Improve Price Discipline and Value Capture at Our Company

Challenge

Our pricing is challenged by discipline and predictability in capturing our fair share of the value we deliver to customers.

Recommendation

Assign our pricing team to complete the Professional Pricing Society’s (PPS) Certified Pricing Professional (CPP) studies to expand their knowledge across the Value-Based Pricing Framework that spans the five areas of (1) customer facing execution, (2) price variance management and commercial policy, (3) price setting through customer research, (4) pricing strategy including competitive price response, price positioning, and price structures aka business model, and (5) pricing and corporate strategy.

Analysis

The pricing team is the glue for maintaining pricing discipline across the organization.

They are responsible for maintaining, distributing, and executing price discipline across the organization, creating a true line for price performance through sales, product, marketing, operations, legal, and finance.

A strong pricing team enables the company to predictably capture its fair share of the value it delivers to customers. It delivers the company resilience, agility, manageability, and profits.

Unfortunately, most professionals charged with managing pricing challenges did not come from a background that prepared them to address pricing questions specifically. They came from finance, marketing, sales, accounting, operations, or product, or elsewhere. While each of these fields touches pricing, they do not span the domain of methods and analytical techniques the pricing discipline has developed to address the array of challenging pricing questions. Hence, the professionals managing pricing are at a knowledge deficit regarding the best practices for managing pricing challenges.

Most MBA programs do not teach budding professionals the quantitative techniques and theoretical constructs for managing pricing challenges. Generally, pricing is treated as an input to sales and marketing, a result of adding a standard margin, or the outcome of market forces related to supply and demand. When pricing is discussed in academic programs, it generally is a single module within a broader course.

Pricing is a verb. It is a decision.

Just as most executives would state that their value proposition is a strategic decision, strong executives would furthermore acknowledge that pricing, which directly impacts the value proposition, is a strategic decision.

CEO’s and CFO’s are routinely grilled in earnings calls regarding their pricing actions. Pricing is an investor and board-level discussion point.

Pricing, the verb, is a strategic decision.

A rare few MBA programs teach pricing strategy. These programs cover the issues of price execution, price getting, price setting, price structuring, and pricing and corporate strategy. People completing these programs are primed for managing strategic pricing decisions, yet they may not be the right fit for the company due to a lack of industry and organization knowledge.

The CPP program is a term-long (30 hours of instruction) MBA-level course in pricing strategy taught by a world-renowned professor, author, speaker, and practitioner of pricing, designed to take high-performing, experienced, and educated professionals from other domains to become high performers for the company in pricing. It is an executive pricing course.

The core 30-hour CPP program covers:

• Market Research Techniques in Price Setting, both strengths and weaknesses of:
• Price Positioning and Perceptual Mapping
• New Product Development (NPD) and Pricing Challenges
• Price Segmentation
• Price Promotion Analysis and Management
• Price Guardrail Quantification for Negotiations
• Price Variance Management and Commercial Policy
• Pricing and Competitive Challenges
• Pricing Psychology
• Pricing and Corporate Strategy

This instructional material is followed by a 2-hour exam (4 hours to include those with learning disabilities). To pass the exam, one must study the material. The exam is rigorous. Students who fail to study, understand, and apply the material will fail the exam.

Along with the core CPP program, enrollees are required to take six elective modules. These electives could include an intro to pricing course or concentration on specific analytical techniques, industry-specific pricing methods, and organizational development. Many other topics are available and under construction.

Online programs, such as LinkedIn learning modules, lack the rigor, depth, breadth, and testing. The CPP program overcomes these weaknesses.

Elite university offered Executive Education Programs in pricing cover only a portion of the material in the CPP program as they are designed for a generalist, not a pricing professional. They also require onsite attendance, which could mean expensive travel at inconvenient times in the business calendar. In contrast, the CPP program is more comprehensive and flexible. It offers both on-site courses at the many in-person PPS Workshops and Conferences around the world and online courses which can be taken anywhere.

In consideration of the situation, and after considering the alternatives, I recommend enrolling the pricing team in the PPS CPP program to accelerate the company’s pricing capabilities and financial performance.