How does the rest of your organization view the pricing team?
Are you the “pricing police”? Do they perceive you as a roadblock? Has your team become nothing more than an obstacle that sales must overcome in order to get deals done?
Unfortunately, this dynamic is pretty common. It creates a lot of friction between pricing and other teams. And it gives management a negative view of the function.
It’s easy to see how it happens. When the sales team isn’t doing what you think they should, the natural reaction is to put in place a bunch of rules and processes that require them to do things the “right” way. Pricing starts insisting that they be allowed to sign off on deals before they go through.
But that just makes people irritated — and determined to find a way around the controls you put in place.
In our experience, a command-and-control model doesn’t usually work in B2B pricing. In fact, the more pricing teams try to tighten their grasp around deals, the more they find is actually slipping through without any oversight at all.
Why doesn’t this sort of top-down approach work?
B2B pricing is complex, and a lot of different players are involved. Sales, finance, marketing, and leadership all have strong opinions on what prices should be, and they all have a stake in the process. Making matters more difficult, the pricing team doesn’t usually sit above these other groups on the org chart. To put it simply, we aren’t the boss.
When pricing tries to impose controls, those other groups begin to feel threatened. As a result, they resist. And the pricing team’s job just gets harder.
Trying an enablement approach
A different mindset — something we call the enablement mindset — is often much more effective.
Instead of trying to police the other stakeholders, try to enable them. In fact, directly tell them that your goal is to enable them to succeed at their own goals. Come in as a partner, providing valuable tools, data, and frameworks.
This approach is usually more successful for several reasons:
- Builds trust: Nobody likes the rule enforcer. But when you are empowering your colleagues, you contribute to a culture of collaboration and mutual respect.
- Drives adoption: When other people feel like they are in control, they are actually more likely to do what you want them to. It’s a little like using reverse psychology to accomplish your goals.
- Strengthens influence: By enabling better decisions across the organization, pricing teams naturally earn credibility. That in turn leads to a seat at the table and a stronger voice in strategic conversations.
When you equip sales with guidance and negotiation tools, you’re enabling smarter, faster decisions that benefit decisions that benefit the entire organization. Instead of acting as the watchdog, you are essentially getting other people to supervise themselves. It gets you out of the business of looking over everyone’s shoulder, which takes a ton of time, and frankly, isn’t all that fun.
As an enabler, you’re helping the entire company become more effective. You become a partner rather than a gatekeeper. And that means people are going to be more interested in hearing what you have to say on a whole variety of issues related to strategy growth and innovation.
Learn more
We cover this approach in more detail in a couple of different webinars. Earning Pricing a Seat at the Table covers several different ways to leverage data and analytics as you participate in high-level discussions. It offers techniques, like the one covered here, for enhancing the profile, credibility, and influence of the pricing function.
Profitable Pricing Enablement delves deeper into the enablement mindset. It explains the concept in more detail, showing you how and why it works.
You didn’t go into pricing to become a cop. Making this one shift can help you become more effective and your job, while also making it a lot more enjoyable to go to work every day.
Earning Pricing a Seat At the Table
In this session, learn about bridging the gap between just executing the plans that are handed down to actually having a hand in developing those plans.
Profitable Pricing Enablement
In this on-demand webinar, you'll learn about the new "best practice" of leveraging data and technology to distribute pricing authority and control, without sacrificing improved pricing performance.
