What Happens To The Pricing Team When You Get Price Management Software?
Buying pricing software can be a scary prospect. It’s a big investment and requires a comprehensive change management plan to drive adoption. Once you mention that you might be getting pricing software, no doubt you’ll have questions from members of your team wanting to know what will happen to their roles in the company. And if you lead the team you’ll probably want answers to those same questions
At Pricefx, we’ve spent the last decade helping companies of all sizes across all industries to elevate their pricing strategies, fine tune their pricing processes, and excel in pricing execution. And we’ve seen first-hand what happens to pricing teams when new pricing software is brought into the mix.
Change isn’t always comfortable. There will be repercussions. In this article, we’ll share the impact pricing software can have on your existing pricing team.
Is Pricing Software Worth the Disruption?
Do you remember 2018? How light we all were, how carefree!
Since then, we’ve been in constant turmoil. With a global pandemic leading to major supply chain disruptions, raw material shortages, major cost increases, sudden fluctuations in demand, and changing customer behavior. This was followed by a promising economic recovery cut short by the devastating war in Ukraine. “Unprecedented” has become our new “just another day in the office”.
Now, more than ever, companies need to code resilience into their pricing strategies.
They need to be able to re-price in an instant to ensure margins aren’t being absorbed into latency.
They need to be maximizing profit from each and every transaction by pricing at the customer level. And they need to be on the lookout for every opportunity and be positioned to leverage it.
Can you do all this without pricing software?
The Day-In, Day-Out of a Pricing Team Without Price Management Software
It all starts with a wild goose chase, hunting data from multiple disparate systems and disconnected teams and aggregating it all to enable at least some visibility of what’s actually happening.
This is the last you’ll see of the outside world for a bit while you move your very existence into Excel in order to make essential connections between all that data spread across multiple files. You run big lookups and have to wait while your computer considers your request. If it does (and doesn’t go on strike half-way through), then you end up with massive files that contain all the data you need to finally start thinking about how you’re going to use it. Will you price products based on inventory levels or historical sales by customer? Which of your products are on contract and by how much? Are you even able to raise prices on those?
Trying to make sense of all this data manually can take weeks, sometimes months. And once you’ve cracked it, you have to start working with the rest of the organization to review and ensure the prices make sense to them and that everyone understands the potential impact. Of course, you can’t simply send the CEO your pentalogy of numbers and hope they get the idea; you have to spend time translating all your clever workings into more palatable human communication tools like graphs and charts.
A basic price increase could mean four months of collecting data, two months making sense of it, and one month actual pricing.
Does this sound familiar? If yes, imagine this…
More Accurate Pricing Done in Minutes
A pricing solution is designed to take over all the tedious (error prone) manual work, to streamline convoluted processes, and to automate lengthy workflows and approvals. This will ensure your team is working with utmost efficiency and are able to achieve more accurate prices faster.
More accurate pricing will ensure that you’re always relevant and competitive in the marketplace, more transparent to customers, and that your pocket price reflects your profit goals. Faster pricing means repricing can happen much more frequently. In fact, with dynamic pricing, you can set your pricing solution to respond automatically to input data from raw material indices to ensure your prices are always fluctuating in line with costs and you’re never losing margin to latency.
That’s all great (pretty amazing, actually, although let’s not get ahead of ourselves) … but where does your pricing team come in?
Pricing Teams Are Integral in Designing a Solution Aligned with Your Needs
The first thing to consider is that implementing your pricing solution, no matter how easy the vendor makes it sound, will require quite a lot of input from your team. Because the more data that goes in, the more specifically rules are set, the more precisely processes are designed, the more useful the solution will be in meeting your exact and unique pricing needs.
This will all keep your team very busy in the initial phases of implementation.
However, once your pricing solution is up and running, next time they come to pricing products, it does all the hard work for them.
It streamlines collecting information, setting up prices, reviewing, collaborating, and puts it all into dashboards for visualization… automatically!
Saving literally MONTHS of time.
Which circles us back to… What will you team do once it’s all set up?
The Value of Your Pricing Team EXPLODES When You Have Pricing Software
Many are concerned that pricing software will do to the pricing team what video did to the radio star…. But, it doesn’t: instead it creates video stars.
As discussed, pricing software will streamline all your current processes, significantly reducing the amount of time your team wastes getting lost in files and plotting data points. This frees up their time and brains to focus on leveraging the tools of your new solution to identify better, more strategic areas of opportunity.
Uncovering new opportunities will immediately generate work (more challenging, creative, career-defining work) for your team that translates much better into value for your business. What’s more, they’ll start connecting and collaborating with other parts of the organization, like Purchasing to enable even more proactive pricing around cost changes, or Finance, to hone in on strategic goals.
A team with pricing software gains capacity to tackle bigger fish. It might take a little while to get up to speed with this, but typically within six months, your requests of the team will have progressed from “Who has the latest Excel file”, and “Upload this into the ERP” to “How will willingness to pay for this product in this customer segment be impacted by a price change?”, and “What is the optimum combination of rebates to offer this customer to ensure desired profitability for us?”
You Won’t Want to Lose A Single Member of The Team
We’ve racked our brains and the only reason we can think of that your pricing team would have reason to fear incoming pricing software is around change management. If they feel scared to change the way they’ve always done things, unsure about making the transition, or unmotivated to take on the challenge of becoming better pricers, then there may be some difficult terrain ahead. But with good change management practices, this can be avoided entirely.
Pricing software is going to shake things up, for sure. Considerably.
Current processes and workflows will soon be unrecognizable. Your team will be working at a whole new level. They can start creating differentiation across multiple customer segments, drive different pricing initiatives for different products in the market, do more value-based pricing for some of the key products in your portfolio.
Your pricing team will be super busy, and the work they’re doing will be much more impactful. Pricing software increases capacity…. You might find that all of a sudden you need more people but not because pricing software is complicated. If used well your team might be able to uncover value and opportunities that support your organization. What’s not to like?
Your Pricing Team Will Never Be The Same Again
Pricing resilience requires pricing software. You simply can’t expect to weather the storms that this decade is clearly committed to throwing at us relying on manual pricing in Excel. It might do the job for now, but it’ll never be a driver for value because it’ll never point you to areas of opportunity for key products in your portfolio.
Will pricing software impact your pricing team? Absolutely. In ways you cannot imagine. But they’re all good. You free up their time and expertise to uncover opportunities you never knew existed and to drive real value to the business and the bottom line.
If you’re interested in learning more about the key roles you need on your pricing implementation team, then click on the link below for our in-depth article.