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Unlock Six Sigma Pricing

UNLOCK THE HIDDEN PRICING FACTORY

Companies have the power to implement pricing capabilities needed for sustained profitable growth - Six Sigma Pricing. Navdeep Sodhi, Managing Director of Sodhi Pricing, is our featured guest blogger sharing expert advice on how to unlock potential in your business.
The State of Pricing Within every company exists a hidden pricing factory that holds the key to shore up customer trust, employee confidence, competitiveness as well as the pricing capabilities needed for sustained profitable growth. It is remarkable how far a little pricing discipline goes to make this happen. Instead, most companies seem to manage Pricing as a fixer-upper house where, somehow, external appeal take precedence over ongoing house-keeping and maintenance. For instance, exterior painting adds nothing to the dwellers’ comfort or to the value of the house if the water pipes inside are leaky or the electrical systems are out of code. Every company, much like the fixer-upper, needs external as well as internally- focused improvements, but one without the other or in the wrong order is simply wasted effort. The Hidden Cost Factory Thirty-plus years ago, manufacturers discovered a hidden factory for controlling overhead costs. Historically, overheads had been taken for granted in conjunction with labor costs. But when decades of increased automation shrank labor costs so much that overhead costs were exposed as a glaring 100-200% of labor costs. Companies decided that such a huge burden (ratio of overhead and labor costs) for maintaining waste was too large to be affordable or acceptable. This unleashed a wave of waste-elimination and continuous improvement efforts using quality tools like Lean, and Six Sigma which were adopted in non-manufacturing environments as well. The Hidden Pricing Factory Overhead costs are brought under control by reducing scrap, overtime, rework, overproduction, excessive inventory and such. The notion of higher quality at lower costs gets enthusiastic support from any organization. Interestingly, price execution also relies on repetitive operational steps or processes that need to work in tandem — efficiently and effectively. Pricing processes are prone to getting out of control because of all sorts of internal and external changes, such as changing customer needs, competitive moves, or regulation. Irrespective of industry, the hidden pricing factory is built upon ad hoc and short-focused pricing decisions, gut feel rather than analysis, and unclear roles and responsibilities which adversely impact customer loyalty and the company bottom-line. Therefore, continuous improvement tools used as cost control measures can also improve pricing execution. Pricing processes are prone to getting out of control because of all sorts of internal and external changes, such as changing customer needs, competitive moves, or regulation. Irrespective of industry, the hidden pricing factory is built upon ad hoc and short-focused pricing decisions, gut feel rather than analysis, and unclear roles and responsibilities which adversely impact customer loyalty and the company bottom-line. Therefore, continuous improvement tools used as cost control measures can also improve pricing execution. The Cause For Poor Price Execution Ironically, internal stakeholders on the revenue side seem to harbor divergent views regarding the hidden pricing factory. Whether minding the “invisible hand” of the market or self-serving agendas, they arrive at sub-optimal decisions that often sidestep company’s interests. Therefore, even when pricing strategy is sound, pricing execution fails to deliver to its full potential. For instance, offering one-off terms to customers which require manual intervention in every transaction make invoices error-prone and the customers upset. Since senior executives often approve such deals but get rarely involved in the execution, they remain unaware of such problems. This may explain the adoption of radical changes in strategy or organizational structure as their obvious choice when it comes to fixing pricing problems. Larry Bossidy, as President International at Honeywell and later its Chairman and CEO, recognized this in his book, Execution:
“My job at Honeywell International these days is to restore the discipline of execution to a company that had lost it. Many people regard execution as detail work that’s beneath the dignity of a business leader. That’s wrong. To the contrary, it’s a leader’s most important job.”
Why Six Sigma Pricing Given the added organizational complexity for pricing, continuous improvement tools, such as Six Sigma and Lean, need to be adapted accordingly. While the five phases of Six Sigma–Define, Measure, Analyze, Improve, and Control – remain as such, the definitions and scope can change. For instance, the definition of customer needs to reflect the goals of an internal business leader who champions process improvement. Hence, the name Six Sigma Pricing. As illustrated in my co-authored book and Harvard Business Review article, Six Sigma Pricing is not designed simply to be a statistical solution. It is more relevant as a framework for creating alignment between people, processes, and systems and to draw in leadership support. Whether a company has existing Lean or Six Sigma capabilities or not, there are tools for identifying root causes for prevailing problems and for prioritizing improvement actions. It is more relevant as a framework for creating alignment between people, processes, and systems and to draw in leadership support. Whether a company has existing Lean or Six Sigma capabilities or not, there are tools for identifying root causes for prevailing problems and for prioritizing improvement actions. Roadmap for Profitable Growth Companies can start by picking low hanging fruit rather than chasing impossible goals at the get-go. Cross-functional stakeholders team up to review evidence that supports setting shared goals and collaborating on execution. Thus illuminated, the once hidden pricing factory is now accessible through prioritized set steps on a roadmap. With careful consideration of failure modes, that is, pre-empting possible missteps, agreement on metrics for tracking and control, smart companies can achieve sustained profitable growth within weeks and months. Click to view the original post by Navdeep Sodhi. For more pricing education and to learn in-person at our Workshops and Conference, join us in Dallas, Texas this Fall for #PPSDALLAS18! Click the image below to learn more. Continue reading

Harnessing Big Data For Better Pricing Results

Pricing strategies, like big data, can be key to improving profits in business. According to a study conducted by McKinsey & Company, even a 1 percent price increase can translate into an 8.7 percent boost in operating profits (assuming no loss of volume). However, companies continue to fail to price their products and services appropriately, and as a result, take a hit to their bottom line. Watching companies lose revenue in this manner is particularly troubling considering the flood of data now available to assist businesses large and small. For those able to simplify big data's complexity, the reward is substantial. Now we're not suggesting leveraging artificial intelligence is easy. In fact, the explosion of digital customer touch points has made it quite challenging for companies operating in a range of industries to keep their price points on pace. However, by failing to uncover and act on the opportunities big data presents, many businesses are leaving millions in profit on the table. Want to know the secret to increasing your organization's profit margins? Harness big data to find the best price for your products and services. Is your business overwhelmed by big data? For example, if your company is comparable to Amazon, you have thousands of products to competitively price. As the company's pricing professional, it is your responsibility to help determine the optimal price a customer is willing to pay for those products. Maybe you've considered leveraging big data to gain insight into customer behaviors and market trends, but sifting through such a significant amount of data is overwhelming. Therefore, you continue using manual price-setting methods. We have all used manual pricing processes, but the problem is that these methods are tedious, time-consuming, and at times ineffective when compared to the robust analyses and lucrative cross-selling opportunities you can uncover with big data. With artificial intelligence, you can determine a consumer's specific needs, the value they place on particular products and use that information to equip sales representatives to close more deals. 3 Steps To Turn Big Data Into Profits If you're a part of a company that has massive product numbers, then getting comfortable with big data is critical. These three steps can help you get started. 1. Listen To The Data - With artificial intelligence you can analyze a consumer's purchases, predict their future buying decisions and use the data to price your product higher based on value consumption. By listening to the data, you can also analyze buying behaviors to determine the willingness of your consumers to pay X price for a particular product or service. 2. Embrace Automation - Analyzing price points for thousands of products is too expensive and time-consuming. By using automated systems, you can explore narrow customer segments, determine what drives value for each one and match your findings with historical transactional data. With automation, you can also replicate and tweak data analyses, so you're not starting from square one every time. 3. Collaborate and Communicate Regularly - Setting new prices is as much a communications issue as an operational one. It's important that your pricing team works with sales representatives to explain the reason behind price recommendations and to show them how you leverage a particular price. By doing so, your sales representatives will trust the prices enough to sell them to consumers. Equally important is developing clear communications plan to provide a pricing rationale that highlights product valued and then tailoring those arguments to the customer. Bottom line: to get the price right, we suggest helping your organization explore the advantages of big data to avoid suffering the high cost of lost profits. To learn exclusive tips on ways to prevent your organization from leaving millions of lost profits on the table, click the link below to learn about our Virtual University just for CPP Alumni!
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PPSMIA Event Recap - 28th Annual Spring Pricing Workshops & Conference

We had an incredible time during the 28th Annual Pricing Workshops and Conference event in Miami, FL - below is our #PPSMIA Event Recap! Workshop attendees soaked up intensive pricing knowledge throughout Tuesday and Wednesday. We held a Latin American Summit, the first of it's kind, featuring pricing experts speaking to LATAM industry-specific subjects led by Susana Lopez, Fabio Freitas, Guillermo Leal, and Manuel Osario. To celebrate the close of the Workshops and start of Conference, attendees were invited aboard the Venetian Lady for a fabulous yacht cruise! If you weren't on the Yacht Cruise... you missed out.    

Click the image below to view Video Clips:

Thursday, May 4th, marked the start of the Pricing Conference and hearing from captivating Keynote speakers including Karen Berg, Tom Nagle, and Steve Haggett. Attendees learned the industry's best strategic shares during the (4) Breakout Session Tracks: Pricing Practitioners, Pricing Experts, Tools and Techniques and CPQ/Sales Operations. Thursday was also the eve of Cinco de Mayo and the wonderful PROS Reception, where pricing professionals in attendance networked and mingled amongst our Featured Sponsors. Everyone had a great time enjoying the Mexican-themed catering and music! Friday's powerful Keynotes set the ending tone for a Pricing Conference few will forget. Overall, attendees raved about the amount of learning, great connections made and daily fun had during #PPSMIA!

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Maybe it was the great weather, the excitement from first-time attendees (welcome everyone!), the incredible Speaker presentations that readied pricers for new seasons in business, or the memories made in the evenings at the host hotel and throughout the city of Miami. Either way... #PPSMIA was an epic success!

Click the image to view the collection of #PPSMIA Tweets

Thank you to everyone that made sure #PPSMIA was amazing! A special "thank you" to the hospitable staff at the Hilton Miami Downtown! We are busy planning our 13th Annual European & Global Pricing Workshops and Conference event in Barcelona, Spain! Click the image below to learn more:

Can't make it to Barcelona? Plan now for Spring in Chicago!

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How Machine Learning Works In Pricing - PricingPodcast

In this #PricingPodcast Alex Shartsis of PerfectPricing details how machine learning will impact the pricing industry and improve business. The term "machine learning" is popular within the pricing industry at the moment, but what do pricing professionals need to know? How can this trend translate from a buzzword to improved business for various industries? In this new #PricingPodcast we talked with expert Alex Shartsis to learn:
  • What is machine learning?
  • How does it currently impact companies?
  • Will artificial intelligence soon replace pricing professionals?
  • Where can pricers turn for training?
  • ...and more!

Click the image below to listen to the #PricingPodcast interview:

About Alex Shartsis: Perfect Price was founded by former Drawbridge colleagues, Alex Shartsis and Youngin Shin. Youngin had spent years optimizing billions of ads and search results and was looking for a problem to solve that affected nearly everyone. Alex had led pricing efforts at TripIt, Drawbridge, and other early-stage companies and thought he could do better. Pricing is hard because unlike nearly everything else on the internet, there's no easy way to infer demand from the scattered and often limited information on customers. With a unique understanding of the business challenges and technical know-how, Alex and Youngin built the framework for a first-of-its-kind price optimization solution. The Internet and retail business leaders liked what they saw and became customers and investors even before the company had the chance to incorporate. When their first customer saw a 23% increase in revenue, they knew they were onto something. Visit PerfectPrice.io to learn more information.

Learn more about our Pricing Conference & Workshops event and register to attend by clicking the image below:

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Uncovering Unauthorized Sales - A Pricing Podcast

In this #PricingPodcast, we talked with Whitney Gibson, a Partner at the Vorys, Sater, Seymour and Pease LLP law firm, and a known expert on unauthorized sales, online. Whitney shared why businesses and consumers alike should be concerned with unauthorized sellers who sell diverted products. Sellers on eBay and other third-party online marketplaces are causing many problems for retailers and manufacturers. These effects result in a loss of profits and brand reputation for brands and legitimate sellers - especially in the pricing industry.

What is unauthorized selling? How can businesses protect their prices and prepare their sales teams? Whitney Gibson shares tips in this #PricingPodcast.

Listen to the #PricingPodcast below: About Whitney Gibson: Whitney is a partner and chair of the firm’s intellectual property and technology protection group. He focuses his practice on Internet brand and reputation issues, including online seller enforcement, internet defamation, patent and intellectual property infringement, and misleading marketing and advertising. Whitney has developed custom programs for companies confronting these issues with investigating tools and services. Please leave a comment on the #PricingPodcast episode below or on our SoundCloud account! Subscribe to the #PricingPodcast to never miss a new interview or pricing share!

Register to attend the Spring Pricing Workshops and Conference event in Chicago, IL this Summer!

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11 Reasons To Visit Miami

This Spring we're heading to Miami, Florida for the 28th Annual Spring Pricing Workshops and Conference event. It's going to be an incredible time -- learning, networking and growing businesses in the city of Miami! We found 11 convincing reasons to visit this sunny city, not that Miami needed much help. Read below and book your ticket today! Originally posted at CVent.com: 11. The NEW Miami Beach Convention Center (MBCC) A $500-million state-of-the-art transformation brings 500,000 sq. ft. of exhibit space, a 60,000 sq. ft. ballroom, just 12 miles from the airport and walking distance to dining, shopping and cultural events. Learn more about the Miami Beach Convention Center transformation. 10. Accommodations Rest your head or catch up on email at the New Miami Beach Convention Center Headquarter Hotel, an Art Deco hotel, cozy boutique property or luxury resort. Choose ocean views or city sunsets. Accommodations in Greater Miami come in every shape and size. Service with a smile is the common denominator. 9. World-Class Airport Miami International Airport (MIA) has more than 100 airlines and offers 150 inbound direct flights daily, along with onsite car rental and rail connection to Downtown Miami. MIA has more flights to Latin America and the Caribbean than any other U.S. airport — and it’s just 20 minutes away from the Miami Beach Convention Center and most hotels. 8. Great Weather Miami’s annual average temperature is 74◦F (23◦C). Year round, you can hit the beach. Or dine at an outdoor café. Or go for a sunset sail. Or snorkel in Miami Beach. Enough said. See current conditions and average monthly temperatures. 7. Cutting Edge Technology With top quality medical care, technology, and access to medical experts and cutting-edge research programs, Miami is the ideal choice for any medical meeting needs. Academic medical excellence meets innovation at Mount Sinai Medical Center on Miami Beach. Live procedures will be viewable via a closed-circuit hospital link at the new Miami Beach Convention Center. 6. Stellar Service GMCVB’s Convention Services Team provides complimentary Site Selection Assistance, Business Services Referrals (caterers, decorators, housing reservation services, speakers, staffing services and transportation) and Destination Materials (maps, pocket guides, digital images and promotional video). 5. Where the World Meets Increase your attendance by hosting your Meeting in Miami – the gateway to Latin America. Miami is fast becoming a technology hub for tech startups, finance, banking and established companies who are attracted by its international flavor and easy access to Europe, South and Central America and the Caribbean. 4. Arts & Culture The Art Deco Historic District, The New World Symphony, Art Basel, Pérez Art Museum Miami (PAMM), Patricia & Phillip Frost Museum of Science, Wolfsonian-FIU and Jewish Museum of Florida are but a small sampling of Miami’s rich arts and cultural offerings. Catch a show at Adrienne Arsht Center for the Performing Arts or a sporting event at AmericanAirlines Arena. 3. Shopping Miami Beach boasts lively Lincoln Road, hip boutiques along Washington and Collins avenues and charming shops along Española Way. Minutes away from the beach, Miami Design District is one of the city’s newest retail hot spots. From South Beach to the suburbs, Miami is a shopper’s paradise. 2. Sports Cheer for the Miami HEAT, Miami Dolphins and Miami Marlins while you’re in town. Golf, tennis and water sports (jet ski, kayak, standup paddle boarding) are everywhere, and major sporting events like the Miami Marathon, Miami Open and World Golf Championships-Cadillac Championship Doral take place year round. Grab a quick round at the beautifully manicured Miami Beach Golf Course. There is no shortage of sporting activities and events in Miami. 1. #PPSMIA & #PPSLAS Spring Pricing Workshops and Conference Events! Registration is open for the 28th Annual Spring Pricing Workshops and Conference event in Miami, Florida! Of course the event of the season is the number one attraction in the city! For more details, visit: Pricingsociety.com/Conferences.

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Pricing Podcast: The Industry's Leading Audio Interviews

The Professional Pricing Society is proud to announce that our Pricing Podcast series is now available on SoundCloud, iTunes, and Google Play! We're excited to deliver fresh audio content and invite you to subscribe to our #PricingPodcast! Listen to episodes on-the-go from any mobile device or laptop, to interviews with pricing industry leaders about their career successes, case studies, and strategic lessons.

CLICK HERE to listen on iTunes

CLICK HERE to listen on Google Play

CLICK HERE to listen on SoundCloud

Rate the sessions, leave a review and share with your pricing peers! We want your feedback to deliver the most valuable content!
  • Are you new to pricing and want to know the industry basics?
  • Have you stopped along your CPP journey and want to find other pricing professionals?
  • Do you know of an expert or brand that would make a great interview?

Share your thoughts and feedback below or send us an email:

Marketingteam@Pricingsociety.com

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Celebrating 70 Years: Dr. Hermann Simon

Dr. Hermann Simon, the highly celebrated and award-winning pricing expert, is celebrating a milestone Birthday this month! The award-winning executive, businessman and author remains widely revered throughout the pricing industry. He, and his company Simon-Kutcher and Partners, are great friends to the Professional Pricing Society. Dr. Simon has been a featured speaker and presenter for several Pricing Workshops and Conferences throughout the years and we would like to spotlight his accomplishments on his 70th Birthday!

Looking for Dr. Simon's career highlights? Click HERE to view the key facts about the "Godfather of Pricing!"

From the official Release: Dr. Hermann Simon celebrates his 70th birthday February 10, 2017. The internationally renowned management thinker and pricing expert, who has been especially focusing on the success strategies of Hidden Champions, the prospering world-market leaders of the German Mittelstand, looks back on an eventful life. Simon, a globally recognized academic in his specialist field, spent 16 years of his “early life” as a professor at the universities of Bielefeld and Mainz. He also taught as a visiting professor at Harvard and Stanford, the Massachusetts Institute of Technology, INSEAD in Fontainebleau, the London Business School, and the Keio University in Tokyo. In an unusual turn, he ended his university career in 1995 to lead Simon-Kucher & Partners, the international strategy and marketing consultancy he co-founded and managed as CEO until 2009. As Simon reaches the milestone of his 70th birthday, he now serves as the company’s Honorary Chairman. Today the firm has almost 1,000 associates in 33 offices worldwide and is regarded as the world market leader in pricing. Simon has continuously been ranked the most influential management thinker in the German-speaking area after the late Peter Drucker. His 35+ books have been translated into 26 languages, with international bestsellers on the topic of Hidden Champions, a term coined by Simon himself. He is also an internationally sought-after speaker and has held more than 1,500 speeches in 48 countries. Simon has been awarded numerous prizes (German Brand Association Award, Erich Gutenberg Award, Georg-Bergler-Prize, Prix de l’Académie des Sciences Morales et Politiques). He holds an honorary doctorate from the IEDC School of Management in Bled, the University of Siegen, the Kozminski University in Warsaw, and is an honorary professor at the University of International Business and Economics in Beijing. Despite his cosmopolitan outlook, Simon grew up on a small farm in the Eifel region of Germany, and still feels strongly connected with his place of birth. He has also worked on three non-technical books about his home region. Simon has a daughter and son with his wife Cäcilia Simon, née Sossong, to whom he has been married since 1973. After failing to achieve his childhood dream of becoming a starfighter pilot due to color blindness, he pursued a career in economics. About Simon-Kucher & Partners, Strategy & Marketing Consultants: Simon-Kucher & Partners is a global consulting firm with 980 professionals in 33 offices worldwide focusing on TopLine Power®. Founded in 1985, the company has more than 30 years of experience providing strategy and marketing consulting, and is regarded as the world’s leading pricing advisor. Visit their website HERE.

Happy Birthday Dr. Hermann Simon!

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Price Optimization Pricing Chat With BlackCurve

PricingChat with BlackCurve pricing software company on price optimization We chatted "Price Optimization in 2017" with Philip Huthwaite of BlackCurve.com - view the full #PricingChat recap! A new year of #PricingChat content kicked off with the CEO of BlackCurve.com Philip Huthwaite. Philip is by far one of the most enjoyable interviewees we've had and he's a wealth of pricing knowledge! Check out our exchange on Twitter discussing Price Optimization in 2107, how businesses should be using new strategies, which companies are failing, and ways everyone can benefit from optimization. Click the image & link below to view the full #PricingChat RECAP:
About Black Curve:
BlackCurve is a cloud-based price management and price optimization platform, which helps businesses to fine-tune their pricing. Philip has been using software to solve pricing challenges since 2012. Before BlackCurve, he was a Technology Consultant at Accenture, he worked with multinational companies such as The Royal Bank of Scotland, ITV, Royal Mail and EDF Energy. Join us this Spring in Chicago, IL to learn directly from the Pricing experts and obtain your CPP Designation. Learn more by clicking the image below:
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