price increases

Price Increase: If Not Now, When?

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Read excerpts of an article that highlights how important it is for distributors to be able to implement price increases given a backdrop of continually rising input costs and a strong economy with some forecasting 3.7 percent growth.  Now is the time for distributors to raise their prices.

“Why we’ve got low margins today…”

Downward pressure on margins is the universal distributor complaint. New competitors, supplier sales teams setting prices at unsustainable levels, the internet and customer pushback are all finding their way into the discussion. Further, in spite of some major productivity advancements, operating costs continue to rise. One distributor, who closely monitors operational costs, commented costs have risen nearly 25 percent faster than offsetting gross margin gains over the post-recession era. Clearly, we need to do something.

When times are tough, margins get another squeeze. During “The Recession,” many suppliers instructed their field teams and distributors “not to let price be an issue” while grabbing what little business was available. We responded. Pricing levels extended on projects and ongoing flow business took a gross margin nose dive for manufacturers and distributors alike. The problem lies in the fundamental difference in the distributor and manufacturer business model. The distributor slice of the total “supply chain” gross margin is much smaller than that of their supply partners. For example, Manufacturers make 45-60 percent gross margin and the Distributors receive 20-30 percent. Simply put, we distributors have less wiggle room.

Once The Recession ended, we found ourselves stuck with the lower prices and lower margins. On the customer side, customers discovered new base-line low prices and latched onto the savings. With this fact freshly planted in their minds, many pushed/negotiated to extend the lower level.

“Good times are the right time to ask for a little more.”

Fortunately, most of our customers are out of their own financial crisis. They no longer need to squeeze their suppliers just to survive. The new sellers pumped into our territory are mostly settled into position. They have discovered enough accounts to justify the meager commissions needed to survive. More importantly, customers are busy. They, along with their purchasing/procurement departments, are relying on you for expanded services and dependable deliveries, not record setting prices.

If ever a time existed to push margin to a new level it is now. The window, however, is narrow. Business cycles, by their very nature, move from great to poor. According to economists, this growth spurt will extend into mid-2018. Time is short. We cannot and should not procrastinate our plan.

“Strangely, many distributors have long term pricing agreements without expiration dates.”

The customer asked for longer range pricing stability and the distributor pushed competitors out of the way with a pricing agreement. Some of these are well crafted, while others ask the question: Exactly when will the distributor ever be able to execute a price increase?

Any agreement over one year old is ripe for a price increase, regardless of your current margin. With exception given to a limited number of commodities, it’s just not reasonable to assume the cost of anything has remained the same for over a year. I recommend a proposed price increase of 2-3 points here.

When establishing new agreements, put in openings for new price increases in the future. Ideally, these would be tied to a six or twelve month cycle.

“Review all Manufacturer extended Special Pricing Agreements”

These pricing agreements negotiated trilaterally with the manufacturer, distributor and customer. Typically, distributors raise the price only when the manufacturer raises the price. Sometimes, the manufacturer price increases are not passed along to the customer. This needs to be addressed as soon as possible.

Whatever the manufacturer’s increase, move the gross margin up at least full point. To illustrate, the manufacturer increases the distributor price by 2.75 percent, the distributor increases the customer price by 3.75 percent.

Click here to read the complete article.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can subscribe to our Strategic Pricing Pays blog or follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

Six Sigma Pricing > Control: Set and Enforce Pricing Authority Levels and Repeat Previous Steps

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This is the final article in our six part blog series on how manufacturers and distributors can apply Six Sigma methodology to the pricing function to generate repeatable margin gains. This blog covers the importance of setting and enforcing pricing authority levels and repeat previous steps as continuous improvement never stops.

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As a quick review, here is the Six Sigma Process as described by Wikipedia:

“Six Sigma seeks to improve the quality output of process by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, mainly empirical, statistical methods, and creates a special infrastructure of people within the organization (“Champions”, “Black Belts”, “Green Belts”, “Yellow Belts”, etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified value targets, for example: reduce process cycle time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits.”

As we covered in our last article on this topic, it is crucial that you build processes, systems and tools to assist teams and create reporting tools to track improvements and implement real-time visibility into business processes defects to ensure you are focusing your improvement efforts in the right areas.

In the Control phase, our job is to make sure the improvements we have put in place – stay in place. To achieve this you want to chart performance against upper and lower control limits. Run charts show single values plotted over time and indicate trends of process & shifts in process performance.

The key to success it to continuously monitor performance and measure against the control limits via Control Charts which allows you to:

  1. Study process variation over time
  2. Monitor and improve process performance
  3. Maintain “In-Control” processes

Additional benefits of The Six Sigma Pricing Control phase include:

  • Developing an effective “Control Plan Audit Process”
  • Identifying opportunities for improvement in processes, tools, and or behavior
  • Establish a “Pricing Authority Matrix”
  • Develop “Profitability Improvement Plans” for every customer
  • Developing Change Management strategies and plans

The following are the five areas we covered in this blog series that will helped demonstrate a proven pa to Six Sigma Pricing Excellence and links to additional blogs and other content.

  1. Define: set roles, responsibilities, and goals for the team in alignment within the business
  2. Measure: build correct measurements and incentives for each person
  3. Analyze: use reporting tools to find opportunities to grow or challenges to fix
  4. Improve: build processes, systems and tools to assist teams and create reporting tools to track improvements
  5. Control: set and enforce pricing authority levels and repeat previous steps as continuous improvement never stops

Six Sigma Pricing related articles:

Six Sigma Program Overview

Six Sigma Master Blackbelt Greg Preuer, of SPA has created the first course designed to apply time tested Six Sigma methodology to pricing.  Those who study with Greg will learn not only how to drive the pricing process but how to sustain the gains and automate the process.  They will become Six Sigma experts (Blackbelt) in business process with a focus placed squarely on price management.

“Over time we discovered the most critical part of moving the pricing process forward came in helping people deal with change. Establishing a plan for the human reaction to all change is incredibly important.”

– Greg Preuer

Graduates from this course will learn to chart a clear path to pricing improvement.  They will learn each of the following steps:

  • How to design and design goals which are consistent with their company’s pricing strategy.
  • How to measure and identify characteristics critical for pricing success.
  • How to analyze the current situation and steps along the way.
  • How to design an improved alternative which moves closer to the desired result.
  • How to verify that actions taken create the right results.

A Pricing Process founded on SPA’s Six Sigma Program includes the following:

  • Negotiating strategy and tactics
  • Value-based pricing
  • Automated decision making tools
  • Customer Profitability improvement plans
  • Sales team selling value
  • Pricing strategy and leadership
  • Consistent and fair pricing architecture
  • 2 to 4% growth in GM%
  • Pricing based on customer sensitivity
  • Continuous improvement focus

To learn how you can realize the benefits of SixSigma Pricing, contact SPA today at info@strategicpricing.com or 216.455.1545.

 

SPA Events

Click here for other SPA event dates and times including our upcoming webcasts.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

Six Sigma Pricing > Improve: Build Processes, Systems and Tools to Assist Teams & Create Reporting Tools to Track Improvements

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This is the fifth in a six part blog series on how manufacturers and distributors can apply Six Sigma methodology to the pricing function to generate repeatable margin gains. This blog covers the importance of driving incremental improvements through building processes, systems and tools to assist teams and create reporting tools to track improvements.

All pricing practice leaders know a disciplined process is needed to create and maintain Pricing Excellence – to effectively drive incremental improvements your team must focus on these four areas:

  1. Build process, systems & tools to assist team in exceeding their goals. (Automate at all cost)
  2. Hire based on foundational skills versus experience
  3. Train teams on key foundational skills that they will need to exceed their goals.
  4. Create reporting tools to track improvements

Processes, Systems, and Tools

As we covered in our last article on this topic, it is crucial that you implement real-time visibility into business processes defects in the Analyze phase to ensure you are focusing your improvement efforts in the right areas.

Other key elements of this phase include:

  • Base lining your current pricing performance helps to understand what the potential improvement can be.
  • Benchmark your goals and objectives based on the leader in your industry to drive toward World-class performance.
  • Creating playbooks allows you to go from identifying to rectifying deficiencies in your pricing process.
  • Implement automated deal tools so you can play offense or defense when appropriate by being able to make dynamic pricing decisions.

Hiring and Training

The real key to long-term success and to achieve Pricing Excellence – people. Always choose character over experience. Pricing is hard and you will train them to make excellent pricing decisions but they must have some core traits. Leadership, communications skills, and an analytical mind are the three most important traits. Quantitative, numbers driven decision makers such as former military academy grads, quantitative undergrad (Finance, Accounting, Physics, etc.) majors who also participated in a team sport, and yes even select sales people in your own company make great pricers.

To achieve long-term success, an effective and robust training program must be developed. It must include everything pricers will need to be successful and must be geared towards developing a proactive approach to identifying improvement opportunities in margin, market share, etc.  They must be constantly driving change – the ability to make decisions faster and more accurately is a major competitive advantage.

Reporting

Reporting tools to track performance in all areas are a must to drive profitable growth in your business and to drive discipline in the revenue side of your business.

Automated tools are needed to make effective decisions based on analytical scorecards. Answers to 95% of the questions about a deal should be at hand in near real-time and in a clear and concise format.

Creating Standard Operating Procedures are also key and must detail who does what in each step of each process and how decisions are made to eliminate confusion over price setting and approval authority, etc.

Six Sigma Program Overview

Six Sigma Master Blackbelt Greg Preuer, of SPA has created the first course designed to apply time tested Six Sigma methodology to pricing.  Those who study with Greg will learn not only how to drive the pricing process but how to sustain the gains and automate the process.  They will become Six Sigma experts (Blackbelt) in business process with a focus placed squarely on price management.

Graduates from this course will learn to chart a clear path to pricing improvement.  They will learn each of the following steps:

  • How to design and design goals which are consistent with their company’s pricing strategy.
  • How to measure and identify characteristics critical for pricing success.
  • How to analyze the current situation and steps along the way.
  • How to design an improved alternative which moves closer to the desired result.
  • How to verify that actions taken create the right results.

A Pricing Process founded on SPA’s Six Sigma Program includes the following:

  • Negotiating strategy and tactics
  • Value-based pricing
  • Automated decision making tools
  • Customer Profitability improvement plans
  • Sales team selling value
  • Pricing strategy and leadership
  • Consistent and fair pricing architecture
  • 2 to 4% growth in GM%
  • Pricing based on customer sensitivity
  • Continuous improvement focus

To learn how you can realize the benefits of SixSigma Pricing, contact SPA today at info@strategicpricing.com or 216.455.1545.

The following is the remaining area we will dive into in a future article in this blog series that will help illuminate the path to Six Sigma Pricing Excellence.

  1. Control: set and enforce pricing authority levels and repeat previous steps as continuous improvement never stops

Upcoming SPA Events

Set You and Your Team Up to Win Better Agreements at Battle For Margin

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Your organization’s profits depend on the individual and collective negotiation skill of your employees – from sales to purchasing. The Battle for Margin negotiation intensive is a rare opportunity to dive deeper into negotiation strategy that will immediately drive for more profitable agreements. Don’t you and your team deserve to be set up for success? Don’t miss the Battle for Margin.

It will be held in Miami at February 9-10 at the Grand Beach Hotel Surfside.

Get negotiation intelligence you’ll find nowhere else:

Revolutionize how you and your team view negotiation. Give your organization the tools and knowledge to drive more profit than ever before with compelling and eye-opening case studies, critiques, and group exercises. Instill knowledge fast. The day will fly by because our seminars are purposefully entertaining and educational; people learn more when they’re having fun.

Attendee Testimonials

Here what our clients have to say about the power of strategic pricing tools from SPASigma Negotiation Training Seminars.

“SPASIGMA breaks the standard mold of slow pace seminars. It’s engaging, fun, and interactive in a setting that feels warm and comfortable.”

     — Mitch Koepp, Marketing Manager, All World Machinery

Other SPA Events

Click here for other SPA event dates and times including our upcoming webcasts.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

Six Sigma Pricing > Analyze: Identify and Understand Opportunities to Grow Margins and Create Reporting Tools to Identify Defects

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This is the fourth in a six part blog series on how manufacturers and distributors can apply Six Sigma methodology to the pricing function to generate repeatable margin gains. This blog covers the importance of effective analysis of the right measurements and metrics to identify the root causes of defects in your pricing process.

All pricing practice leaders know a disciplined process is needed to create and maintain Pricing Excellence – effective defect analysis must cover these five areas which can be major sources of variation across commercial processes:

  1. People
  2. Information
  3. Tools / Systems
  4. Environment
  5. Methods

This crucial step leverages the measurements and metrics you have mindfully constructed to identify what needs improvement and what/where are the sources of defects in the process.

A company must properly analyze anything that impacts pricing performance and then use these insights and data to make meaningful improvements that will help you achieve your business goals. The following lays out some effective methods for the analysis phase.

Cause and Effect Analysis:

  • Diagram the relationship of the 5 sources of variation
  • Build a Cause and Effect Matrix to quantify impact of each process step
  • Select key sources of variation throughout the process
  • Capture 2-3 potential root causes from diagram
  • Dig deep into controls and compensation
  • Ask why multiple times

Process Map Analysis:

  • Diagram the process and hunt for bottlenecks or other defects of each process step
  • Chart metrics to see if the process appears stable or not
  • Use Pareto Charts, Histograms, Box plots, Scatter Plots, etc. to visually determine data distribution and variation

Six Sigma Program Overview

Six Sigma Master Blackbelt Greg Preuer, of SPA has created the first course designed to apply time tested Six Sigma methodology to pricing.  Those who study with Greg will learn not only how to drive the pricing process but how to sustain the gains and automate the process.  They will become Six Sigma experts (Blackbelt) in business process with a focus placed squarely on price management.

Graduates from this course will learn to chart a clear path to pricing improvement.  They will learn each of the following steps:

  • How to design and design goals which are consistent with their company’s pricing strategy.
  • How to measure and identify characteristics critical for pricing success.
  • How to analyze the current situation and steps along the way.
  • How to design an improved alternative which moves closer to the desired result.
  • How to verify that actions taken create the right results.

A Pricing Process founded on SPA’s Six Sigma Program includes the following:

  • Negotiating strategy and tactics
  • Value-based pricing
  • Automated decision making tools
  • Customer Profitability improvement plans
  • Sales team selling value
  • Pricing strategy and leadership
  • Consistent and fair pricing architecture
  • 2 to 4% growth in GM%
  • Pricing based on customer sensitivity
  • Continuous improvement focus

To learn how you can realize the benefits of SixSigma Pricing, contact SPA today at info@strategicpricing.com or 216.455.1545.

The following are the two remaining areas we will dive into in future articles in this blog series that will help illuminate the path to Six Sigma Pricing Excellence.

  1. Improve: build processes, systems and tools to assist teams and create reporting tools to track improvements
  2. Control: set and enforce pricing authority levels and repeat previous steps as continuous improvement never stops

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

Six Sigma Pricing > Measure: Build Measurements and Metrics Plan for Pricing Team Member Assessment and Incentives

Posted on

This is the third in a six part blog series on how manufacturers and distributors can apply Six Sigma methodology to the pricing function to generate repeatable margin gains. This blog covers what to consider in building measurements and a metrics plan for pricing team member assessment and incentives.

All pricing practice leaders know a disciplined process is needed to create and maintain Pricing Excellence – how to measure and incent the team to achieve excellence is key.

“Discipline is the defining fire in which talent becomes ability”

     – Roy Smith

Applying Six Sigma to pricing is clearly a better way to go to make pricing processes optimal – but…

How do we measure our progress?

How do we set proper incentives for team members?

This crucial step lays the foundation for success and requires building measurements and metrics to identify what needs improvement thoughtfully, completely, and in alignment with your business goals.

A company must properly identify anything that impacts pricing performance and measure it mindfully. Identifying “Critical to Quality” (CTQ) components for each person’s role in the process is foundational to correct measurements. It is very important to choose wisely which measurement is appropriate for each role and incentives must be tied to these.

Few things have the ability to motivate people more than performance measures tied to their pay and incentives. Focus on a limited set of measurements that are tied closely to profitability and then hold people accountable for their performance against those measurements.

Features of CTQ’s:

  • What: must have specific and correct criteria.
  • How: must have a method to measure the criteria.
  • Must be impactful to you and the business
  • Define what you are trying to evaluate
  • Give a precise description that everyone will understand.
  • Decide how you will attach a value to what you are measuring.

Measurements must be simple, possess real business impact, reflect improvements over time, and be compared to business goals and market realities.

Criteria for an excellent pricing measurement:

  • Tracks the differences of value across the customer segments.
  • Tracks the differences in cost to serve across the customer segments.
  • Easy to measure & enforce
  • How does the measurement position versus competitors price levels?
  • Align the measurement with customer’s value received by using product or service

Six Sigma Master Blackbelt Greg Preuer, of SPA has created the first course designed to apply time tested Six Sigma methodology to pricing.  Those who study with Greg will learn not only how to drive the pricing process but how to sustain the gains and automate the process.  They will become Six Sigma experts (Blackbelt) in business process with a focus placed squarely on price management.

Graduates from this course will learn to chart a clear path to pricing improvement.  They will learn each of the following steps:

  • How to design and design goals which are consistent with their company’s pricing strategy.
  • How to measure and identify characteristics critical for pricing success.
  • How to analyze the current situation and steps along the way.
  • How to design an improved alternative which moves closer to the desired result.
  • How to verify that actions taken create the right results.

A Pricing Process founded on SPA’s Six Sigma Program includes the following:

  • Negotiating strategy and tactics
  • Value-based pricing
  • Automated decision making tools
  • Customer Profitability improvement plans
  • Sales team selling value
  • Pricing strategy and leadership
  • Consistent and fair pricing architecture
  • 2 to 4% growth in GM%
  • Pricing based on customer sensitivity
  • Continuous improvement focus

To learn how you can realize the benefits of SixSigma Pricing, contact SPA today at info@strategicpricing.com or 216.455.1545.

The following are the three remaining areas we will dive into in future articles in this blog series that will help illuminate the path to Six Sigma Pricing Excellence.

  1. Analyze: use reporting tools to find opportunities to grow or challenges to fix
  2. Improve: build processes, systems and tools to assist teams and create reporting tools to track improvements
  3. Control: set and enforce pricing authority levels and repeat previous steps as continuous improvement never stops

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

Six Sigma Pricing > Define: Set Pricing Team Roles and Responsibilities, Create Goals Properly Aligned with Your Business

Posted on

This is the second in a six part blog series on how manufacturers and distributors can apply Six Sigma methodology to the pricing function to generate repeatable margin gains. This blog covers what to consider in defining pricing team members roles and responsibilities and setting properly aligned goals.

All pricing practice leaders know a disciplined process is needed to create and maintain Pricing Excellence.

As we covered in the first blog in the series, applying Six Sigma to pricing is clearly a better way to go to make pricing processes the best they can be – but… How do we get there from here?

The first step requires defining what needs improvement thoughtfully, completely, and in alignment with your business goals.

Before you can begin to set up processes to measure, analyze, control, and continuously improve your pricing processes, one must define what the problem is without stating the solution.

A starter list of what you will need to define follows:

  1. What is goal for setting up a pricing team?
  2. What part of the pricing process needs to improve?
  3. Can you identify the root problems from a numerical perspective?
  4. How often does the problem occur?
  5. What will the pricing team structure be?
  6. Where will the pricing team reside in the organizational chart?
  7. What roles are needed on the pricing team?
  8. What responsibilities will each team member have?
  9. What level of experience and skill sets are needed?
  10. Do we look internally for team members or source from outside?

SPA’s Six Sigma training drives real results focused on profitable growth and continuous improvement.

“Basic human processes are 4 Sigma at best … 99% good is just not good enough.”

Greg Preuer – Former Pricing Director at and Cooper Lighting and General Electric

Per Wikipedia Six Sigma …

“…. seeks to improve the quality of the output of a process by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, mainly empirical, statistical methods, and creates a special infrastructure of people within the organization, who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has specific value targets, for example: reduce process cycle time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits.”

A Pricing Process founded on SPA’s Six Sigma Program includes the following:

  • Negotiating strategy and tactics
  • Value-based pricing
  • Automated decision making tools
  • Customer Profitability improvement plans
  • Sales team selling value
  • Pricing strategy and leadership
  • Consistent and fair pricing architecture
  • 2 to 4% growth in GM%
  • Pricing based on customer sensitivity
  • Continuous improvement focus

Six Sigma Master Blackbelt Greg Preuer, of SPA has created the first course designed to apply time tested Six Sigma methodology to pricing.  Those who study with Greg will learn not only how to drive the pricing process but how to sustain the gains and automate the process.  They will become Six Sigma experts (Blackbelt) in business process with a focus placed squarely on price management.

Graduates from this course will learn to chart a clear path to pricing improvement.  They will learn each of the following steps:

  • How to design and design goals which are consistent with their company’s pricing strategy.
  • How to measure and identify characteristics critical for pricing success.
  • How to analyze the current situation and steps along the way.
  • How to design an improved alternative which moves closer to the desired result.
  • How to verify that actions taken create the right results.

To learn how you can realize the benefits of SixSigma Pricing, contact SPA today at info@strategicpricing.com or 216.455.1545.

The following are the four areas we will dive into in the remaining articles in this blog series that will help illuminate the path to Six Sigma Pricing Excellence.

  1. Measure: build correct measurements and incentives for each person
  2. Analyze: use reporting tools to find opportunities to grow or challenges to fix
  3. Improve: build processes, systems and tools to assist teams and create reporting tools to track improvements
  4. Control: set and enforce pricing authority levels and repeat previous steps as continuous improvement never stops

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

How to Leverage Six Sigma Methodology to Drive Continuous Margin Improvements

Posted on

This is the first in a six part blog series on how manufacturers and distributors can apply Six Sigma methodology to the pricing function to generate repeatable margin gains.

A disciplined process is needed to create Pricing Excellence – SPA’s Six Sigma training drives real results focused on profitable growth.

“Measure of success at strategic pricing is not how much it increases price but how much it increases profitability.”

Thomas Nagle – Professor, University of Chicago

Current State of Pricing

  • Limited negotiation skills
  • Cost + pricing
  • No analytical tools
  • No profitability improvement plans
  • Sales rep discount vs. sell
  • Reactionary pricing tactics
  • Inconsistent pricing structures
  • No growth in GM%
  • Ignores market reality
  • No strategy to improve margins

Six Sigma Pricing

  • Negotiating strategy and tactics
  • Value-based pricing
  • Automated decision making tools
  • Customer Profitability improvement plans
  • Sales team selling value
  • Pricing strategy and leadership
  • Consistent and fair pricing architecture
  • 2 to 4% growth in GM%
  • Pricing based customer sensitivity
  • Continuous improvement focus

So clearly the latter is the better way to go – but… How do we get there from here? What are the steps and areas of focus that will get us there successfully?

The following are the five areas we will dive into in this blog series that will help illuminate the path to Six Sigma Pricing Excellence.

  1. Define: set roles, responsibilities, and goals for the team in alignment within the business
  2. Measure: build correct measurements and incentives for each person
  3. Analyze: use reporting tools to find opportunities to grow or challenges to fix
  4. Improve: build processes, systems and tools to assist teams and create reporting tools to track improvements
  5. Control: set and enforce pricing authority levels and repeat previous steps as continuous improvement never stops

Six Sigma Master Blackbelt Greg Preuer, of SPA has created the first course designed to apply time tested Six Sigma methodology to pricing.  Those who study with Greg will learn not only how to drive the pricing process but how to sustain the gains and automate the process.  They will become Six Sigma experts (Blackbelt) in business process with a focus placed squarely on price management.

Graduates from this course will learn to chart a clear path to pricing improvement.  They will learn each of the following steps:

  • How to design and design goals which are consistent with their company’s pricing strategy.
  • How to measure and identify characteristics critical for pricing success.
  • How to analyze the current situation and steps along the way.
  • How to design an improved alternative which moves closer to the desired result.
  • How to verify that actions taken create the right results.

To learn how you can realize the benefits of SixSigma Pricing, contact SPA today at info@strategicpricing.com or 216.455.1545.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.