We all want to travel – and soon, we will all be able to travel. But how well are we equipped for this journey? Price management in times of increasing digitalisation.
Home Alone is one of the most popular comedies of all times. Released in the 1990s, the film focuses on the experiences of a family that is so excited at the prospect of finally going on holiday together, they leave their son Kevin behind. What starts as a relaxing Christmas break ends in a nerve-racking trip for the whole family.
So what does Home Alone have to do with pricing?
Many companies start their pricing journey but often forget important components!
Increasing digitalisation results in faster and more transparent price comparisons, which in turn forces companies to implement professional price management. In the course of this, sustainable competitiveness and the increasing need for optimisation take centre stage, along with the necessity to ensure pricing methods can be implemented conveniently in these times of highly dynamic markets and expectations.
At no time has the procurement of items become so easy and fast-moving for the customer as in the era of online shops and emerging marketplaces. A time when changing shopping locations is a click away, changing products and services is child's play, and ubiquitous transparency makes price a much stronger selling point. Even before the Corona pandemic, opportunities and risks went hand in hand here. However, digitization is not only associated with "speed" and "simplicity" in pricing, but also with the ability of customers to quickly and easily reorient themselves in the market.
Many companies have recognised this and are driving the use of new technologies and software solutions to utilize their opportunities in the best possible way and at an early stage. Others, however, are still at the start of their journey, overwhelmed by the possibilities and approaches. The pressure resulting from the need for change – and the many options to implement said change – causes many companies to neglect certain questions or view them as minor concerns.
Questions such as
- Are we aware of our own expectations and/or what is our medium to long-term strategic alignment?
- Is our technical infrastructure up to date, can it meet both internal and external requirements?
- Do we have the relevant data and does this data have the right level of quality?
- Do we have the right pricing know-how in our company? What skills does the person responsible for pricing actually need?
may later give rise to tensions and create internal “battlefields”.
This can bring the journey to an abrupt halt. Alternatively, reaching the journey’s end may require many detours and thus cause considerable delays and potential losses (personnel as well as monetary).
So what puts this journey at risk? Is it that companies are too reluctant to answer elementary questions and check for blind spots – something that is necessary yet often neglected? Taking a look at our corporate baggage, so to speak, may reveal possible internal misunderstandings and tensions; at the same time, however, this provides a secure foundation for a successful journey. Taking a look at the past and the present dispels our fear of the future, as it helps us become aware of how well we are equipped, thus allowing us to embark on our journey with confidence.
The story of Kevin and his family has a happy ending. For our own pricing journeys to end the same way, being realistic about how well we are equipped is an essential aspect and key to reducing resistance to change, making organisational change easier and enabling technological change. This in turn ensures we can integrate new systems, tools and processes smoothly, providing clear responsibilities and setting expectations.
One thing is certain: internal change and external innovations and technologies will make our pricing journeys increasingly dynamic and diverse. However, one thing will stay the same: preparing for change will always be in the hands of the companies. So what questions do we need to face if our journey is to have the maximum success? Join me as I take a closer look a key areas of tension in my next articles.
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Co-author: Ms. Melanie Brücher-Kümmel is a successful pricing specialist who has acquired her professional expertise in the wholesale and retail trade in the B2B as well as in the B2C sector. During her work for various companies, she supported various change processes and implementation measures in an accompanying and active role. Her analytical skills and the recognition of relevant data patterns distinguish her work and qualify her for her current position as Head of Pricing in a wholesale company in the commercial vehicle industry.
