Building Pricing Intelligence Maturity
Price intelligence is one of the most important factors in building business competitiveness. However, not everyone is at the same point along the pricing intelligence journey.
The journey I’m talking about, I like to call ‘Pricing Intelligence Maturity’. This can take many directions, including acquiring pricing knowledge, building pricing skills, systems deployments, or organisational transformation.
Setting your Price Intelligence Vision
No matter where you start, any journey involves understanding where you want to end up. For some companies, the journey may involve just understanding their competitor’s pricing in a more systematic way.
Others may see their vision differently and aspire to have a complete transformation of current pricing practices under one organisation and authority. This could include building consumer and environmental elements into their pricing models.
Nevertheless, if you are serious about building a credible mature organisation in the pricing domain, you have to ask some hard questions. Building an honest assessment of your current situation is simple enough to do, but difficult.
Asking difficult pricing questions
Holding a mirror up to yourself or your organisation can be a really hard exercise and one that could possibly warrant an external facilitator.
For example here are some questions that could be asked;
• To what degree are competitor prices tracked?
• Are there any price intelligence tools are currently in place?
• Which type of data is used in pricing decisions support?
• To what degree are industry and market trends monitored?
• How pricing changes/strategies of competitors are reacted to?
• How is stakeholder communication in relation to pricing organised?
Over the years, I found that while consultancy organisations have a mixed reception, but they do follow systematic approaches that yield robust outcomes.
To illustrate a price maturity index could be as simple as the diagram above.
By asking simple questions you can verify where you currently sit on the maturity scale. But more importantly where you wish to get to.
Building from one level to another is a question of effort, resources and focus. It also takes some foresight on behalf of the organisation to support this type of journey. It takes the MD or CEO to support this transformation and believe it will make a real difference.
Where is your Price Intelligence Maturity (PIM) index today?
Here are a few basic questions that can help you get started on understanding your PIM.
Click on the link and view the questions: PIM questions matrix
Hopefully, the answers will give you a basic indication of where you sit today in terms of pricing maturity.