Pricing and Profitability Management: A Practical Guide for Business Leaders

Challenges and Considerations

Any organization can conduct a pricing diagnostic with some simple planning and by taking a structured approach. But here are some common roadblocks and challenges to keep in mind:

• Concurrent initiatives and conflicting priorities. Pricing and profitability transformations require greater focus than many other initiatives. This is primarily because pricing is an often contentious topic that touches almost all aspects of a business. The complexity of the diagnostic needs to be carefully assessed so that sufficient time and resources are set aside to allow most functions to be included and the necessary discussions to be held.
• Survey execution. The execution stage can be unexpectedly complex. While initially only a small number of participants—and questions—may seem to be needed, this can change quickly during the planning stage. Stakeholders may disagree strongly on what questions to include or how to word them. Special care must be taken to ensure that the results will be meaningful (i.e., ensuring questions are relevant) and available (i.e., obtaining a sufficient response rate). Participants will likely need to be reminded repeatedly to respond to the survey.
• Survey and interviewee gaming. All current state assessments run into the problem of participants not wanting to admit (or believe) they are doing their job incorrectly. Therefore, when asked about the state of existing processes, they will usually respond according to what they think the inquirer ...