Don’t Let Perfect Pricing Be the Enemy of Good Pricing

nathanlphipps

Nathan L. Phipps
Consultant, Wiglaf Pricing

Published November 20, 2020

I was recently reflecting on the aphorism “the perfect is the enemy of the good,” and I began to wonder how that pithy insight could be applied to pricing. As a recovering idealist, I recognize that, in any process, progress can require compromise. And sometimes it is better to get a series of small victories than it is to hold out for the pie-in-the-sky win that never comes.

After all, pricing is an essentially creative endeavor. Your goal is to create a better state of affairs than what exists currently. If you do not actually make progress and secure victories, then you may not be fulfilling your pricing purpose.

Now, to be fair, those pricing victories will come easier in some environments than in others. And just because you cannot implement your ideal solution does not mean that you cannot make progress. Take a moment to consider what may work.

Don’t Let Perfect Pricing Be the Enemy of Good Pricing

For example, I recently worked with a client in an industry heavily affected by seasonality. They needed a deal simulator so that their salespeople could accurately apply a complicated series of new rebates to customer pricing during sales negotiations. Unfortunately, the project encountered earlier delays, and we were fast approaching their industry’s customary negotiation season. It was feared that the simulator could not be built and implemented in time using the client’s existing technology platforms.

To solve the problem, I built a backup deal simulator in Excel. I trained the salespeople on how to use it, and they were able to proceed with negotiating their pricing using their brand-new commercial policy. The IT team will implement the better solution sometime next year.

It was better for us to get to “good” this year, and to shoot for “better” next year than for us to hold out for the “better” and lose all momentum entirely.

Make a plan, but be ready to update it

Mind you, I am not advocating intentional mediocrity. Quite the contrary. I think that we should aim high and push ourselves to accomplish as much as we can. However, there is also wisdom in acknowledging reality.

For messy pricing projects, you must triage: determine which pricing issues are causing the greatest problems with profitability. From there, consider which pricing issues actually have the greatest chance of being successfully addressed. Make a list of priorities from there and plan your attack. And, because pricing projects are generally dynamic, expect to update your priorities as new data comes in and as new analysis is completed.

Focus is key. Focus on solving the main problems and dig in until you have a solution that satisfies. It is also important to remember that if you spread yourself too thin, you will accomplish little. In my experience, it is better to be superb at one thing or pretty good at two or three things than to be mediocre in ten things.

Likewise, with progress: it’s better to carry one thing all the way across the line than to creep a dozen projects a few inches down the road.

Yes, we all hope for the day in which, after months (or years) of struggle, we arrive at our respective pricing utopia. But, alas! Reality is an incessant force, wearing down our best-case scenarios like a babbling brook eventually grinds down even the most substantial rocks into pebbles and dust.

Get your victories where you can, even if they are not your ideal victories.

Celebrate your pricing victories

Speaking of victories, never pass up an opportunity to celebrate a pricing victory with your team. It is important for morale.

We have all had those projects in which we just can’t seem to move forward. First there were data issues. Then there were communication issues. Now there’s a technical roadblock.

Sometimes pricing is a downright Sisyphean endeavor. But the fact that pricing is difficult turns it into our opportunity. So celebrate what you were able to accomplish today, and congratulate your team for digging in during a chaotic period. Rest easy knowing that tomorrow is another day, another opportunity to make progress.

Rest up now. But be ready to put your shoulder back into that boulder. Those pricing dragons will still be there for you to battle (and defeat) when the time is right. And what is most important is that you are making progress.

“Finish each day and be done with it. You have done what you could. Some blunders and absurdities no doubt crept in; forget them as soon as you can. Tomorrow is a new day. You shall begin it serenely and with too high a spirit to be encumbered with your old nonsense.”

― Ralph Waldo Emerson

About The Author

nathanlphipps
Nathan L. Phipps is a Consultant at Wiglaf Pricing. He is responsible for the training preparation and conjoint analysis that supports your company’s pricing project. Nathan will help craft recommendations to help your company manage pricing better. Before joining Wiglaf Pricing, Nathan worked as a pricing analyst at Intermatic Inc. (a manufacturer of energy control products) where he dealt with market pricing and the creation of price variance and minimum advertised price policies. His prior experience includes time in aerosol valve manufacturing and online education. Nathan holds an MBA with distinction in Marketing Strategy and Planning & Entrepreneurship from the Kellstadt Graduate School of Business at DePaul University and a BA in Biology & Philosophy from Greenville College. He is based in Chicago, Illinois.