Issue link: https://pros.com/learn/i/1180904
Innovation Is a Double-Edged Sword For well-established pricing functions, the availability and accessibility of today's price optimization technologies present both an opportunity and a threat. The opportunity to advance one's pricing capability by leaps and bounds is clear. The threat, however, is a bit more subtle. Established pricing functions that have been on the "crawl, walk, run" path for some time will have developed a lot of legacy processes and practices—i.e. teams of manual pricing analysts, price setting and quoting regimes, exception handling procedures, and so on. In effect, this legacy infrastructure that has been built up over many years can develop a sort of "force field" around it. Under these circumstances, the status quo is extremely powerful and unyielding. And there's a strong organizational motivation to avoid any sort of deviation or disruption and maintain the current course of incremental improvement into the future. But by opting to maintain the status quo and stay the course, an established pricing function will inadvertently expose their company to significant competitive risk. After all, these pricing technologies are now so accessible that even much smaller competitors can adopt them, with far less legacy infrastructure to hold them back. And when smaller competitors bring these sophisticated price optimization solutions to bear, they can very quickly surpass the pricing capabilities of larger and more "mature" companies, winning away market share and profit in the process. © Copyright MindBrew • All rights reserved. • May not be used or reproduced without permission. A Must for Newbies and Veterans Alike Through the Journal's subscriber Help Desk, pricing leaders will often ask for our advice and perspectives on their forward-looking plans and top priorities. And whether we're talking to someone just starting out or someone who's been at this for years, we have a similar message: If it's not already among your top priorities to at least investigate the potential for using data-driven price optimization technology in your business, it absolutely should be! From our perspective, these innovations are game-changers that cannot be ignored. Those working in new pricing functions may have to educate others as to what's possible today and counter any preconceived notions about the conventional "pricing journey." This report will certainly help with that. On the other end of the spectrum, pricing veterans will likely have to get past some of their own preconceptions and closely-held beliefs. At the same time, they'll also have to resist the temptation to stick with the status quo, pretending that nothing has changed. In either case, it may not be easy. But in light of the alternatives, it's a must.