1 month → 1 day
Time to run a market-wide price increase: decide, update every ERP price, send customer price letters
2:30
David Pacut, Pricefx, Senior brand and creative lead
6:52 Brad Onofrio, Director of Commercial Excellence, Clumet The full conversation
0:12What does commercial excellence mean at Calumet?
My name is Brad Onofrio. I’m Director of Commercial Excellence at Calumet. What does commercial excellence mean here? I bring tools, techniques, and training to the sales force and the commercial organization so they can do their jobs more effectively and we can serve our customers better. An example of a tool would be a CRM system or a pricing system.
A lot of my work is longer-term and project-based, but I have to offset that with tactical work. I do sales training; I’ve trained all eighty of our sales reps in a particular sales technique. So I mix my day between long-term project work and shorter-term tactical work, like an issue we need to address in SAP.
Why does change management make or break a pricing rollout?
If you don’t do a good job getting everybody on the bus, then your bus is going to go off the road. At Calumet we firmly believe in a crawl, walk, run philosophy, mostly because any organization can only handle so much change at a time.
What does it take? It’s understanding that some people will want you to run from the start, and others won’t even want to crawl. It takes constant communication and different techniques for different groups. You’ve got a CEO who wants results now. You’ve got a sales force that has always sold a certain way and asks, ‘why would I change?’ Reaching all of them is a huge part of the job.
How do you price through cost volatility?
It’s about understanding the fundamentals of your business, so that when volatility strikes you don’t have to convince people the costs are right. If a steel tariff is going to raise our costs by a known amount, you were already confident in your steel costs, so the price move carries a confidence level.
We’re used to volatility at Calumet because crude is a major feedstock. You have to get the fundamentals right to account for it.
Where are the biggest pricing opportunities?
The first is leakage. Through rebates, discounts, and promotions, how much of the price you charge leaks out the back end?
The second is the mechanisms we use to move prices up and down. How effective are they? Is ultra-low-sulfur diesel a better index than gasoline or jet fuel? Beyond the pricing waterfall and leakage, we look at how well our mechanisms hold or grow margin as raw materials move.
How did you choose a pricing tool, and why Pricefx?
You want to see whether the tool has the flexibility your company needs. Most pricing and CRM software is capable, but some is more flexible than others, and I find Pricefx extremely flexible. At Calumet we sell everything from commodity solvents to highly specialized lubes and esters, so the pricing system has to cover that range. I also look hard at implementation: does the firm doing it match the culture of your company?
We had an on-prem system that was fine, but only half the business used it. The other half needed flexibility and features it didn’t have. With the old system a market-general increase took nearly a month. With Pricefx it takes a day, including the decision, the ERP price changes, and the price letters to every customer. We wanted more flexibility and more performance, and we got it.
Why does pricing excellence matter?
If a company treats pricing as an afterthought, that’s a problem, unless it’s a startup growing so fast that day-to-day pricing isn’t yet critical to survival. For an established company, pricing excellence is crucial to growing, if not to simply staying alive.
Building volume to grow takes roughly three times the effort of changing your pricing. Knowing where your prices sit in the market, how they compare to competitors, and what value you bring lets you capture extra value. Do it poorly and you won’t grow.
