Pricing is always more interesting to Finance than anything else they could be doing. Believe me. I’ve been in Finance. ….. End-to-End Pricing: Steps 8 & 9

Step 8 – Financial Objectives

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Financial Objectives – such as Revenue Growth, GM% expansion, Opex, PBT, ROIC v time – need to be reconciled with the List Price Positioning Strategy

This is an interactive process with Finance, but the outcome should not be dictated by Finance.

Finance unilaterally & arbitrarily setting unrealistic financial goals in their annual target setting process is typically the second biggest cause of “pricing issues” that I come across.

 

Step 9 – Integrated Financial Plan

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Planned list prices and discounting should be rolled into a product-based financial plan along with new products introductions & discontinuations, product cost plan and demand plan.

Compare the outcome with your financial objectives. Then re-iterate ….

Make sure that your pricing plan is baked into Finance’s “official” financial plan or at least consistent with it.

Make this a joint exercise with Finance who typically will be willing to get involved because working on pricing is always more interesting than anything else they could be doing. Believe me. I’ve been in Finance.

Extract from “10 Steps to Creating End-to-End Pricing” in April 2016 edition of The Pricing Advisor, authored by Paul Charlton of The Pricing Factory®.

Read the paper.

  • The Pricing Advisor is the monthly publication of the Professional Pricing Society, The World’s Leading Association Dedicated to Pricing Management.
  • This is the second article of Paul’s that the Professional Pricing Society has published. Read the paper in slideshow format …..
  • Any questions, please contact paul.charlton@thepricingfactory.com

 

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