When Pricing, Don’t Forget Your Story
When I first started my career as a pricing professional, I was under the impression that my pricing analysis would simply speak for itself. I would take the time to crunch the numbers and to create striking visualizations that would guide management in their decision making and lead them to the optimal solution. Management would be impressed with my impeccable equations. They would simply affirm my results, congratulate me on a job well done, and then point out the direction of the next dragon for me to slay.
What I did not count on is that executing a quantitative analysis requires a different skillset than communicating the results of that analysis. It is an insight that I am sure that many pricing professionals can confirm.
Shepherding a management decision can be difficult. Without a story, it is nearly impossible.
Start with your quantitative analysis
Pricing professionals must deal with numbers. Standard transactional analysis will involve analyzing prices (both invoice and pocket), quantities, rebates, discounts, and costs. Any topic with numbers can be quantified, and we use these numbers to represent reality. Quantitative analysis applies mathematics and statistics to these numbers to provide insight into prior events or the prediction of future events.
However, you cannot just throw your numbers into a few equations and walk away. Your true goal is to provide context and facilitate management conversations to drive pricing decisions. Mountains of data visualizations alone cannot drive pricing decisions.
You must make your audience care, and you do that by answering why. Why are these results important? Why does this impact us? Why does it matter?
For every single slide, your audience will be asking, “Why are you showing me this?” So, you must begin your presentation with “why?” in mind.
Find the compelling pricing narrative
The trick is to find the story in your data. Where is the compelling narrative? By applying storytelling to your data, you will be able to have a more meaningful impact on your audience in less time.
People do not remember numbers. People remember stories. People are inspired by stories. Stories engage people emotionally, and that can be an impetus for change.
Finding your pricing story is important. Human brains do not react to data the same way they react to stories. Storytelling has deep roots in the human psyche, eliciting responses that were developed thousands and thousands of years ago. Anthropologists have found that all cultures engage in storytelling. Before the written word, people passed down their histories using stories.
At the most fundamental, a story has 3 parts: 1) how things were before (i.e., the status quo), 2) something happens, and 3) how things changed after. So, look at all the players in your story. Look at the data. Determine what changed. And find the story that your facts support.
Storytelling tactics for pricers
Not everyone is a natural storyteller, but storytelling is a skill that you can practice. There are many tactics to tell better stories. First, you can add some suspense or a cliffhanger to your story. Suspense will keep your audience focused on your narrative. Draw it out. Built it up. Spice up your story with details.
Second, tell your story with empathy. Always be aware of the human element and strive to bring that to the forefront. Using empathy will connect you to your audience. Connecting to your audience makes it more likely that they will bond with you and trust you. If you can, speak to your audience’s experience directly. And be vulnerable enough in your storytelling that your audience can live vicariously through your experience.
Finally, use humor if you can. Humor puts people at ease and can help to break the tension. Naturally, keep the humor appropriate, and recognize that humor take practice. In a high-stakes meeting, you may want to shoot for a base hit instead of swinging for the fences.
And always be mindful of the makeup of your audience. You will want to present a different story to a panel of technical experts than to the executive team.
Pricing professionals have many tools in their toolboxes, but I advise all of you to not underestimate the power of storytelling in your projects.
Thanks to the Professional Pricing Society, I will have the opportunity to share more of my knowledge of the importance of storytelling and finding your pricing story at the PPS Fall Virtual Conference in October and the PPS European Virtual Conference in December. I hope to see you there!