2. PRICING ADVISOR
The 3535 Roswell Road, Suite 59
Marietta, GA 30062
770-509-9933
A Pro f e s s i o n a l P r i c i n g S o c i e t y P u b l i c a t i o n www.pricingsociety.com
presented as their own ideas, giving no you won’t have Owen Wilson show final read out presentations to client
credit to the existing pricing function. up! Remember that a consultant’s end executives. A project that is perceived
goal is always to get an audience with as well done can provide significant
In order to structure a relationship and your boss or bosses’ boss and some may word-of-mouth benefit within the client
specific project engagement for mu- simply view you as a means to an end. organization into other business units,
tual success, pricing practitioners must That said, not all firms are like this. as well as provide the firm with referrals
understand consulting firms’ business Some firms: a) have a strong culture of for new client opportunities.
motivators and have a checklist of items “teaching clients how to fish” so they
that should be addressed prior to start- can become obsolete and b) measure A Cautionary Note:
ing an engagement. In addition, on- their success on your own or your team’s Practitioners must be wary of firms who
going inspection, communication and success (e.g. whether you get promoted, may take and repackage existing client
review are critical to maintain- information that is: 1) not san-
ing project momentum and ity checked for accuracy, 2)
eventual success. lacks proper citing of source
material or 3) used in the prop-
What Makes er context of the discussion
Consulting Firms topic. Some firms can prioritize
Tick? speed over quality and the re-
Consulting firms share a num- sult is significant internal client
ber of common business objec- re-work and revisions to cor-
tives. However, some vary in rect mistakes. That said, most
terms of the emphasis placed consultants tend to take great
on each objective. Pricing prac- care in ensuring there is proper
titioners must clearly under- buy-in and incorporation of in-
stand these motivators before ternal feedback prior to presen-
engaging a consulting firm: tation of key findings as part of
• Leverage fixed resources. A the results read out process.
consulting firm’s major asset
is people (very smart ones Setting Realistic
too). If this asset is not being Expectations on
utilized properly (e.g. 80%+ the Consultant’s Role
billable time), the firm is not In far too many cases, a proj-
making money. In addition, ect kick off with a consultant
consulting firms want great- is destined for immediate fail-
est utilization from junior ure due to misaligned expec-
resources, often 100%, even tations around the roles to be
though they may bill at lower played. A typical “non-start-
rates. This allows partners er” from a consulting stand-
and other senior personnel In order to structure a relationship and point is the client’s expectation
to cover more projects and specific project engagement for mutual for them to serve as an addi-
ensure both quality and rela- tional internal team resource
tionship control. success, pricing practitioners must for hands-on implementation
understand consulting firms’ business management and/or process
• Establish and maintain Ex- motivators and have a checklist of execution. Although this can
ecutive-level client relation- be ideal for the pricing team
ships. This is a key element items that should be addressed prior to since it temporarily fills a re-
for consulting firms with starting an engagement. source gap, it does not lever-
respect to driving follow-on age consulting resources effec-
business within existing cli- tively and results in very high
ent projects. Most consulting priced temp workers that may
firms want to get in the door and stay, if the team gets expanded etc.). be performing lower value tasks. If addi-
kind of like an in-law or friend that tional resources are needed to fill a gap,
just needs a place to stay for “a couple • Enhance reputation and subsequently then seek the appropriate, but temporary,
weeks” but ends up staying forever. If referrals. Consulting firms typically internal resource or contractor.
you remember the movie “You, Me and maintain high standards around analyt-
Dupree,” it’s just like that, although ics and project deliverables including Conversely, a pricing practitioner should
July 009
3. PRICING ADVISOR
The 3535 Roswell Road, Suite 59
Marietta, GA 30062
770-509-9933
A Pro f e s s i o n a l P r i c i n g S o c i e t y P u b l i c a t i o n www.pricingsociety.com
Figure 1 have for the con-
sulting group,
Checklist Low Engagement Likelihood of Success High should be in
Criteria alignment as a
result of due dili-
Consultant Process Execution Program/Process Targeted support/ Strategic solution gence and clear
Role management expertise (e.g. partner communications
analytics) between you and
Problem Definition Fix our pricing/give Acute problem – end Structural problem – Systematic problem the consulting
us a strategy period discounts list price setting – strategic pricing group. Will this
capability roadmap project, and the
Internal Alignment: Single Function Internal facing team External facing team Cross functional results shared,
*functional view (RD, Finance) view (sales, help to establish
only customer svc ) only or “legitimize” an
existing pricing
Internal Alignment: Grassroots/ Divisional/PL Sr. level CFO, CEO, COO function? It’s also
*seniority Functional managers specific governance/review
a good idea to set
forum
a work agenda,
Resource Availability Limited to none Dispersed subject Existing pricing team Dedicated cross or scope of work
matter experts/ functional team (SOW), for align-
Virtual team ing your compa-
Progress/Results As needed Milestone driven Regular cadence with Formal read ny’s requirements
Tracking working team out/update forum with the consul-
members (sponsors team) tant’s capabilities.
Execution Process TBD Post project handoff Pre determined Change
and Plan to Operational group implementation management/ Regardless of the
team training team problem defined,
senior manage-
ment involve-
not cede the role of lead pricing interface to Problem definition and scope (identify- ment in and support of the project is
company executives over to the consultant. ing the critical issue you want to solve). critical in order to successfully resolve
This executive communication role is criti- Establishing a project checklist is critical the problem. This can be determined by
cal for enhancing credibility, and although for success. The first step is that the prob- who is initiating or driving the project.
ideal for the consultant, it can minimize lem needs to be defined. Is it a specific In order to effectively contribute to the
the relevancy of an existing pricing team if pricing problem (e.g., end of period dis- success of the project, it behooves all in-
deferred since the consultant becomes the counting) or more of a macro level issue volved to understand if this is a division
defacto voice of pricing. such as managing customer profitabil- manager’s “special project” or if it’s be-
ity? Maybe it’s a deficiency in execution ing driven at the executive level. Having
The ideal role enables consultants to fo- of your company’s pricing strategies or mutual agreement that a problem exists
cus on providing additional support, and tactics or ineffective use of existing op- is important, as it helps to facilitate the
work collectively with an existing pricing erational resources. It’s also quite possible project timeline and its scope.
practitioner and his/her team, to cham- your company’s entire pricing approach is
pion pricing as a core competency or inefficient and needs re-examination. Key Consideration:
strategic advantage with executives. This • Are there different diagnoses or views
includes helping lay out a pricing roadmap Key Consideration: from Sales, Marketing, Finance, Product
or foundation for building sustainable • Is the project intended to address an Management etc. or a generally aligned
pricing capabilities across the organization. acute pricing problem or a broader view across functions?
strategic issue? • Finance, RD view problem as value
Planning For the “Dance” • End of period discounting, grey market selling related vs. Marketing, Sales view
Once practitioners have internalized the pricing vs. managing customer profit- problem as product cost/list pricing
set of key consulting motivators and un- ability, new offer packaging/purchase related
derstand the roles for which the consul- models
tants are best suited, they can then cre- Internal resources available (within
ate a plan for success based on a simple Degree of internal support and align- and outside the pricing function). Once
checklist of items. ment. Your company’s internal project you’ve agreed that there is a problem,
expectations, as well as the one’s you and that you’re going to implement the
July 009
4. PRICING ADVISOR
The 3535 Roswell Road, Suite 59
Marietta, GA 30062
770-509-9933
A Pro f e s s i o n a l P r i c i n g S o c i e t y P u b l i c a t i o n www.pricingsociety.com
project and engage with a consulting Progress Monitoring and Results larity of tracking update meetings and
group, the next priority is agreeing on Measurement. Periodic updates to does it include executive “check ins” as
the timeline for project completion. Your gauge the progress of the consulting well as process for escalation?
expectation as to the amount of time group’s performance are a must. This
it should and will take is important for should be done with the consulting Implementation, Planning and Ex-
budgetary reasons and for the internal group’s participation. Updates or brief ecution. Will you have the internal
resources that will be assigned to work presentations to management are im- resources to do so or will you need to
with the consulting group. portant in order to ensure that everyone enlist the assistance of the consulting
is on the same page, that the consulting group for follow-up? Will those who
Internal resources should be made group is “marching” towards the end are going to implement the action plan
available to work with the consul- deliverable and that there are no poten- within your company have the tools
tants. It should be clearly communicated tial surprises at the completion of the and education to do so? Ensuring that
who will work with the consultants and project. your internal resources are fully edu-
what the parameters will cated and trained by the
be for doing so (e.g. over- consulting group on the
sight and review, execution “tools” needed to imple-
expertise, data or analytics ment and maintain the
support). project’s action plan is
essential for project close
Who should work with out. You may also need
them? The internal project to have those involved
facilitator should ideally be who are implementing
a key member of the pric- and maintaining the ac-
ing team. However if none tion plan trained on ad-
exists, then identify some- ditional/supplementary
one who is fully aware of tools (e.g. database man-
the scope of the project, agement software such as
has the wherewithal to Microsoft Access).
work closely with the con-
sulting group and facilitate Key Consideration:
the project as well as to • Do you have commit-
provide periodic updates ment for cross-functional
to the company’s manage- project team members who
ment team. will responsible for imple-
menting and monitoring
Should there also be com- action plan(s)?
pany resources involved • Continuous engagement
from outside the pricing of change management team
department? This depends vs. blind hand off to separate
on the scope and nature of the project At the conclusion of the project, has the implementation resources
and what other cross-functional group it ‘expected’ outcome been achieved by
will also impact (e.g. member(s) from the the consulting group? Reviewing and Conclusion
IT group if it’s a project to implement a contributing to final results with the Engaging with a consulting group can
pricing quotations computer system). If consultant is critical. There should be and should be a mutually beneficial ex-
your company decides to have a cross- a final presentation and discussion be- perience. Both the consultants and com-
functional team involved with the proj- tween executive management and all pany have an end-goal which should be
ect it would still be wise to designate a key members involved in the project. satisfactorily met. However, applying
(pricing) project leader to facilitate and Ensure that there are specific recom- due diligence in selecting the appropri-
oversee the project. mendations shared for how to act on ate partner is critical to your company’s
the findings. As a result, your company project success. Building a good relation-
Key Consideration: should be able create and implement ship with each other can pay dividends
• Do you plan to use a virtual team of an action plan in order to benefit from in the short and long term. The key is to
experts who exist across functions or these findings. ensure it’s the “right fit” for both your
dedicated functional expertise (e.g. company and its new “partner.” And re-
product marketing or pricing etc.)? Key Consideration: member, you don’t want a partner like
• What is the planned cadence and regu- “Dupree” who ends up staying forever.
July 009
