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The pricing journey is five stages where the role of the pricing manager and organization constantly evolves and changes from one step to another.
Stage 1: Sporadic
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Pricing
The pricing team does not exist, or the manager is a one-person show.
The pricing strategy does not exist structurally.
The pricing is not aligned between different departments.
Data is dispersed, not structured, and poorly analyzed.
30% of companies are at this stage (Source: The Journal of Professional Pricing)
What to do: start to gain control of what is going on in pricing. First, initiate change by introducing processes, tools that support new methods and defining pricing strategy. All that will bring the company to realize the importance of investing in data management and IT infrastructure change.
Stage 2: Managing and
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Enforcing Pricing Rules
The centralized rules are in place, and the pricing department tries to control the application of the rules.
Data is being structured and transformed for insightful analytics and strategy improvements.
Analytics are used to review and improve pricing rules and guidelines.
Cost-plus pricing or last-year price are the most common methods.
Sales are frustrated with strict rules and less flexibility to sell.
High focus on sales KPIs.
Struggles with change management and new pricing tools adoption.
40% of companies are at this stage.
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