Whether you're starting from scratch or optimizing the way your existing teams are organized, these steps can help youestablish a successful pricing function: It’s time to explore how to organize your teams to ensure effective pricing. Let’s take a step back and consider the role your teams are expected to play in pricing, both in broad terms and in specific responsibilities. As pricing is a crucial part of maintaining profitability, teams in charge of pricing must align the pricing strategy with corporate growth objectives. They are tasked with continually optimizing prices to meet revenue targets. This breaks down into specific responsibilities, including: Guided by the pricing roles and responsibilities, you can identify the necessary skill sets your business requires to effectively execute pricing. While the specific setup of your pricing function will be determined by your business needs, it’s important to consider these essential skills and identify any skills gaps. Let’s debunk a common myth before we continue. Based on steps one and two, you might think you need a large pricing function to be successful. But it all depends on your organization’s size, pricing maturity level, and what automation tools you have in place. As you might expect, large enterprises usually have a larger pricing team while small to medium-sized companies have to make do with smaller teams.1. Define pricing roles and responsibilities
2. Ensure you have the necessary pricing skill sets
3. Determine the right setup for your pricing function
Pricing maturity level also plays a part. For instance, companies with a high pricing maturity level typically have a dedicated pricing team. Businesses that are less mature in their pricing capabilities may not have a dedicated pricing team and instead rely on collaboration across departments. As is often the case, pricing can sit across many different teams including Category Management, Digital, Ecommerce, Marketing, Sales, and Finance.
Automation is another key factor. If a business has the right pricing automation tool in place, a smaller team can scale to do more.
4. Create a pricing decision-making process
Once you’ve decided on pricing responsibilities, you might assume the teams will simply make calculated and informed decisions. However, without a strategic process in place, they may make siloed decisions based on gut instinct. To establish an effective pricing decision process, you should take the following steps.
Implement pricing guidelines and policies
Create and implement pricing guidelines, discount policies, and approvals. Establishing pricing guidelines and discount eligibility maintains price integrity and prevents excessive discounting which can lead to margin leakage. Having clear criteria and thresholds that define when pricing decisions require approval enforces consistent decision-making and accountability. Ensure that all pricing policies are complied with across teams to mitigate inconsistent pricing practices which result in revenue loss and missed profitability targets.
Establish clear communication channels
Set up regular meetings, check-ins, and dedicated chat channels among key pricing stakeholders to facilitate effective price management and cross-functional collaboration. This helps avoid working in silos, tackles challenges, and aligns the pricing strategy with departmental goals.
Foster a data-driven pricing culture
Empower your pricing professionals and departmental stakeholders with access to pricing-related data, including historical prices, inventory data, customer data, and competitive intelligence to enable them to make contextualized decisions. A data-driven pricing culture leads to informed pricing decisions, improved profitability, and competitive advantage.
5. Invest in the right pricing software
The way you organize your pricing function is crucial. Managing large amounts of data, dynamically updating prices, and ensuring consistency across channels while adapting to market changes can be overwhelming, especially for smaller or less established teams.
Pricing software can be a lifeline by automating these manual tasks. It also allows teams to focus on more strategic tasks, including refining pricing strategies, differentiating prices based on customer segments, forecasting demand, and competitive analysis.
WithPricemoov’s next-generation pricing platform, you can tap into a comprehensive array of pricing capabilities to help your team scale and manage your prices more efficiently.
- Centralize your data and access real-time insights to make accurate and timely pricing decisions
- Manage all your prices in one place simply and efficiently
- Optimize your prices with powerful data science and end-to-end automation
- Deliver prices to any channel or system seamlessly
- Enable your sales team to win more deals with increased margins and reduced time to quote
- Monitor and analyze your pricing performance for continuous optimization
- Collaborate with all pricing stakeholders in your organization on a single platform
Ready to take your pricing to the next level?
The way you organize your teams to execute pricing has a strong impact on your bottom line. By following the steps of defining roles and responsibilities, identifying skills gaps, determining team size, creating processes, and embracing automation, you can build a successful pricing function.
At Pricemoov, we help businesses manage and optimize their prices to protect margins and drive revenue growth.Contact ustoday to unlock your revenue potential with intelligent pricing.