The role of pricing in an organization: No monitoring, no success

October 09, 2017

No monitoring, no success

It's one thing to come up with a price strategy. It's a whole other thing though to embed it into the organization. To ensure success, comprehensive implementation and, above all, systematic monitoring are necessary.

Many companies do not follow through on the latter point. Their processes do not allow them, for instance, to find out how much of a price increase was actually implemented  a risky way to do pricing. In contrast, smart companies create transparency by putting together the most important pricing KPIs of their organizations in a pricing cockpit. This way, the C-levels can continuously check to see if price targets have been met and react accordingly.

Ideally, KPIs should be broken down into regions, product areas and even individual customers. In doing so, they can be used in sales for price steering and, ultimately, in sales remuneration systems.

Advice of Simon-Kucher experts:

Define the most important KPIs to strategically steer pricing. Develop a simple pricing cockpit that reaches the entire company from the board to the sales team.