Think about some of the people in your team. Then say quickly what is their main function in the organisation.
Whatever you think of (development, project management, QA, sales, marketing), you have to add something else on their list of responsibilities: pricing.
They are all also working in pricing.
Any service or product can be described by 2 variables:
- The value it brings to the buyer
- The price the buyer has to pay
This is true for any transaction on this planet.
It doesn’t matter if we are talking about B2B contracts, consumers at the supermarket, governments buying supplies for offices, blackmarket transactions or exchanges of toys between 10-year olds.
Value and Price.
Price and Value.
When we think about B2B software services and the value cycle for companies in this industry, it doesn’t have to be too complicated.
Some people in the organisation are involved in creating and delivering value.
Others are tasked with communicating and documenting value.
Someone needs to focus on capturing some of that value back (although usually this responsibility falls between the cracks, with negative and predictable outcomes).
And because things constantly change, someone should be responsible for making sure that the organisation is creating the right type of value. Or the value that customers are looking for.
WHAT THIS MEANS FOR YOU
Looking at this picture, I can’t help thinking that it’s not that complicated. It’s not really rocket science.
At the same time, past experiences have shown why people think that good pricing is magic. Especially if we rely on Arthur C. Clarke’s definition:
Any sufficiently advanced technology is indistinguishable from magic.