Wow you have finally done it! You have come up with a new and much better pricing policy.
High fives all around with congratulations from senior management. BUT now what about implementation? This is when you face a number of lurking implementation gremlins hiding in the undergrowth of the execution challenge.
First implementation gremlin – Specificity
How detailed is the work of the new pricing policy and does it adequately reflect the complexity and variability of the business? If the pricing policy is not clear in its specificity there will be numerous individuals and certainly sales reps that will be screaming murder – “you are telling my client to do what? Impossible! I will tell you why it does not work!” These discussions can become drawn out and undermine the whole pricing policy if it is seen not to have been thought through in sufficient detail.
Second implementation gremlin – Refuseniks
OK so the pricing policy is clear and sufficiently specific, so what else? The next challenge is the ‘if it’s not invented here, don’t want to know’, larger than life dominant Refusenik who will not agree with anything that has not been initiated through him/her. These Refuseniks usually have a following and can occupy an influential role within the organisation. Unless planned and handled carefully this can very quickly undermine the organisational buy-in into the new pricing policy.
So who are the likely Refuseniks and what is the best approach? Is it for example to bring them in to process early so that they perceive the pricing policy process as partially theirs? Or is it to identify influential champions that can counter the negative ‘no can do’ comments by the Refuseniks? Whatever the approach it will need to be pre-planned before announcing any Big Bang new pricing policy announcements.
Third implementation gremlin – Messaging
So the Refusniks have been handled and hopefully there is sufficient buy-in within the organisation to move into the next challenge – how and what do we say to our customers about the new pricing policy? For example, perhaps the policy includes increasing the service charge for minimum orders. At one level the organisation can develop a very comprehensive communication plan where each customer is informed and all reactions are very carefully monitored. Where there are strong reactions from important customers there may be associated phased adjustments to neutralise such reaction.
But equally there is a danger of being over-sensitive to the potential customer reaction. This can lead to a pricing policy that has too many exceptions, where the organisation is too soft and amenable to reasons not to implement the pricing policy. The implication is that the messaging may need to be un-dramatized i.e. factual, objective and partially incidental to other customer communications (oh and by the way we are increasing minimum orders). A lot of internal anxiety can arise from any price policy changes and this can negatively impact the customer communication. In short if you are unduly worried and apologetic about the price policy changes, the customer will sense and probably challenge these changes more than when a calm, composed message with a clear rationale is delivered.
Fourth implementation gremlin – Inertia
Perhaps the most obvious challenge is inertia. Action has been agreed with various promises by the implementers but as time passes the number of excuses seem to increase dramatically. Frequently the original enthusiasm will dissipate and the difficulties and realities of execution weigh heavily on the team. Strong leadership is required to navigate the course and stand firm when reasons not to execute comes up again and again. Expect an unrelenting rear-guard action where resistance and ‘yes but’ explanations are common.
Patrick Mosimann (Director of Price Align)