we’ll take what we can get, but this is a human nature business competitive move. If you are removing yourself from a significant part of the population and looking for your hiring and your next level employees. And you are limiting yourself going forward, plain and simple.
Gabe Smith 36:39
I think diversity breeds strength. A lot of it comes down to that customer focus as well, right? Your customers are probably diverse, the world is diverse, increasingly diverse. So, the people within your organization that are you know, trying to make decisions on how to serve that market should also reflect that market, you’re going to get better decisions as a result and better performance, as has been shown. So, I’m with you on that. We’re about out of time. Is there anything else that you’d like to add? In conclusion?
The Long Game in Pricing
Kevin Mitchell 37:01
Yeah, always good to talk with you, Gabe, I appreciate the opportunity here. And for specific issues that need to be addressed. I mean, let’s address them. From a business pricing perspective, I would certainly encourage everyone that these are tough times. But in tough times with more pressure on your margins, that potential 10 basis points, 1% improvement and pricing, be it through your systems, software, your processes, your people, that gets magnified, when things get tough. If your margins are squeezed, then Gabe Smith and Kevin Mitchell can tell you ways to work. So, make sure to take advantage of us, others like us, around this part of the business world and take advantage of what we have to offer, there. Certainly would encourage everyone that in a lot of cases, when things get tough from a business perspective, the first thing to go is training, recruitment, human resources, you know, kind of looking at the next level of where your next leaders are going to come from. And that, to me is the very definition of being pennywise and pound foolish, because that’s gonna leave you a big hole. And businesses, we do have to survive. So, we do have to be smart about our spending. And we do have to think about the next steps there. But the old adage I’ve heard, you know, what if we train our people, and they leave and go somewhere else, but the counterpart of that is what if we don’t train our people and they stay? If we don’t improve our systems, our processes, and we’re using, you know, the old monochrome green and white systems, 20 years of bad things like that, you got to stay current, you’ve got to stay up on what’s going on.
And you have to do business. And a lot of times when there’s a shock to our system, as there is now, we tend to think very, very, very short term. And we have to in some cases, we have to survive, and make sure that we can breathe and eat tomorrow and next week and next month. But this will end as all other shocks have and will in the future, there will be more shocks. And remember that our companies have long lifelines. We have strategies, we have value built up with our customer databases, we have things that we provide to the marketplace, or we wouldn’t be around. And we’re going to have to continue doing those and building on those. And we’re going to have to continue to not only survive this quick shock to our system, but we’re going to have to thrive in periods down the road. So, it’s easy to be short-term focus, but I would challenge all of us to remember a medium term and a long term are coming and the way things are going they will be here before we know it. So, thanks for the opportunity to talk with you and looking forward to more episodes of your podcast here. So, I’m looking forward to seeing what’s next.
Gabe Smith 39:45
Thanks a lot, Kevin. And thank you so much for attending Pricing Matters.
Kevin Mitchell 39:49
Gabe Smith 39:50
All right. Bye bye!