Pricing Journey

Stephan M. Liozu is Founder of Value Innoruption Advisors. He teaches at Case Western Reserve University's Weatherhead School of Management, where he draws on over 20 years of global business experience to introduce disruptive approaches to strategy, innovation, and value management.

"Neither businesses nor business schools provide sufficient guidance and training for effective pricing practices. The Pricing Journey addresses this need. An insightful and highly informative book, one that will be a must-read for anyone involved in pricing management."—Kent B. Monroe, author of Pricing: Making Profitable Decisions "Changing an organizational culture from cost to value is a long and complex journey. In this book, Stephan Liozu outlines the key dimensions that are needed to successfully make this transformation. He reminds us that it is about organizational change and understanding true value delivery, as well as profit. A must-read full of important concepts and practical recommendations."—John Jacko, SVP & Chief Marketing Officer, Kennametal "Pricing management is a critical but underappreciated element of business success. Stephan Liozu's book describes the journey towards pricing excellence and highlights the organizational strategies needed to raise the profile of this important function. By paying proper attention to capabilities, change management, design, and people skills, pricing professionals can achieve greater performance and, eventually, pricing excellence."—Kevin Mitchel, President, Professional Pricing Society

• Contents and Abstracts0Introduction chapter abstractThis introductory chapter makes the case for a different look at the pricing function, the pricing discipline, and how pricing is deployed in organizations. Pricing tends to be a technical and scientific discipline that is often deployed in organizations without proper attention being paid to the social and organizational implications. Pricing transformations are hard and often fail because of that. The introduction lays the foundation for the need for a different approach to pricing transformations.1What is Pricing Excellence? chapter abstractThis chapter discusses the concept of pricing excellence as the end goal for any company wishing to improve their pricing power. It introduces two critical dimensions of pricing excellence: pricing orientation and pricing realization. Both dimensions of pricing need to be managed intentionally to ensure success in price setting and price setting. This chapter describes the pricing capability grid and the five zones within the grid. Firms that embark on a pricing journey towards pricing excellence have to pay close attention to pricing orientation and pricing realization levels, as well as the path they take in order to eventually reach pricing excellence.2The Transformational Journey chapter abstractThis chapter discusses the concept of pricing maturity as well as describes the concept of a pricing journey. Reaching pricing excellence is a journey requiring deep and sometimes tenuous change. This chapter introduces a structured five-stage transformational model derived through academic research and proven with dozens of pricing case studies. It also provides the initial description of the 5C transformational model developed over the last five years and applied to several real-life transformational projects.3Champions Lead the Organizational Mobilization chapter abstractThis chapter discusses how top leaders in firms can strongly positively or negatively influence the success of a pricing transformation. Research shows that the role of the CEO and the C-suite is critical in supporting the troops and in leading by example. This chapter describes the difference between a CEO's involvement in pricing and a CEO's championing of a pricing transformation. It proposes specific behaviors that CEO and members of the C-suite can display to generate collective confidence and create buy-in across the entire organization.4Center-led Pricing Management: A hybrid Organizational Architecture for Pricing chapter abstractThis chapter addresses the topic of organizational design for pricing. It reviews the various options to set up a pricing function within an organization: centralized, decentralized, center-supported, and center-led. This chapters offers the pluses and minuses of each option but focuses on the center-led management design and the specific roles of pricing teams. Finally this chapter proposes that the combination of a center-led pricing team and a pricing council structure is the optimal organizational architecture for pricing.5Capabilities: Social and Technical Assets and Activities chapter abstractThis chapter covers critical concepts and definitions of what pricing capabilities are in practice. Drawing from various bodies of literature, the author makes a distinction between pricing dimensions, pricing resources, and pricing activities. Both tangible and intangible capabilities are necessary to make sure pricing changes are adopted and assimilated. Based on the work from pricing scholars, the author introduces the concept of socio-technical change related to pricing capabilities and how these positively influence firm performance.6Change Capacity: A Progressive Internalization chapter abstract70% of project fails. And they fail because of a lack of focus on true change management science. This chapter review concepts of change management and organizational change capacity using the pricing lens. The results of a survey on change management in pricing are presented and discussed. Finally this chapter presents the key change factors that are important to any pricing transformation as well as introduces a transformational framework composed of ten dimensions of change in pricing.7Confidence: the Fuel of the Organizational Transformation chapter abstractChanging requires courage and confidence. Transforming organizations requires self-esteem and confidence at the collective level. This chapter covers the concept of organizational confidence in pricing. Drawing from multiple research studies, it proposes a collection of programs that can used to build collective self-esteem and confidence in teams so that they can jump on board the change train. These programs can easily be deployed across the organization to create buy-in and solidarity among the various functions that might be impacted by the pricing transformation.8Possible Roadblocks Along the Journey chapter abstractPricing transformation can take anywhere from 4 to 10 years. That is a long journey and many things can go wrong along the way. This chapter proposes the 12 most common roadblocks business and pricing teams can face when conducting transformational activities. It also offers some practical tips on how to handle and respond to each of these roadblocks.9Pricing Myths at the Organizational Level chapter abstractThere are many myths affecting the organizational perceptions about pricing. Pricing professionals need to be aware of these myths and need to be able to combat them when they design and implement pricing programs. This chapter lists some of the most common pricing myths at the organizational level and offers some tips on how to change perceptions of pricing within their organization including with top leaders.10Pricing Skills to Face Complexity and Dynamic Environments chapter abstractThe pricing discipline has come a long way over the past few decades. The science and discipline of pricing are also changing requiring pricing professionals to learn new skills. With the emergence of big data and pricing technologies, the role of pricers in the future will require a balance of technical and social skills. This chapter offers more details on how pricing skills are affected and how important it is for pricing professionals to define a learning agenda. It addresses the complexity of pricing and the dynamic nature of pricing science.11Closing Thoughts chapter abstractThis last chapter proposes integrative findings from the entire book and how it affect the potential success of pricing transformations. A case study is presented on how the 5C model was used to successfully transform a mid-sized company's pricing orientation. This chapter makes the case for change and proposes a manifesto for change-driven pricing. Finally the chapter calls on the pricing profession to wake up and start their own transformational journey.