Building Credibility as a Pricing Manager (Director or VP!)

Credibility is a key to success for any manager.  If you aren’t viewed as credible, you won’t be taken seriously and will suffer from a lack of power and control.  You won’t get the resources you need to get the job done.  This is a serious problem if you are a pricing manager.  To execute good pricing strategy and tactics, you’ve got to work across the other functions of the firm.  You’ve got to interact with sales, marketing, product marketing and finance to get the job done.  Without credibility, managers in those functions won’t do the things that need to be done to make pricing a profit powerhouse. 

What breaks my heart about the current economic situation is the number of pricing managers we’ve spoken to who are struggling to improve the profits in their respective firms.  We’ve also spoken to a number of pricing managers who seem to be getting the job done.  They’ve gotten ahead of the need to develop positioning statements for the sales force, they’ve worked with sales and marketing to make sure that excessive goals aren’t driving pricing and profits down.  They’ve worked with senior executives to make sure they aren’t falling prey to desperation pricing–especially at the end of the quarter. 

Pricing managers that aren’t credible are frustrated that people don’t listen to them.  This gets in the way of executing effective pricing.  That’s too bad because effective pricing is what saves jobs during a recession.  Effective pricing focuses on holding on to each an every profit dollar that can be eked out of this struggling global market.  It makes sure we aren’t sacrificing profit dollars for a sales or market share goal.  It makes sure salespeople are selling rather than discounting and it makes sure that our costs are in line and are being viewed properly when it comes to setting price. 

It struck me that what distinguished between those two groups of managers is that the effective pricing managers had credibility in the organization.  When they spoke, people listened.  They were viewed as effective managers who could drive better pricing practices throughout the firm.  No, they weren’t viewed as perfect, but they were viewed by senior and junior executives alike as someone who should be taken seriously for the good of the firm. 

So, that leads me to five bits of advice for pricing managers who are frustrated by your lack of credibility: 

1. Be willing to start small: If you don’t have credibility, you’ll never get the big projects approved.  So, pick something small to do.  And, make sure you do it well and get it done on time.  Work on a better pricing matrix, simplify pricing policies so salespeople understand them, work with a sales team on a big negotiation, or even a small negotiation.  Credibility rests on assurances that you know what you’re doing and can get the job done.  Be willing to start small and grow your successes over time.
2. Work at strategic and tactical levels.  Yes, you need better pricing strategy but without better tactical execution, strategy will never yield benefits for the firm.  So, pick and choose your battles but be willing to pick the fruit of profits where you can reach the branches.  You may need to prove yourself with better execution and tactics before you tackle the larger strategic projects. 
3. Take responsibility for your work and the work of your team.  A lot of managers think that this undermines your power but it actually builds it.  Good leaders take the hits and do better.  It takes a good leader to build a firm’s pricing capabilities.  So, take responsibility for both the problems and the results.
4. Track and talk about small successes.  Don’t expect others to “notice” the results you achieve.  Document your wins and use the insights from those wins to build the “burning platform” for the firm.  If you helped a sales team close a more profitable order, put it on a spreadsheet and report the results to senior executives.  Be willing to start with anecdotes as you build the data for a more compelling story.
5. Speak their language.  As pricing has gotten more specialized, the words we use are getting bigger and more specialized.  Talk about value, beta’s and correlations won’t get you anywhere with salespeople or senior executives.  Salespeople want to know how to close better deals. Senior executives want to know how they are going to get more profits and revenue.  Listen and use the words they use and you’ll become more credible and more effective.

 This is not a complete or exhaustive list but it is a start of things to think about to get the focus you need outside of pricing to get the profit job done in the firm.  Unfortunately, it doesn’t happen over night either.  The credible pricing managers we know have taken years to develop the credibility they need to get the job done.  If you already have credibility, go for it–think big and bold.  If you don’t, try a few of these ideas and you’ll be on the same road that the ones who already have credibility have walked.  It took them time and patience but it did and does work.  Good luck