Truce Or Friction
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Transcript of Truce Or Friction
Professional Pricing SocietyOctober 2005
© Linda Gorchels 2005 1
Truce or Friction: The Magic of Collaboration
Linda GorchelsDi t E ti M k ti C i lDirector, Executive Marketing Curriculum
Fluno Center for Executive EducationWisconsin School of Business, UW-Madison
Madison, WI USAAuthor of The Product Manager’s Handbook
[email protected]://exed.wisc.edu/marketing/
Goals for our time together
Improve price managementControl processes to reduce defectsControl processes to reduce defects
Rethink your collaborative effortsBreak down the silos
Deal with unavoidable ambiguityRedefine opportunities
© Linda Gorchels
pp
Professional Pricing SocietyOctober 2005
© Linda Gorchels 2005 2
Pricing factors
InputsPrice
OutputsInputs planning Outputs
© Linda Gorchels
Now let’s get to work on defects
What is a pricing defect?Which input or output has the most c put o output as t e ostvariability, the biggest impact on corporate goals, and/or offers “low-hanging fruit” for fast improvement?
Negotiated prices out of compliance with guidelines
© Linda Gorchels
Deviations between invoiced and final priceSpecific customer or segment prices inconsistent with segmentation policiesDeclining ability to attain share goals
Professional Pricing SocietyOctober 2005
© Linda Gorchels 2005 3
Diagram the related processReceive RFP from customer
Compile quotation informationCompile quotation information
Submit proposal to customer
Negotiate changes with customer
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Obtain approval for policy exceptions
Submit final offer to customer
Establish improvement metricsCreate a shared understanding of the expected deliverable here: improve the process to reduce theimprove the process to reduce the rate of price-related defects (as defined earlier).Gather, study and document data about the overall process as well
© Linda Gorchels
pas the steps in the process.Build collaboration & cooperation
Professional Pricing SocietyOctober 2005
© Linda Gorchels 2005 4
Need to break through the wallsPricers feel they
are the guardians of
Salespeople feel they “own” the customer relationship
Marketing people feel they have objective information
gprofitability
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Practice “yes, and….”
rather than
“ es b t ”
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“yes, but…”
Professional Pricing SocietyOctober 2005
© Linda Gorchels 2005 5
Practice authentic conversation
The ABC's of Authentic Conversation
© Linda Gorchels
Author: Patricia Ryan Madsen Author: Susan Willett Bird
Find opportunities in ambiguity
The very nature of customer experiences is changing, causingexperiences is changing, causing uncertainty in marketing strategy and pricingLook for challenges to “status quo” pricing
© Linda Gorchels
Emerging marketsDisruptive technologiesBottom-feeding
Professional Pricing SocietyOctober 2005
© Linda Gorchels 2005 6
And in the end …
Pricing will always involve science and art – and both benefit from processesart and both benefit from processesPricers will need to collaboratively bridge between departmental goals in establishing and executing structure, strategies and policies
© Linda Gorchels
A fresh perspective on ambiguous information may yield new insights into improved pricing