John Hogan, management consultant, author, and LeveragePoint advisor, recently delivered a keynote at the Professional Pricing Society’s annual conference in Orlando in October. The talk on “Pricing Leadership: Navigating through Tumultuous Times” is available on SlideShare, where you can also find his speaker’s notes.
In this talk, John brings into focus the double challenge facing marketing and pricing experts in today’s economy, and by extension the challenges to sales leadership.
The first challenge is that in a recession, pricing becomes the key concern of marketing leadership – they are worried about price erosion and global price competition from within their supply chains.
The more profound challenge is that the nature of the pricing function is changing as new business models emerge: pricing is about much more than setting a price in a single-sided market – it involves monetizing the value net and mining the long tail of the market through sophisticated value management.
At the same time, the global economy itself is transforming. Globalization is accelerating even as certain markets are shifting back to local designs and supply chains; climate change is making sustainability and green-business strategies a real opportunity to add new types of value; innovation sometimes causes more rapid commoditization (cloud computing and virtualization are commoditizing large swathes of the IT industry). Even the relationship between cost and price is changing. Where people were once happy to set prices with a mark-up over their costs, they must now use pricing to proactively manage their costs, using a combination of offer construction and pricing to direct customers to offers that are the most profitable while maximizing the value to the customer.
John’s presentation is full of insights, and uncovers many of the business challenges that we will all face over the years – more and more of us will need to be working on monetizing our value networks and on mining long-tail opportunities. We look forward to your reactions and contributions to the discussion around these important themes. With LeveragePoint for Value Management, we are developing the tools and frameworks needed for product innovation, marketing, pricing and sales to act in concert to address the challenges of pricing in tumultuous times.
John Hogan, Ph.D.