Ask the Expert with Stephan Liozu from July 2012 Webinar

by | Jul 20, 2012 | Presales, Pricing, Quantify Customer Value, Why LeveragePoint?

Organizational Confidence: Generating “Pricing Superheroes”

Stephan Liozu, CEO of Ardex Americas, described why organizational confidence is a necessity for pricing excellence. He identified key factors that impact organizational confidence as well as provided practical advice about how best to leverage it. During the live webinar, Stephan responded to a number of excellent questions from our participants, which are recapped below:

Q: Is there a quantitative relationship between the degree of organizational confidence and improved price realization?

Yes. One of the constructs in our quantitative research is defined as firm performance, and in firm performance we have eight items. Two of them are pricing related, three are profit related, and three are sales related, so in there is an element of pricing power and absolute price level. These two elements are a combined aggregated factor linked to organizational confidence. We didn’t actually have a construct called pricing, but pricing was included in the firm performance construct, and we showed in our research a very strong link between confidence and firm performance, which includes pricing.

Q: How critical is coaching/mentoring in implementing value-based pricing?

I would say it’s one of the critical elements because when you get to the dimension of people development, you have to design different programs that do regular pricing training and value management training. When you get into value selling and really training the commercial force, including marketers, business development, and application engineers, you really have to coach them to speak the language of customers. You have to be able to read the body language of customers, be able to deflect tough objections, which requires coaching in small groups, role playing, shadowing the best salespeople. So when we conceptualize pricing training around the themes of experimential learning and transformative learning, it’s a different approach. Coaching is a huge element of it, and it has to be one-on-one coaching because some of the salesforce may not be able to express their frustration. You really have understand why they are not willing to do it, why they do not have the confidence to do it, and a lot of that lack of confidence is self-esteem. You can’t do that in the group, you have to do it in one-on-one coaching.

Q: High level managers (VPs and Directors), think they are driving a Ferrari while in reality they are driving a Buick Road Master. How do we get high level execs to realize that change will not happen at the pace they anticipate and what is a typical timeframe to achieve DNA alteration?

That is a good point, and there’s two things here. One is, a lot of times top management is disconnected from the true level of differentiation. The second is, you really have to bring executives in the field and experience the customer objections. You have to really coach them of the fact that pricing is not only short-term gain (that’s a myth in the C-suite), but that pricing gains will happen two, three, and five years from now. You can’t just base your decision on investments and support of pricing only on short-term gains because, you may have short-term wins, but at the end it’s a long-term investment.

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