Recently, we’ve been focusing quite a bit of attention on Product Management and their contribution to pricing performance. As a result, many of our subscribers are now recognizing that certain deficiencies in Product Management have been hampering their ability to command more profitable prices in the marketplace.
For many, it’s been very frustrating to discover that the pricing performance “box” they’ve been struggling mightily to escape was actually created long ago by shallow processes and subpar decisions in Product Management. It’s a bit like playing a game for years…working really hard to win…only to learn that the game has been rigged against you all along…by people on your own team!
While it’s definitely maddening, most who find themselves in this situation realize…eventually…that these deficiencies in Product Management are most likely due to ignorance rather than malicious intent. These pricing practitioners also recognize…eventually…that turning their frustration into corrective action is a far more productive path.
For example, through the Help Desk, we heard from a team leader who is considering lending some of her pricing people to Product Management:
When I met with the head of Product Management, he agreed that the value-based processes I was talking about would be a big improvement. But he wouldn’t commit to anything, saying that his resources were already stretched to the limit. Because we’re launching new products all the time, this is really important. So I’m thinking about lending a couple of my people to Product Management to make sure that the right things are happening. I’d appreciate any advice or suggestions you can provide.
Wonderful! She’s not accepting excuses or taking “no” for an answer. And she’s being flexible and thinking creatively about how to address the problem. Her attitude alone tells me that she WILL get this fixed…somehow…some way.
And the solution she’s contemplating is a good one. After all, we’re aware of a number of companies that have “parachuted” pricing people into Product Management. And in almost every case, the approach has produced stellar results in the short term, while laying the groundwork for fundamental change and improvement over the long haul.
To be most effective, however, there a couple of caveats:
- The people you lend to Product Management really have to know their stuff. You can’t just send entry-level folks or people who just happen to have some free time. To have the intended impact and influence, you need to be deliberate about lending people who really know the “to be” processes and practices inside and out.
- The people you lend have to be very clear about their real mission and objectives. For this to have lasting effects, the people you lend can’t just see themselves as pairs of hands. They need to understand what they are really there to do—i.e. teach others about the crucial concepts and get better processes embedded into the Product Management function.
If you’re thoughtful about it, parachuting pricing paratroopers into Product Management (say that five times fast) can be very effective.
That said, it’s just one way to address these types of deficiencies and there are many other approaches that have also proven to be effective. You just have to figure out which approach makes the most sense, given your specific situation and circumstances. And even then, you’ll probably have to adjust your approach a few times along the way.
Take a lesson from our Help Desk user…
Don’t just get mad or frustrated about the deficiencies in Product Management that are making your job harder than it needs to be. Instead, try to channel those frustrations into deliberate corrective actions. And plan to keep taking different actions as necessary until the deficiencies are corrected…somehow…some way.
Better Product Management for Better Pricing
In this on-demand webinar, learn how leading pricing teams are influencing the pre-market decisions that can increase pricing pressure and limit the prices you can command in the market.
How to Price New Products
In this on-demand webinar, learn about three common types of new products that pricing teams are likely to encounter, and explore the core strategies and processes for dealing with the realities associated with them. Hint: "Best practice" is not always realistic.
The Fundamentals of Value-Based Pricing
Value-based pricing is like any other business practice in that most of the power comes from mastering the fundamentals. In this on-demand webinar, learn the core concepts and essential processes that generate the most bang for the buck.
