Well, hello and thank you all so much for yet another
professional Pricing Society podcast and joining us for
today's discussion. My name is Terrence and we have
a great conversation ahead of us.
Today we have George Garza, he's a strategic consultant at an
amazing company called Pros, who by the way will be at our
Atlanta conference this upcoming fall, October 10th through the
13th. And they are a long time PPS
sponsor, so we're excited to see them yet again.
George is gonna be speaking with us about pricing as a team
sport. George, how you doing today?
I'm great. Thank you.
How are you doing well, doing awesome.
Glad to have you here. Glad to.
It's a nice, bright morning today over on my side of town.
I'm actually based in Atlanta right now.
I'm not sure if you guys are. Where are you guys based out of?
I'm here in Houston, Houston. Nice.
Is it hot over there like it is in Atlanta?
Yeah, okay. Cool.
We'll go ahead and dive into
this conversation. I wanted to ask you first, you
know, what's the significance of digital transformations when you
think about today's business landscape?
Yeah. So when you think about today's
business landscape, right, especially like in a post COVID
world, a lot of companies are looking to rein in their
pricing. Right.
There's a lot of dynamic conditions now.
They want to achieve pricing parity across their different
business channels, increased profits, right, gain market
share, bringing new customers. But you really saw a lot of
companies weren't able to react fast enough with their current
systems during COVID, right when all those changes happen and
then afterwards, right. So companies are looking to move
toward a towards a more frictionless, seamless and
digital experience throughout their entire organization.
Nice, nice, OK, which makes sense.
I mean that's kind of the way the future is taking us now.
When when you think about the path of digital transformations,
what does it typically look like?
Or what should someone who has is not familiar?
What should they expect to encounter?
Yeah. So on that, on that path right
there, there's a series of steps as as we like to think of it,
right, it's a pricing, pricing journey and so.
Most customers, right, There's the first phase and there's the
idea of reactive pricing. And that's when a customer is
working out of Excel spreadsheets or companies
working out of Excel spreadsheets, right.
They're very reactive on their pricing.
They don't, they they can't be proactive and strategic.
And then so you think of the next step beyond that okay, how
do I grow, how do I get better? And that's where you do the
initial price management. So you start to apply some
rules, some constraints, some methodology into how you're
pricing. And so now you have more of a
structure. After that, as you grow in your
journey towards that maturity model, you introduced the idea
of price guidance, right. And so this is you know would be
like a I powered price optimization where you're
looking at your customers and their willingness to pay and how
you can use that to help your sales team and your pricing
teams strategize and execute on pricing.
And then after that you can move into the idea of integrated
ecommerce, right, so. Now you can bring in your
ecommerce platform ensuring that your, your price is holistic
throughout your entire business and which leads us to the final
step of Omni channel optimization.
And so now all of your business, it's in harmony in terms of how
the pricing is executed, right. You've got the different silos
all working together to ensure that the execution of that price
is is, is, is powerful and and consistent.
Yeah, that's a lot of pathways to travel to make sure
everything is all synced and you know, kind of flowing together
in unison. Who Who makes this possible?
You know, how does it happen? Who makes this possible?
Yeah, I know that that's a really good question.
I mean, when you think about pricing, you think about these
digital transformations, right? Everyone's first thought is, oh,
it's just a pricing team, but that's not necessarily true,
right, because in any kind of digital transformation.
You're going to have at least five key functional areas that
are going to be most affected by pricing.
And of course, the 1st is pricing, the 2nd is the sales
team. Then you have the executive
team, the finance team, and then your IT team, right?
And so alignment across these different stakeholders is key
and critical, right, in order to make sure that the project is a
is a success and that, you know, everything can work seamlessly.
Okay. Yeah, that makes sense.
That's a lot of different departments to make everything
work seamlessly, which, you know, it takes a lot of minds, a
lot of hands to make everything kind of flow smoothly,
especially in regards to pricing.
You know, why Is it important for organizations really in any
kind of industry to consider these different 5 essentially
slices of the pie when thinking about digital transformation?
Yeah, No. That's, that's an excellent
question, Terrence. And so if you think about it,
pricing is one of the most important decisions a business
can make, right. And it's going to have a
significant impact on profitability, market share,
customer satisfaction, it's going to, you know, impact your
overall revenue, your integrations as an IT team.
So at the end of the day, if all of these five slices are
considered, you'll have a higher chance of success on your
transformation and you'll have buying and adoption from from
the entire organization, Okay good, which makes perfect sense.
Now when you think about these pricing pathways and just five
slices, these five different departments coming together to
make everything flow smoothly in unison, what are some of the
most common pricing mistakes that businesses often, you know,
find themselves in or they tend to make?
No. So that's a good question,
Terrence, right. So the most common pricing
mistakes that you know businesses can make, I'd say the
first one. Is siloing where they're not
working together with those other slices of the pie, right,
because that's going to lead to reduced adoption and decrease
the the odds of success for this transformation.
All right. And then the the second one
would be to consider the importance of IT when making
these decisions, right, because they're the ones that are going
to have to own the product at the end of the day.
So you want to make sure that they're bought in, they
understand what's at stake, who's going to, you know, own
what that way. You have everything you need to
ensure the pipes are clean to get the data to have accurate
pricing. That's interesting from the IT
aspect. I have a question I want to ask
about the IT aspect, but before I ask that I have one more, I
want to kind of ask that's still related to the digital
transformations. And in this realm, how can
pricing help to optimize the organization's revenue and
margins and essentially their centric pricing process?
So pricing can help because first you want to determine
right, what the right price, right price for the right
product is. And so if you don't have the
proper data to make those decisions, then you're putting a
lot of guesswork with your pricing.
And if you aren't intelligent with those pricing decisions,
then you could be leaving a lot of money on the table right when
you think about pricing. There's a lot of factors that go
in if I have a glass of water, right?
And and you know, I'm like, hey Terrance, or I got a bottle of
water, right? I'm gonna sell to you right now.
What would you pay for it for a bottle of water?
Yeah, right now, now we're talking regular prices or
airport prices, regular prices. Yeah, $200.00, Two or three
bucks. Exactly.
OK, it's 110 outside and you know, we've been hiking for, you
know, six hours and you haven't had water.
How much would you pay for that? I pay more if I feel like I need
it. I'll pay more, yes.
I wouldn't deprive you of water in that situation.
So I just give it to you. But that's a good point.
Yeah, the idea is that people, there's different factors that
go into the perceived value or what people are willing to pay
or customers are willing to pay for anything, right.
So if you think about that right, you have the right data.
You now have a system that can use, you know, a I and machine
learning to optimize the pricing and not necessarily say this is
the only price it's going to be. But hey, here's a range of, you
know how, you know what, what's possible in the price, right?
And here's your success on that price then that can help you
have a better understanding of what's going to impact your
revenue and margin. That's good.
That makes a lot of sense and the analogy kind of puts it into
perspective as well. You know, if you feel like you
hiking prices makes more sense if people are in a more demand
of whatever the product or services.
I mean or or you know very real situation which you brought up,
which is the airport you. Go through the security line.
You don't have water anymore. It's like, exactly.
Yeah. And I'm out.
I'm based out of Atlanta, so we have Hartsfield Jackson which is
one of the busiest and the most populated.
So the prices over there are a little bit different than some
other airports. I would, I would say I want to
steer the question over towards regarding the IT department.
You know obviously the IT team is responsible for providing the
technology and data that a pricing team needs to make
informed decisions. What are some of the key IT
considerations for digital transformation?
You kind of alluded to it a little earlier in the
conversation, but because you brought that once before, I want
to kind of switch gears from the pricing aspect and kind of move
it towards it aspect, yeah. So that's a good question,
Terrence. So ultimately, right, the IT you
want them to ensure that the organization's data is secure
and compliant, right? And then you know as I stated
earlier, they want to consider the overall systems
architecture. So how our price is going to get
from the pricing team to the sales team?
How are the analytics going to get from pricing to finance?
How can the executive team get a view?
An understanding of everything that's happening with those
other slices of the pie and that's what comes down to that
systems architecture. Cool.
So the five slices of the pile, the pricing team, the sales
team, executive team, finance and the IT team.
I wanna ask you a bit of off script question.
I wanna ask you this question as well.
Who takes the reins? Where does the conversation
begin when considering changes in pricing, Considering things
like inflation, pricing, trends, who starts the conversation
amongst these these five different departments?
Yeah, it could come from the scenarios that you give.
You can come from primarily like the pricing team, the executive
team sometimes financed. It could come from the sales
team, right? Where they wanna, what they
wanna increase their sales, right?
And starts from there and how? What can we do to be more
competitive with pricing, But typically it'll be the executive
in, in context of pricing, it'll be the executive team or the
pricing team whether it's sales that originates the that pursuit
or it's a pricing team. They're both going to have to
come together in in that decision ultimately.
So and the executive team, right they they want to, they have a
strategy, they have a vision, they have a direction they want
to go and so okay. We want to execute and achieve a
certain amount of margin within you know the next three to four
years for instance or for five years.
Great. Well, how do you do that?
That's that's the next question. So the how will come down to the
pricing, how are we pricing today, how often are we changing
prices? You know, are we able to incur
costing data into our pricing and and execute on as quickly as
possible, right. So that's where the pricing team
will come in and start. Looking at how they can be
better at pricing and be faster. And then of course you know I'd
mentioned sales. Sales will then be the ones that
have to go out to the market and say all right, this is what
we're offering at this price, yes or no.
And if there's negotiation involved right then that then
you want to know how far can you go in either direction, right
when it's the the, the the where, where's your floor,
where's your, your, your expert price, right?
Things like that. So okay.
So essentially it can come from almost any direction.
It's situational, what it sounds like.
It is. You did break it down.
If it's from especially like the how, how we're gonna how we're
gonna communicate this price to our customers, how are we gonna
make this shift and make it reasonable and smooth.
So it's I'm glad you broke it down in the way you did cuz it
really can't come from any direction.
Cool, nice. So George Garza everybody,
Strategic Consultant for PROS, want to thank you so much for
your time today. Good Sir.
Friendly reminder, Pros will be at our Fall Conference in
October, October 10th through the 13th in Atlanta, GA Now one
more question for for you George, before I let you go,
where can listeners go to learn more about the different
resources you know you or pros have to offer or just to learn
more about you all in general? Just head on over to pros.com,
pros.com and we've got a number of assets and resources there
for people to get to know more about what we do.
Okay, cool. Sounds good.
Well, thank you so much for your time today, good Sir, and until
next time, we will speak to you all later.