Advising the Certified Pricing Professional Program for CPP 4.0
2020 will mark the release of the fourth generation Certified Pricing Professional (CPP) program, and I am proud to be the Academic Advisor to the Professional Pricing Society (PPS) charged with its development. But what qualifies me to be the Academic Advisor to the Professional Pricing Society? What have I done as the Academic Advisor? What does the CPP designate? What challenges does it qualify professionals to address? And what is the quality, validity, and integrity of this designation?
My relationship with the Professional Pricing Society began in 2003 when Eric Mitchell, the Founder and former Chairman of the PPS, invited me to speak at a Las Vegas conference on pricing in the software industry. While working on various software and technology projects in Prague, Czech Republic between 2006-2007, I had the honor of speaking at The PPS Annual Conference on European and Global Pricing. In 2008, I returned to DePaul University in Chicago to teach Pricing Strategy to MBA Students as an Adjunct Professor.
As a professor of pricing, I tried various teaching materials in the classroom. Unfortunately, they fell short. My goal as a professor was to prepare students to enter the field of pricing as an analyst or manager upon graduation. This would require them to be skilled in a variety of quantitative and qualitative forms of pricing analysis. While combining a number of Harvard Business School cases and articles with the extant books covered the needed breadth of subjects, my students were overwhelmed by the quantity of material and the differences in vocabulary, notation, and mathematical derivations between authors.
To address the observed learning challenges, I wrote Pricing Strategy: Setting Price Levels, Managing Price Discounts, and Establishing Price Structures, a textbook published by Cengage (2012). Shortly after publication, it received academic acknowledgment for its veracity and suitability in the Journal of Revenue and Pricing Management. In 2013, Dr. Sarah Keast wrote: “This book by Tim [J.] Smith spans the disciplines of marketing, economics, strategy and decision making, to provide a practical guide to pricing strategy for practitioners and students alike. … Tim [J.] Smith successfully combines the theories and methods from marketing, economics, strategy and decision making in one very accessible text on the strategies and methods of effective price setting.”
Concurrent to my successful textbook research, writing, and publication, the Professional Pricing Society asked if I would serve as their Academic Advisor in 2010. Initially, the role focused on recording an online introduction to the CPP 2.0 exam. CPP 2.0 material was published in the form of a book and an exam was taken in-person at PPS conferences. It had been compiled and prepared in 2008 by their prior Academic Advisor, Richard Lancioni.
I soon found similar challenges with the CPP 2.0 material as I had with my prior classroom teaching material. In 2014, the Professional Pricing Society and I agreed to undertake a major overhaul of the material and exam. CPP 3.0 material consisted of the first half of my successful textbook, Pricing Strategy, plus two other modules produced separately by Richard Lancioni and Stephan Liozu. The material was published in the form of an e-book and the exam was administered online.
Concurrent to this improvement, the preparatory courses leading into a person sitting for the CPP 3.0 exam were organized into a rational curriculum to encourage pricing professionals to take a variety of courses in preparation to address the breadth of challenges one may encounter during their career.
CPP 3.0 has been lauded by professionals across the globe. With more than 1,600 designees, the CPP itself has become the globally recognized designation that certifies competence in pricing analysis and management.
With such success, why change it?
Much has changed in the past eight years. While the core concepts taught in the past remain true, the language we use regarding pricing has evolved and the subject matter required to address managerial pricing challenges has shifted and clarified. Moreover, the teaching methods for online courses have evolved beyond sharing an e-book and a few summary slides into having the entire course and exam online within a modern Learning Management System (LMS). To address these improvements in distance learning and subject matter, it is time to publish the next iteration of the Certified Pricing Professional material and exam.
The Certified Pricing Professional Designation
Just as accountants complete the Unified Certified Public Accountant Examination to indicate they have met state qualifications regarding tax laws, and as the Chartered Financial Analyst is a globally recognized designation that certifies competence and integrity in financial analysis, the Certified Pricing Professional Examination is a globally recognized designation of having met industry qualifications of competency in pricing and price management.
The CPP designation is an accomplishment. It designates a person as being prepared to address pricing questions with a variety of methodologies, across any business sector, and throughout an offering’s lifecycle and the organizational lifecycle. It covers pricing for Consumer Packaged Goods, Retail, Distribution, and Manufacturing. It spans both products and services. It is a rigorous, industry agnostic, course in the fundamentals of pricing.
Breadth of the Certified Pricing Professional Examination 4.0
CPP 4.0 covers price setting, price management, and strategies for improving corporate pricing. It has been divided into eleven learning modules:
- Economic Value to Customer
- Elasticity and Profit Sensitivity Analysis
- Customer Perception Driven Pricing
- Price to Value Perceptual Mapping
- Pricing and New Product Development
- Price Segmentation
- Price Promotions
- Price Performance Measurements
- Pricing and Competition
- Psychological Influences on Price Sensitivity
- Pricing and Corporate Development
All learning material has been included in slides with a voice recorded exposition of the concepts.
At the end of each module, a summary is provided to remind CPP candidates of the key points followed by five sample questions to prepare for the exam.
After listening to and reviewing all individual lectures, candidates are provided a 110-question online exam. The exam tests candidates on both quantitative and qualitative issues in pricing. The CPP 4.0 exam difficulty is such that anyone diligently completing the online learning experience will still find the exam taxing yet doable, and those that attempt to skip the online learning experience are highly likely to fail.
Certified Pricing Professional 4.0 Integrity
In preparing the fourth generation CPP study material and exam, three guiding principles were applied.
One: a solid mixture of quantitative and qualitative skills. Demonstrated quantitative and qualitative pricing skills are required by employers for individuals entering the pricing profession, and a successful career in pricing requires strong development of these skills. Pricing professionals are required to perform a wide variety of quantitative measurements, interpret quantitative data, and drive quantitative decisions. And, pricing professionals are expected to understand broader qualitative and business strategy issues. As such, CPP 4.0 increased the examination of quantitative pricing analytics and enhanced instruction related to pricing and corporate strategy.
Two: all content is based on research, published in peer-reviewed academic or management journals. Pricing professionals are leaned upon to drive fact-based decision making in organizations in which many peer colleagues will have an opinion or vested interest in specific decision outcomes. To enhance confidence in the CPP designation and the pricing analysis and recommendations of a CPP designated professional, the content is unbiased and academic/industry proven.
Three: clear definitions of terms. Pricing has developed its own vocabulary. In the past, a single concept may have had two to five different terms. For pricing to continue its evolution as a profession and industry, it is necessary that we coalesce on the meaning of words to enable communication and coordination.
My hope is that CPP 4.0 will be embraced even better than CPP 3.0. Even though the CPP designation is the only globally recognized pricing designation, only a small fraction of the people that would benefit from this material and designation have been reached.
I expect CPP 4.0 will be released in the coming quarters. I anticipate this version will remain in use for the next few years. Updates and upgrades, which are more easily accomplished with the current learning management systems, will be undertaken as necessary.
Successful completion of the fourth generation Certified Pricing Professional exam will designate you as being competent in the fundamental aspects of price management and prepared to addressing pricing challenges in any competitive industry. Your career awaits.