Should I start my career in pricing?
4 different ways to approach the question.
This article addresses young professionals and lateral entrants who are considering making pricing their new home port and aims to assist in the decision-making process. Often times, disinformation and/or a lack in information can make this harder; we would like to change that.
After we got our degrees and started exploring the job landscape, the offer of factual positions as pricing managers was still rather scarce. Although many job postings included pricing as one field of activity, few were explicitly declared as such.
Back then, prices were usually determined by sales personnel, marketing experts and product managers as part of their overall responsibility; today, more and more companies consider pricing a separate task. And with good cause: a strong pricing department that uses the numerous new pricing technologies and tools developed over the past decades can increase a company’s profit considerably. The strong influence pricing has on many different departments further supported this change in mindset and made abundantly clear that companies can no longer treat pricing as a by-product. Once pricing targets have been defined, meeting them requires time and care; in other words, it takes full-time resources to perform these tasks correctly and consistently.
Once companies had come to understand what pricing includes and what it can do, acting as a vehicle for swift and sustainable success, the job landscape began to transform as well. The number of job offers, at least, has increased, and job titles have become more differentiated. Whether a company is looking for a Junior Pricing Manager, Senior Pricing Manager, Analyst, Product Owner Pricing, Pricing Consultant or Head of Pricing, one thing is clear: pricing definitely offers a wide range of career opportunities. This becomes further apparent when we look at the job postings on relevant national and international job portals and professional networking channels. Even if the offer cannot explicitly be put into numbers, from a subjective perspective, it is certainly growing.
However, based on conversations with businesses and our own experience, we can say that “more” doesn’t necessarily have anything to do with the quality of the jobs. Though titles are often enticing, job descriptions tend to be rather generalised and unspecific. This lack of direction is continued when it comes to describing the candidate’s qualifications: requirements are often kept that vague that candidates can never really be sure what the company is looking for. Likewise, pointing out that candidates need to have relevant experience in pricing is all fine and well, however, it is a bit useless if they have no idea where the company’s pricing journey is headed. Add to this a potentially wild combination of required experience and fields of activity that make it difficult for lateral entrants and newcomers in particular to grasp what the job entails, and thus may even act as a deterrent.
At the same time, the number of persons who fit the job profiles has not grown at the same pace; it is therefore not unusual for companies to consult headhunters who then circle the same group of professionals again and again.
Good for employees, but a curse for companies that are urgently seeking support.
There is a lack of people who have the necessary expertise to implement pricing in companies and take it to the next level of development.
So, what is stopping so many young professionals from launching their careers in pricing? Especially considering that studies conducted by Deloitte (Deloitte Development LLC, 2009) have shown that this field has an ideal comfort factor and excellent salary prospects.
When we started out, we too faced a similar wall of indecisiveness and information gaps. Even though university had taught us what pricing means in the context of growth gains, it certainly didn’t tell us what a huge field of opportunities would await us. Today, universities still rarely provide this information. Meanwhile, marketing has been clearly differentiated and defined with regard to thematic fields and differences in types of operation, so that everyone at least has a rough idea of whether they are a fit for this field, considering their own strengths and preferences.
Looking back, the fact that we actually stuck with our initial idea of starting our careers in this field seems to have had more to do with luck and our own far-sightedness than anything else. In retrospect, a bit more information on the requirements and opportunities in pricing would have provided a bit more clarity.
Requirements for candidates in pricing are multi-faceted and offer many different ways to contribute your strengths and expertise.
Depending on sectors, companies and target groups, pricing experts face very different demands.
As a rule, we can say that pricing is an extremely data-driven field, meaning you will certainly need to have an affinity for numbers and an understanding of holistic relationships and complex structures.
Companies in the trading environment usually differentiate between price managers and price analysts, whose responsibilities may differ from company to company but may also be virtually identical. Based on our own experience, however, a price manager’s responsibilities usually have a strategic orientation and deal with developing pricing concepts that consider the company as a whole as well as with developing organisational processes that make it easier to control prices within strategic boundaries. Besides classic analytical and data-crunching skills, his requires neglected project and change management skills. Developing strategies and processes requires close coordination and precise preparation in cooperation with a number of departments, from Category Management to Marketing and Finance to the individual markets themselves, which not only need to mark prices but are also the first point of contact for customers when it comes to price and purchase decisions. Candidates interested in this field will find an extroverted demeanour helpful; a knack for communication and a higher level of motivation and stamina are other good qualities to have.
Openness is just as important; you should show an interest in new ideas and always be ready to question and optimise the things that have been achieved so far – especially on extremely dynamic and highly competitive markets. In pricing, the all-too familiar mentality that causes people to say “we’ve always done it like that” is sure to lead to failure.
Companies that are looking at pricing for the first time in particular lack the necessary infrastructure (including data and tools) as well as a general understanding of the field. A certain degree of technical understanding and intuition are therefore a huge advantage, particularly during the development phase.
A pricing analyst’s tasks are not limited to compiling analyses and calculation models and measuring the success of the various pricing measures. They also include interpreting and forming critical questions as a basis for further analysis and the development of thematic fields.
Knowing how to properly employ mathematics and statistics as well as data literacy is certainly a fundamental step towards meeting the job profile.
An open mind paired with the ability to critical thinking, is also helpful, while effective communication skills will certainly help pave your way, as these enable you to convey your findings to your audience – regardless of whether they have technical expertise or not – and convert these findings into recommended actions. Business acumen also plays a key role in helping you put your results into action, thus making it easier to approach a commercial audience. Complex companies with their intertwined business units and complex yet often imperfect data constructs in particular call for your thirst for knowledge and creative thinking in order to take new paths.
As this brief look at pricing already shows: there is no lack of diversity, skills and possibilities in this field. However, due to a lack of information on more in-depth and practice-related topics, few will set out to explore the world of pricing.
Today, all it takes is a bit of initiative to shed light on this mysterious field: over the years, a range of different information channels have developed that can give you an impression of a price manager’s career. To help you prepare, we recommend the following resources, all of which can quickly help you gain a good overview of the field, in particular if you are a young professional or wish to take your career in a new direction.
Literature – an indispensable point of reference when generating knowledge.
In pricing, literature plays a key role in channelling and harmonising knowledge, providing a fast and targeted overview of thematic fields and the range of responsibilities in pricing. The available literature can also help give you a sense of pricing’s driving force, while at the same time illustrating differences in an industrial context. The uninitiated can thus quickly gain an objective overview of the field of work, as well as a first glimpse of the vast extent of this subject. Even if literature differs from practice, comparing the information you have gained with your own expectations will quickly reveal whether there is an initial overlap of interest or if your more dominant feeling is one of rejection.
In the following, we have put together some national (DE) and international examples worth reading, each with a slightly different focus:
- The Oxford Handbook of Pricing Management. (2012). United Kingdom: OUP Oxford. | ISBN-13: 978-0198714811
- Doan, R. J., DOLAN, R. J. A., Simon, H., Dolan, R. J. (1996). Power Pricing. USA: Free Press. | ISBN-13: 978-0684834436
- Müller, G., Nagle, T.T. (2018).The Strategy and Tactics of Pricing: A guide to growing more profitably USA: Routledge. | ISBN-13: 978-1138737518
- Fassnacht, M., Simon, H. (2016). Price management: Strategy - Analysis - Decision - Implementation. Germany: Springer Fachmedien Wiesbaden. | ISBN-13: 978-3658118716
- Diller, H. (2007). Preispolitik. Germany: Kohlhammer. | ISBN-13: 978-3170194922
- Frohmann, F. (2018). Digitales Pricing: Strategische Preisbildung in der digitalen Wirtschaft mit dem 3-Level-Modell. Germany: Springer Fachmedien Wiesbaden. | ISBN-13: 978-3658225735
- Ernst, J. (2013). Pricing: The Third Business Skill - principles of Price Management | ISBN-13: 978-9082069303
- Simon, H. (2015). Confessions of the Pricing Man: How Price Affects Everything. Germany: Springer International Publishing. | ISBN-13: 978-3319204000
- Liozu, S. (2015). The Pricing Journey: The Organizational Transformation Toward Pricing Excellence. USA: Stanford University Press. | ISBN-13: 978-0804794411
- Husemann-Kopetzky, M. (2018). The Handbook of the Psychology of Pricing: 100+ effects on persuasion and influence every entrepreneur, marketer and price manager needs to know. Germany: Springer Fachmedien Wiesbaden. | ISBN-13: 978-3658296667
Online platforms and communities – quickly form an opinion thanks to unadulterated exchange
A quick online search results in a huge number of sources that can help you form an open and up-to-date opinion. In the USA as well as in Europe, two platforms have established themselves, both of which unite the pricing community across all sectors.
1 The Professional Pricing Society
2. The European Pricing Platform
Both communities offer memberships, which include discounts for conferences as well as resources, job postings, articles, presentations and video material.
If your main goal is looking for the like-minded, pricing groups on LinkedIn are a less formal, and possibly less binding, variant. In these groups, you will find job postings as well as people willing to share ideas and drive lively discussions. Besides eponymous groups hosted by the aforementioned platforms, you will also find units that focus on specific topics as well as more generalised groups. The Coalition for the Advancement of Pricing (CAP) is a more recent international formation of experts and knowledge carriers that aims to advance the field of pricing.
Internships – Tried and tested: learning on the job
An internship is not only a great way to quickly boost your learning curve, it will also help you adjust your understanding of the job. Whether you intern for a consultancy or an established pricing department at a major company, internships give you the opportunity to quickly get a realistic impression of the things that are on tap every day in the multi-faceted world of pricing.
YouTube, podcasts & co. – obtain information quickly and on demand
New media such as YouTube videos, podcasts, etc., can also help you gain an initial overview of the field. Even though you will need to differentiate and narrow down search terms and should always be critical when it comes to the authors, these are a quick and easy way to get a first impression. Here, experts from different industries get together to discuss concrete matters and challenges and offer information on the latest stage of development in the dynamic field of pricing. In this respect, podcasts such as Impact Pricing and Pricefx’s Pricing Matters make key contributions:
https://impactpricing.com/resources/podcasts/
https://open.spotify.com/show/2cVf1XmGo7yYhHmq8q2073
We aim to share our knowledge on this and other blogs; many major international consulting companies also write articles on specific pricing topics and findings in a range of sectors.
now it's your turn.
Today, we have more options to obtain information and form our own opinion than we did in the past. Even if the decision on which career to take is a personal one, today at least there are differentiated ways to find answers to legitimate questions, once your initial interest has been piqued, and to find your own personal fit – so that you, too, can embark on your own, personal pricing journey.
Co-author: Björn Damjonat is an experienced Pricing Manager in the trading field. After obtaining his degree in Business Management in the Netherlands, he initially joined Metro Cash & Carry as a Pricing Manager before actively shaping pricing in a range of projects at Fressnapf, Europe’s leading retailer for pet food. Björn currently holds a managerial position with a European office supply retailer, where he is responsible for realigning the pricing department.
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