You don’t need a super hero…you need a system.
I ask all of my clients the same question – “How will you manage your pricing after I’m gone?“
Usually, they say “so and so” will run point and own all things pricing, or something similar. That is not a bad place to start, but more ideally, you need a pricing system that will outlast “so and so” and help build a repeatable system.
“Building a pricing function is a lot like building muscle – you need form and repetition”
So what does a pricing system look like? Much of it is covered in my book, Street Pricing, but to add more color, I like to boil it down to what I call the three Cs – Centralize, Cadence, Connection. Let me elaborate on each briefly:
Centralize
House all pricing-related material online and make it easy to access – avoid using a random excel spreadsheet off of someone’s laptop. At least use something everyone can access on the cloud, like G-Suite, Office 365, Confluence, Sharepoint, or anything along those lines. Start with a basic folder structure and turn on notifications to keep the site active. This is a fundamental step to establishing your pricing function because above all – You need a source of truth.
Cadence
Schedule regular pricing reviews and integrate pricing as a dedicated topic in business updates and management meetings. Hold pricing committees at least quarterly, but start out monthly for the first quarter to work out all the kinks. Meet more frequently if information is changing or if there are lots of moving parts, such as when you’re releasing new features or when you’re entering a new market. In order to make this new cadence stick, remember to build a rhythm that goes with your culture.
Connection
Connect your pricing discipline across functions like product management (roadmaps), sales/GTM (compensation, value selling), marketing (messaging, competitive position), and finance (forecasts, margins). If you establish a Centralized source of truth and a Cadence that goes with your culture, connecting the dots becomes far easier. Start a pricing artifact matrix (think RACI-ish) that calls out each pricing artifact and the responsible function – this keeps transparency high to avoids one of the top killers of establishing a pricing function – solo heroic efforts done in a vacuum. Bind your company’s connective tissue to make it natural for the business as a whole to think about pricing, not just one person.
Download this Roles and Responsibilities Matrix to give you head start.
Building a pricing function is a lot like building muscle – you need form and repetition. If you follow the simple 3C model I laid out, you will hit the ground running and be a step ahead of the pack. Give it a shot and drop a comment on how it worked. Better yet, share some ideas that worked well for you!
I leave you with this – A super hero will save the day! But a good system will pave the way.
Good luck and let us know if you need help! For more tips like this, you can follow us on LinkedIn or Facebook.
