How mature is your company in (Pricing)? Take the Pricing IQ Quiz and find out!

 

Pricing IQ Quiz – SPMG Pricing Hierarchy of Needs.

 

INTERPRETING YOUR SCORECARD

 

Click here to begin your Pricing Quiz

 

This pricing IQ Test is designed to evaluate and quantify your companies perceived performance across a wide set of organizational pricing “Best-Practices” in an effort to achieve pricing process excellence.Your scorecard provides you with both a TOTAL PERFORMANCE SCORE and an INDIVIDUAL SCORE across each of the Pricing Performance Stages.  It’s important to view all scores across each of the stages as they contribute in aggregate to your overall score.  We’ve taken the liberty to access each of the five stages respectively, to provide you with insight around possible areas of deficiencies. 

 

            If you score less than 75% in any of the five stages, we can provide further insight or one-on-one professional advice. 

 

      Over 95% = Outstanding

      95%-86% = Excellent       

      85% – 76% = Good             

      75% – 65% = Inadequate       

      Under 65% =  Failure to meet Minimum Standards

 

STAGE 5 – Strategic Process Alignment 

 

*less than 80% suggests a shortcoming in meeting pricing process maturity and excellence through seamless and consistent execution across all business units. Moreover, it is impossible to make the transition without linking the changes to processes, tools, technology, and company culture. 

 

            In order to obtain a score above 80%, the following areas of efficiency must be analysed and, where necessary, changes implemented: 

 

1.   Value-Based Pricing & Training

 

2.   Cost differentiation of Products & Customers

 

3.   Cost benefit analysis of potential outcomes and likely competitor responses

 

4.   Alignment of corporate goals and objectives with pricing strategy

 

5.   Data mining and harvesting of Internal and external data to measure and optimize revenue

 

6.   Efficient Communication and dissemination of information to the tactical team who supports the company goals and objectives.

 

 

STAGE 4 – Analytical Tools/Revenue Optimization 

 

* less than 80% suggests that your organization has fallen short integrating data-driven software tools that provides relevant, dynamic information to facilitate both pricing tactics and strategies in real-time.   A comprehensive pricing strategy requires both the alignment of organizations goals and objectives, as well as the tools to help facilitate the pricing process.

 

      To score above 80% your company must address the following pricing process options. 

 

1.     Developing capabilities in Customer Relationship Management

 

2.     Developing capabilities in Price & Revenue Management

 

3.     Utilizing forecasting algorithm models

 

4.     Quantifying value of product advantages using internal and external tools

 

5.     Clarifying who’s buying what and obtaining ‘Buy-in’ from various functions whether       ‘we’ really need this customer.

 

 

STAGE 3 – Primary Research/Competitive Intelligence 

 

*less than 80% suggests your company has failed to utilize or adequately determine the role of pricing in your product positioning. External research is critical in helping to expose a customer’s current and/or future willingness to trade price for value. Furthermore, the importance of conducting Stage 2 research cannot be overstated, as this is the only representative stage of value-based pricing that quantifies an ‘outside-in’ rather than an ‘inside-out’ approach towards obtaining information about market share, price-elasticity of demand, revenue and profitability expectations.

 

 A score of less than 80% requires that the following options be improved upon: 

 

1.     Identifying relationships between price, discounting and any number of dimensions

 

2.     Price and discount trends by customer characteristics

 

3.     Impacts of discounts and allowances

 

4.     Identifying and defining Best & Worst Customers

 

5.     Impact of price on growth, volume, market share, margins and revenue

 

 

STAGE 2 – Historical Product & Customer Analysis

 

*less than 80% is an indication that your organization is not ‘digging deep enough’ to use internal and available data to institute tighter control of the pricing process. Though the past is not a predictor of the future, it does help an organization to understand and quantify the value proposition of its offerings. It is also necessary to develop a process that helps to segment the market, understand the value delivered to those segments and to use the information in its upward climb toward the next stage of pricing excellence.

 

 A score of less than 80% requires that the following options be improved upon:

 

1.     Clarify who’s buying what and do we really need this customer

 

2.     Determine emerging trends

 

3.     Determine how price and other factors can be used to manage competitors

 

4.     Identify how customers respond to price changes and structures

 

5.     Managing conflicting objectives like profit and volume when making pricing decisions

 

 

STAGE 1 – Tactical Process Alignment

 

*less than 80% highlights a weakness across your pricing process.  Typically companies with a weak score in Stage 1 are relying on individuals that have been around for many years and are referred to as ‘Price Czars’ to develop prices using ‘gut’ intuition.  Often organizations react to market forces making pricing decisions under a high-level of stress and departmental gaming rather than sound, researched decision making.

 

      To score above 80% your company must address the following pricing process alignment options. 

 

1.     Prioritize the significant attributes towards achieving your organizations goals e.g. profitability, growth, market share, market leader, retention of customers, maximized plant capacity, etc

 

2.     Implementing tools and processes to gain control of pricing

 

3.     Removing inconsistencies of price across products, customers and markets

 

4.     Providing facts and analysis into the pricing process

5.     Clarifying roles, responsibilities and expectations around administering and developing prices

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