The Professional Pricing Society’s (PPS) annual spring conference in Chicago is the perfect playground for data-driven marketers, analytical pricers, and efficiency focused program managers.
At the conference earlier this month, we talked about tactical methods for price improvement, discussed how to collaborate with sales, and challenged age-old economic theory.
One question that came up in in a workshop I presented and then again throughout the conference was: “If you lower the price, will they come?” In more clinical terms, the question challenges a basic view of economic elasticity that dictates your volume will increase in correlation to your price decrease.
Rory Sutherland (@rorysutherland), executive creative director at OgilvyOne, debunked this theory in his opening day keynote, noting that “the worst thing you can do is to underprice a superior product.”
In fact, there are five key things that appear nowhere in standard economic models: status, certainty, autonomy, relatedness, and fairness. For example, a branded product may offer me certainty in a product’s quality that I would not have with an alternate choice. Relatedness refers to how consumers make selections in reference to the other choices in the immediate transaction, i.e. when offered best, better, and good enough options the selection is often the “better” option, an interesting reflection on many consumer’s opposing fears of high cost and low quality.
Other sessions discussed how important it is for a pricer to get out of the office — and I mean this as a euphemism for becoming more engaged with other core departments and business functions. Some of the most popular sessions were those that touched on influencing sales. As a former pricer myself, I realize I spent far too much time with my head in a spreadsheet instead of considering all of the influences on pricing beyond what’s captured in a contract or transaction.
At PROS, our approach provided tools that consider both the pricer’s objectives as well as the salesperson’s objectives to maximize the successful outcomes that help your business to realize both your revenue and profitability goals. PPS is moving in this direction as well with dedicated programming focusing onconfigure, price, quote (CPQ) and its role in price execution.
Like just about every other transactional business process these days, data-driven analytics for CPQ is a hot topic, but there is often a significant spread between what is advertised and what is actually delivered. PROS is participating in a PPS webinar on Wednesday, May 18 at 12pm EDT on data science and CPQ. We will discuss some of the exciting analytics trends in CPQ as well as try to separate myth from reality. The webinar is open to everyone and you can register here.
About the AuthorMore Content by Valerie Howard