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Cliff Isaacson:Cliff Isaacson joined Syncron in 2018 as Director of Strategic Pricing. His specialties include technology product management, applied pricing and inventory optimization, analysis and operations research, enterprise software marketing and sales, SaaS, customer integration and technology implementation. Cliff earned his BS Computer Science from Northwestern University and MS Industrial Administration from Carnegie Mellon University.
Read the first part of Cliff Isacson's article, as found on the SYNCRON blog, below.
People inherently understand the value of good service. Who can forget a trip to Disney or a stay at a world-class hotel – their first truly outstanding experience where customer service went above and beyond? But who also remembers a truly bad service experience – whether it was heard from a friend or seen as a viral internet joke? The adage still holds true: one bad customer experience can negate the value of ten good experiences.Price is a key success factor in service, particularly in after-sales. If you have ever had your car or computer repaired by the company you bought it from, then felt the frustration of finding the same repair service for a significantly lower price at another repair shop, then you know how important price can be. It can impact your loyalty to the brand, future purchases from them and your consideration of other options for future repairs and service. But it isn’t just anecdotal examples of service experiences that show the importance of good service. Service has become an increasingly important source of revenue and growth for manufacturers. Industry studies have shown that Original Equipment Manufacturers (OEMs) average 25 percent earnings before Income Tax (EBIT) on service, versus the 10 percent for new equipment. A Bain & Company benchmark survey even showed that service contributes an average of 22 percent of total revenue, but an average gross margin of 39 percent! Service revenue is expected to double by 2020, rapidly turning it into a growth engine for manufacturers and a source of revenue stability.
So, why do so many industrial goods manufacturers underinvest in service pricing?I’ll admit, service pricing can be a complex problem to solve. Manufacturers need to manage a large assortment of parts across a broad spectrum of fast movers and slow movers, commodity parts and complex replacement equipment, unique OEM parts and simple parts available from multiple vendors. Then, there’s the added complexity from pricing across regions, channels, markets, customer types and a value chain that can span all the way from corporate, to the dealer network, to end customers. The traditional approach to pricing is a cost-plus methodology, a model that applies a markup after a part’s cost is determined. OEMs frequently hesitate to increase prices on these parts, given their already high margins compared to their finished goods, leaving behind untapped revenue and margin. High volume parts with lower negotiated or manufacturing costs end up with a lower price, frequently resulting in underpricing and lost margins and low volume parts with higher manufacturing costs get a higher price, resulting in greater competition. This paradox creates a self-fulfilling cycle of high prices and low sales, driving dealers and consumers to lower-priced after-sales substitutions, and OEMs to underprice services to drive part sales. A better pricing approach uses a value-based pricing methodology that considers the unique aspects of service parts. A McKinsey study recently recommended expanding OEM after-sales lifetime value by re-pricing spare parts more dynamically. With this data-based approach, OEMs can achieve 3-10 percent EBIT margin improvements from better pricing for the long tail of a service parts assortment – supported by an incredible 80% of service champions that employ value-based pricing models. To truly understand value-based pricing for service parts, it’s crucial to understand the differences in product lifecycles between service parts and finished goods. For an in-depth look at both typical product lifecycles and the associated service pricing, Cliff Isaacson shares more in the second published post on the Syncron blog! #PPSDALLAS18 Breakout presenter during our Spring Pricing Workshops and Conference event in Dallas, Texas! Continue reading
View all of the #PPSD17 video clips by clicking the image below:There were a few new initiatives launched during the Fall Conference as well. We held the first gathering of INFUSION: a pricing initiative committed to supporting diversity and inclusion for women & minorities in the pricing industry.
Click the image below to read the INFUSION blog postA featured luncheon with a panel discussion was organized by executives and Infusion Group Leaders Nolwenn Godard (Paypal), Hillary Gretton (BD) and Susana Lopez (Medtronic). Attendees were engaged and open, sharing their professional experiences and personal hurdles. The event was a great success!
To take a look at the #PPSSD17 Infusion Video clips, click HERE!
We also hosted a Town Hall event - granting attendees a direct interaction with several of our Keynote Speakers.
The pricing experts spoke to specific strategy questions in (four) areas: Digital Transformation, The Role of Senior Executives, and Building Resources In Pricing.
View the full (and growing) Photo Album on our Facebook Page:THANK YOU goes out to our excellent Team members, event staff, the outstanding staff at the Hilton San Diego Bayfront, and all of our Workshop Presenters and Keynote Speakers. We could not have pulled off such an event without your professionalism, dedication, and hospitality. Did you attend #PPSSD17? We want to hear from you! Leave your feedback below or visit our Facebook Page to share your feedback! Did you miss out and ready to plan for 2018? Here's a peek at where we're traveling next year. Click the image below to sign up for the Pricing Workshops and Conference Email List for our event notifications! Continue reading
“The CPP experience has been great. The program was professionally setup, and gave me new knowledge, new tools, and inspiration for how to do my daily job even better.The face-to-face training I was lucky to participate in has given me a broader network within my own country, and I now have peers in different industries that I can share ideas with, and get further inspiration.” - Marianne Gynde, MedtronicSince 2003, individuals like Marianne have joined the elite designation of the Certified Pricing Professional and used their knowledge to impact the field of Pricing. The CPP certification program is the standard for advanced knowledge and expertise in the field of Pricing. Carrying this designation indicates knowledge and skills in pricing across industries, and is achieved through any combination of online courses and live workshops at our yearly conferences. The certification is maintained by completing 2 credits every 2 years after the initial certification. The re-certification helps PPS maintain the integrity of the program and keeps each alumni informed on current trends and best practices. About The Professional Pricing Society: The Professional Pricing Society (PPS) is a member association of professionals committed to distributing pricing expertise throughout the business world. We provide leading-edge pricing and revenue management best practices. PPS produces up to five major annual pricing conferences in Europe, North America, South America, and Asia. PPS also offers more than two dozen, full-day training workshops every year, taught by leaders in the pricing community. These workshops serve as the foundation for PPS’s Certified Pricing Professional (CPP) designation. For more information about the CPP Certification Program, please contact: Michael Tatonetti +1-770-509-9933 firstname.lastname@example.org Continue reading
Listen as Jason Philip, Syncron’s Head of Expert Services shares how companies can master service-parts pricing to boost revenue in this #PricingPodcastLeading manufacturers from around the globe are now optimizing their service parts pricing to deliver dramatic improvements to the top and bottom lines. Jason Philip of Syncron details how the right price, for the right part, in the right market, can drive service parts revenues up by 5 percent, while driving gross profits by 7 percent!
In this #PricingPodcast, listeners will learn:
Click on the image to listen to the #PricingPodcast:About Jason: Jason Philip is responsible for implementing Syncron’s pricing solutions for the company’s customer base, working in global and complex environments. He has implemented solutions around the world, including North America, Japan, Jordan and Europe. Prior to joining Syncron, Jason was a product manager and designer for PTC (previously Servigistics). He received his Master’s Degree in Industrial Engineering from Georgia Tech in 2010. To hear more incredible speakers and to learn pricing strategies directly from the experts, register for the 29th Annual Fall Pricing Workshops and Conference event in Dallas, TX! Continue reading
This premiere forum for North East Ohio Configured Manufactures covers everything industry leaders need to know about the pricing landscape for 2016. Packed with unique strategies to maximize profits, learn more to get ahead of the competition!
Register TODAY to take advantage of complex business strategies!Both Lydia and Adrienne will be featured speakers during our Spring Pricing Workshops and Conference in Chicago, IL, May 2016! We highly recommend taking advantage of these opportunities! To learn more about the Configured Manufacturers Workshop please visit Pricingempowered.com or CapitalPricingConsultants.com. Continue reading
PPS Online Education Course: Organizing Pricing For Success
with Stephan M. Liozu Ph.D, CPP
Check out the latest Online Course Offering!Description: Organizations and their leaders often struggle to design the right organization architecture for their pricing function. They face issues on where to locate the pricing team, how to allocate the reporting responsibilities, how to engage cross-functional collaboration, and how to raise the intellectual capital in pricing. In the end, a lack of a good organization design combined with an inadequate culture leads to more frequent pricing project failures. Pricing practitioners and pricing leaders should pay close attention to these organizational and human dimensions of pricing in order to create the right team culture and the right pricing training agenda. This unique one-day workshop combines the latest science in pricing organizational design, in change management for pricing, and in socio-technical pricing capabilities. Participants will receive both theoretical knowledge and practical tips on how to set a successful pricing team and how to improve their collaboration culture with respect to pricing. Attendees Will Learn:
Stephan M. Liozu is a creator, a disruptor, a designer, a creator and an innovator. With over 20 years of experience in business, he has recently focused on design and creativity in value and pricing strategies. Stephan has worked for both Fortune 500 companies and family-owned business. He earned his CPP designation in 2009 and recently achieved the Prosci® change management certification.
Over the past few years, Stephan published academic articles in the Journal of Revenue & Pricing Management, Journal of Business Strategy, MIT Sloan Management Review, and Industrial Marketing Management as well as in the Journal of Strategic Marketing.He has also written several articles on strategic pricing issues for the Journal of Professional Pricing and is a regular presenter at Professional Pricing Society conferences in Europe and North America as well as the Strategic Account Management Association conferences.
The co-author of Innovation in Pricing – Contemporary Theories and Best Practices (with Dr. Andreas Hinterhuber) published in the fall of 2012, he also authored “The ROI of Pricing” that will be published in January 2014. Stephan holds a Master’s degree in Innovation Management and earned a Ph.D. in Management from Case Western Reserve University. Stephan sits on the Advisory Board of LeveragePoint Innovation, 360pi, and of the Professional Pricing Society.
Register TODAY and take advantage of this Pricing Course!PricingSociety.com Continue reading