Hello everyone, and welcome to Let's Talk Pricing, the official
podcast of the Professional Pricing Society.
I'm your host, Kevin Mitchell from PBS, and today I'm very,
very happy. I have the pleasure of speaking
with someone who's not only a seasoned pricing professional,
but is also a great partner of our organization and someone
that we are going to see at PPS profitable in Dallas in May and
that is Miss Deanne Hammer. Deanne is the Global pricing
Operations Director for Safety and Industrial Business Group at
3 M Of course, 3 M, as we all know, makes everything and
everything that goes into everything.
So Deanne has a very wide variety of experiences there.
She has an MBA, she has ACPP, and 29 years of professional
experience in marketing, product development, strategic and
operational pricing, and probably a few other disciplines
as well. So the end definitely brings an
incredible depth of knowledge to our experiences and to every
role that she's held. She's worked across both the
industrial and healthcare manufacturing industries and
proudly refers to herself as an accidental pricer.
Through it all, Deanne has made has remained committed to
building resilient, high performance teams.
I've had the pleasure of meeting many of her team members over
the years and they rave about her.
And she does all of this even in the face of rapid transformation
and change. So at our Sprint conference at
PPS Profitable, we are going to hear from Deanne with a keynote
address entitled price management, the Art of not
setting it and forgetting it. And also Deanne is going to Co
lead a one day full day CPP workshop with one of her team
members, Antonella Sunito and that is entitled action
practical pricing problems, a pricing escape room experience.
So we are very, very excited to talk with Deanne Hammer today.
So, Deanne, welcome to our podcast.
Hey, thanks, Kevin. Thanks for having me today.
I'm really excited for Dallas, really excited to see all my
friends in pricing, really excited about the topics that
we're going to see at the conference and hoping everyone
is just as excited as I am. Absolutely, Yeah, we are all
very excited and we are definitely looking forward to
seeing you there. So let's start with a couple big
picture questions about what's going to happen in Dallas and
the information we're going to get you there.
So we'll start with a look at your keynote once again,
entitled Price Management, the Art of Not Setting It and
Forgetting It. So I'm expecting some
information on change and dynamism and taking into account
all of the macroeconomic inside and outside externalities that
are going on. But what inspired you to focus
on the concept? Excuse me of price management
over the life cycle of a product.
You know, Kevin here, you know, in my 29 years of working in
this arena, I think it's one of those things that people kind of
forget about. You know, it's really exciting
to launch new products. You're doing a lot of market
research, you're getting a lot of data because a new product
and bringing that to life is really fun and, and new things
are always shiny and, and it's, it's really, really fun.
Maybe isn't as fun as, you know, reaching back into the pricing
closet, opening up the door and realizing it's full of stuff.
You don't know where all this stuff came from and, and now you
have like 2 hours to clean it. You're like I, I, I just don't
want to. And you shut the door on that
dirty pricing closet and you kind of walk away.
So it's one of those spaces that we we all know about, right?
Like we know it's there, but we don't really want to do it
right? It's, it's a lot of work and
it's maybe not always recognized as a way to really make sure
that you're getting all the revenue that you deserve.
So I thought, hey, maybe it's time to talk about this a little
bit more in depth and remind people at a time in in 2025 and
how the year has started for many prices with the external
activity. Maybe it's one of those things
that's maybe a little bit more comfortable right now because if
it's pricing that you can do and you can actually find revenue
and opportunities there for your firm.
So yeah, I'm excited about it because it's the forgotten place
for pricing sometimes. Yes, that's absolutely right.
Sometimes we can be so distracted by what's new and
what's novel, we can forget about the old so-called cash
cows going back to our our Business School days from a
little while ago. But the things that really,
really can have an impact on our companies that can allow us to
exceed our expectations and move on there.
So as you stated, yeah, new things are bright and shiny and
attract a lot of attention. But sometimes it is the old
so-called workhorses of the organization where there's
really a lot of potential and a lot of opportunity for continued
growth as we progress through the life cycle of the product.
And even towards the end of a product's life cycle, there can
still be great opportunities for profitability and growth and
reinvestment in the next new product with gains that we can
right there. So I think that that's a great
point. So Deanne, I know that you make
the case that while initial pricing decisions are often
backed by deep research, a lot of analysis, a lot of thought,
but price management after the launch is sometimes where a lot
of companies fall short. Can you talk about some of the
risks associated with a set it and forget it pricing mind
frame? Yes, I think some of the things
are hard to see. So one of the things that I've
noticed is that you are not really always able to measure
productivity loss. And I think about like your
sales teams are, are people that that are really trying to sell
your whole portfolio. And if they have to keep
continuing to come in and ask for a discount or you know, a
promotion because it's no longer competitive, that's taking their
time when they could just be out selling, right?
So your price value is off. And an individual portfolio
owner might say, well, that's OK, it's just these 10 things.
But if you look across your whole firm, it could be hundreds
of things. So, and usually then what kicks
in is that psychology by that portfolio owner that says, but
if I drop price all the time, then I have a volume hurdle to
overcome, right? So they're thinking, why not
just take new business at the lower price and leave my old
business at the higher price because my margin is better,
right? But they're not really digging
into the numbers. They don't really understand
like how much is being sold at different price points because
to be honest, it's a lot of work, right?
And, and now that I've got, you know, 20-30 years of a life
cycle going on, even all those changes that have created to the
place that you're in is overwhelming.
So when it becomes overwhelming, we, we just kind of again, shut
that door, walk away. Maybe that's not so interesting.
But really that productivity loss, you know, creating that
room for growth. I always say like, how can you
extend the life cycle of a product?
You could really extend the life site.
It's not just about dropping price, it's about extending that
life cycle, keeping people interested.
It's also a brand. You could compromise your brand,
right where you're saying, oh, well, you know, your, your
widgets, they're overpriced by 20%.
You're always trying to take advantage of of me as a
consumer, right? So be careful because you don't
want to get a reputation for having pricing that's wrong and
that makes it difficult to buy from you.
And, and we all know, right, like Kevin, you're a consumer.
I know, I know you're out there on Amazon.
I know you're out there on different websites, right?
You have favorite things you like to buy, right?
And you all know that if the pricing was really wrong, you
probably wouldn't buy those things on those websites
anymore. So think about that.
You know what, when you're out there pricing and you're not
managing your price, you're losing buyers and and you don't
want to lose buyers because the lower your volume goes, that's
going to also cost. That means your cost could go
up, right? So be careful.
Like think about like, think about like I just talked about
four different things that can really make an impact on your
profit and loss statement, right?
Like manufacturing, keeping your manufacturing facility full
sales productivity and time, extending that life cycle,
taking more share, those are all things that price management
allows you to do with existing products that might be around a
little while. They're vintage.
They're vintage products. Kevin, we have to sell this.
Understood. We like vintage products.
That's great. We love vintage products,
they're amazing. Definitely.
And I like your statements there.
And the good thing about our part of the business world, the
good thing about pricing and revenue management is that
basically we should be central to a lot of different thought
processes, a lot of different goals, a lot of different
departments, internal factors, external factors, marketplace
factors and so on and so forth. And some of the things you
mentioned there is if we are manufacturing and if we're
keeping our plants open and running, that can also make us
more efficient and give us a better opportunity to provide
better service to our marketplaces.
Also, it's very, very critical for businesses in tough times
and so-called interesting times that if you are easy to do
business with, then that is often a product attribute, a
feature, a benefit in itself. If you are difficult to do
business with, then that is a very difficult thing to
overcome. And you mentioned this also when
you talk about we can't compromise our brand.
So it's not only the physical product, but it might be the
services, the delivery, everything that goes around your
product. If that is not all in your
favor, if that makes it hard to do business with, then that
takes time and effort to overcome that.
In addition to, as you mentioned, the value of your
sales person's time and effort, they've only got so many hours
in a day that we cannot make more time.
That's the one resource that is truly, truly limited for all of
us. We are never going to have more
than 24 hours in a day. And so if we can work with them
to be as efficient, effective as they can, that's also another
benefit for everyone involved. So I love the statements there
about how all of this can come from thinking about the product
life cycle not being, you know, we'll set it and let it go
through and, and forget it. And basically we have to
remember to keep things up to date because that helps us to be
better partners for our customers, for our internal
teams, our external teams and so on and so forth there.
And there's so much there that really catches my eye.
But one of the things that we have talked about is the idea
how, as you mentioned, price misalignment can chip away at
your profitability. So what are some of the other
key indicators that it may be time for a price redesign or to
rethink what we initially would have considered when setting a
price for a product or a service?
So. I would say one of the biggest
indicators for me is when your sales team continually asks you
to quote, right? So you know, and, and some
businesses are really updated with new software, right, about
doing that CPQ bid and quoting. If you're getting a lot of
requests to quote at a price that's different than your
current average selling price or different than your published
price, when you and you accept those quotes, you're like, Oh
yes, we'll, we'll take that. And all of a sudden you see that
you have a large percentage of your business going out through
custom quoting or unique price points.
That's maybe a sign that your price is not right, right there.
There must be a competitive offering out there that makes
your price too high. And maybe people love doing
business with you. Like they feel really good.
They like a lot of things about you, but your price for these
particular items is not good enough.
So that they need to ask for that.
That's usually the first indicator.
The other thing that's maybe a silent indicator that I've
discovered a lot of people, again, not a lot of time to look
as you look at that churn, like all of a sudden that business
was there and then all of a sudden you realize like maybe 90
days later, jeez, my sales are really down at that.
Now you've had inventory, so you haven't the manufacturing plant
maybe hasn't asked you like, hey, what's going on?
But all of a sudden it becomes very apparent that you've lost a
lot of business. Now you now you have to actually
figure out where did it go and who did it go to and why isn't
it there anymore? And that actually takes even
more energy, right? So I was telling people like,
don't be afraid about price management because the energy it
takes to find lost business and earn a customer back, it's
double like it's way more than that, right?
And, and you know, I, I would rather have more fun doing
pricing work then trying to figure out how to get business
back from somebody because what if they find out, Oh, that
competitive yours is also really nice.
They have a lot of nice products and it's really easy to buy
from. And you're like, shoot, now if I
even actually do the right thing for pricing, I, it doesn't
matter. Like they're, they're super
happy over here with your friends, right, Your other
friends, that's your competitor. So it's really hard to win
customers back. So be careful, be careful about
thinking this isn't really that important and you can just kind
of chip away and kind of do what I like to call it the management
of the day versus the strategy of the year, right?
So I would rather be strategic. I would rather put together a
credible pricing strategy that the market accepts and is
willing to pay for. Then kind of like every day
there's like a little fire burning and you have to manage,
manage, manage. That's exhausting.
It's not fun and we all know that pricing can be really fun.
So I think it's a chance for you to have a lot of fun in that
price management space. And also because there's so many
different levers that you get out of this that you can go to
your management team, whether it's decreased management cost,
you know, productivity growth, it really can give you that
shining moment of adding value to your company and your pricing
seat. Like there's so many levers to
touch. You can bring make happiness
such a big thing. And it's a really good feeling.
And I think people need to be drawn to that because sometimes
we're struggling for, for certain things.
This can be a really, I'm not going to say it's low hanging
fruit, but really they can be a lot of substance there that can
really bring value that makes your pricing department shine.
Excellent points and I love your description about looking at
exception management. If that becomes a full time job
in itself, then really you're being in the old 5 levels of
pricing. You know you're never going to
be above the firefighter. You're always putting out a
fire. That doesn't give me time for
strategic thought, that doesn't give you opportunities to move
forward. If that's taking all of your
time and energy, all of your sales managers time and energy,
all of your leadership's time and energy, then that's really
suboptimal because not only does that basically take all of the
emphasis away from things that you could be doing, but it's
making you focus on kind of low activities and to less
profitable work there if you're always doing something like
that. So yes, definitely agree it's
going to be strategic. It's good to remember if prices
are misaligned, let's not start replicating those errors over
and over again. Let's try to fix them.
That's going to give us the opportunity to move forward to
save time and energy for all parties involved and allow us to
do more strategic thinking down the line.
So that is a great way to put that.
So thank you very much for the explanation there and the end,
of course, very much looking forward to seeing you again at
our Spring conference. And we are going to talk about
some of your offerings and things like that later.
But I do want to ask one question about some actionable
tools and frameworks. So let's talk about some
analytical methods to price variance policies.
So without giving too much away, what is 1 practical take away
that people, when they come to our conference, we're going to
be in Dallas from Day 6 to night.
Of course, we're looking forward to seeing you there.
Tell us a little bit about 1 great practical take away that
you are going to hope people take back to their teams.
You know, there there's going to be, you're right, Kevin.
We have so many great tools. They're going to be really
exciting. I think one of the tools that
you're going to be able to take away from us is an easy and
easier way. So I, I know a lot of us are
really great with data, like we love it, right?
But one of the tools that we're going to give you is a way for
you to put that data into a tool set that allows you to pull it
out and talk to people that maybe aren't as detailed as we
are in pricing, right? So some of that is like, how do
I take, you know, 1000 things that really are exciting to us,
like bring it forward and sell that story to a leader, right?
That is a different thing. They I, I, I love a good
spreadsheet, Kevin, you know, you know, I love a good
spreadsheet. I love good AII love some good
software graphs. But we got to make sure that
we're paying attention that when we when we find something, we
can easily bring that forward to our leadership team and say,
here's what this means. So, so yes, there's going to be
tools there for you to use to, to figure out some challenges
about like, hey, is, is my pricing right?
Should I change my pricing? What does it mean?
Was this promotion successful? And at the same time, how to
deliver that in a meaningful way to a leader who just wants to
know, did I make money? Is it profitable?
Should I do this again? Why or why not?
Right. So that value selling, you're
like, but you're, you become a salesperson in pricing, right?
At some point, you got to sell the people who want to hear
about what you can bring. So we're going to, we're going
to teach how to be salespeople too.
And I know that sounds kind of scary.
You should never be afraid in, in our workshops, Kevin.
We're all, we're all friends and family and, and I promise you
that you will be a superstar when you're selling your pricing
story. So give it a chance.
I'm going to, I'm putting all my money on all these pricers
because they're you're, they're all great and they all have
something to offer and I know they can do it.
So. Very nice.
Yeah, I often tell pricing people, you know, our members
from across the globe that yes, we are all sales people because
you do have to sell these ideas inside your organization,
outside your organization. And I love your description of
even though we can be spreadsheet Wizards, Wizards
with pricing optimization software.
Analytical Wizards, statistical Wizards and so on and so forth
there. If you dump a lot of Greek
letters and XS and YS and coefficients and things like
that on senior leaders, it's just going to go right over
their heads. And also when we think about
that, we have to talk to people inside our organization in
particular, in a language that they can understand.
So with your leaders, yes, 32nd elevator speech, this is going
to make money. This is how we're going to do
it. AB and C boom, a first year MBA
who's a financial wizard. Feel free to talk spreadsheets
with him or her. And of course, you're
experienced salespeople. That's a completely different
discussion. So I like how we have to be the
artists and the scientists there depending on the market.
We have to be well-rounded and be able to talk to people in a
language that they can understand.
And we have to know their goals and how we have that Venn
diagram overlap with their goals as well and how we can be good
team members there. So that one is definitely not an
either or. That one has to be an and you've
got to be able to talk to to all of those groups.
You do, you do. And I went and you know, Kevin,
you're going to laugh because I always say like I it's like a,
the classical visual of a psychologist office, right,
where you have the couch. I would say like, welcome to the
pricing couch because a lot of people want to feel good about
your story, right? So we also become therapists.
So, so here we are. We're going to be here to help
you like get those people to feel the safe, they're going to
be safe and it's going to be OK. So, you know, we're going to get
you a degree in pricing therapy. I like it.
And yeah, being a therapist is a good one.
And that's also another world that we have with our sales
people as well. When we do have pricing changes
and they of course think that the world is going to end,
they're never going to get paid again.
There goes everything. And of course, we have to be the
ones that say, OK, we're going to take a deep breath, we'll be
your therapist here. We offer great products and
services and value. Here's why.
And we think that our marketplace is going to be
appreciative of that and we're going to get through it and
we're going to do great things. So I like how we have to be a
therapist on a couple different levels there as well.
And so your workshop that you're going to Co lead with our friend
Antonella Sunito is entitled actioning practical pricing
problems, a pricing escape room experience.
It's the first time that you're doing this workshop with this.
So in addition to what you mentioned earlier, can you tell
us a little bit about the escape room experience and another
sneak peek at some other things that our attendees might gain
from your full day CPP workshop? Sure.
So if you're someone who likes games, right, this this is the
workshop for you. So some, you know, it's always
great to listen and hear great information and take that in,
but some people just really want to get into it and actually do
things. So the escape room is designed
to give you a game that's a pricing game, right?
And a challenge and really for you to have to activate your
skill set. So it's a timed event, right?
Because there is going to be a winner.
So if you're competitive, this could be for you.
And so the other and you're going to get new tools.
So even if you're really an experienced pricer, this is
really a chance to be on a team, play a pricing game.
You might get a you, you can always walk away with something.
You're going to get at least a couple of tidbits, but you're
not going to be sitting in the room listening to me talk.
No, you're not going to be sitting in the room listening to
antebellum talk. We're going to give you a
little, a little starter and then we're going to start the
clock and you're going to be working on solving a pricing
problem. So I, I think for people that
enjoy games, they like complex problem solving.
They, they, they're competitive. This is going to be an all day
fun fest. And by the way, I'm going to
give you a sticker. So look, I want a sticker that
says you escaped the pricing room and some people might not
escape. Kevin, you, you have to know
like, like what, what if you don't solve the problem?
You don't get to open the next door to go into the next room.
We're going to help you. No worry.
There's no judgement. It's only fun.
But I but I think it's going to be a lot of fun for people that
just like to activate and do things in a way to learn it in
that style. So we hope you can join us
because I think it's going to be really fun.
Definitely. That does sound like that's
going to be a lot of fun. And of course, as pricing
people, as revenue managers, we often like games.
That may be a choice, but all of us have to love game theory and
kind of the implications in the aspects there because that's
just so critical to what we do. I know that we were all taught
in microeconomics one O 1, the horrible 45° downward sloping
price versus sales curve where, Oh yeah, I dropped my price 10%,
therefore automatically I'm going to sell 10% more widgets.
Of course, we in the real world know.
Yeah. Once you do that, your
competitors going to have a response, your markets going to
have a response. And that could go up, down or
sideways depending on a lot of market factors, many of which
are well beyond your control. So yeah, game theory.
I feel like you're already in the game because we have some of
these like what I'm going to call like external factor cards
that could just get played in the middle of your in the middle
of your game and you have to switch it off.
Like that could happen. It could happen, Kevin.
And then and then stuff happens and you got to change your
direction, right? Absolutely.
Yeah, that is intriguing and that sounds like a great real
life current very pertinent example as as we are talking now
where we really do not know what's going to happen in the
hours, days, weeks, months ahead.
There will be opportunities. There will be opportunities for
us to not set our prices and forget them because we will have
to be dynamic. We will have to change as the
market conditions change. And also it is really an
opportunity for us, as you've mentioned before, by being on
the front foot here that allows us to focus our energies better,
our leadership's energies better, our sales team's
energies better, instead of chasing exceptions and doing
exception management worried about we're discounting all the
time. Therefore, our price is really
just this mythological number that doesn't exist anywhere.
But really we have a lot of opportunities to take advantage
of that and to move forward there.
And Deanne, I know that we could talk forever on this topic, but
I believe that we are running pretty near on our our schedule
time here. We are really, really thrilled
that you are going to be on our program in Dallas.
For those of us who have not been to 1 of Deanne's
presentations yet, her experience with Three M, again,
a company that makes everything and everything that goes into
everything, her experience, really she is one of our most
highly rated speakers that we've had.
And we're really, really excited about your presentations coming
up with us. So thanks again for sharing your
preview with us today. We're really, really looking
forward to seeing you. And with that, definitely take
advantage of Deanne's workshop with Antonella Sunito.
And we are really looking forward to seeing you in Dallas
for PBS profitable from May 6th to May 9th.
And Deanne, thank you so much. Any final words for our audience
as we begin to run up against the clock?
My fault there. Oh, no.
Well, thanks for having me, Kevin.
I really appreciate it. And I would say if you're
listening to this and you haven't signed up, I, I know
Kevin will let you sign up. I know Kevin will let you
attend. So while you might have missed
the early bird pricing, the value is still there.
So sign up, get to Dallas. I, I mean, it's going to be so
fun. You don't want you, you have to
be there. So please join us.
We'd love to have you all and see you all in person.
So we'll see you there soon. Excellent.
Thank you, Deanne. So of course, you can check out
our schedules, our conference brochures, more information
about our event, about Deanne hammerherself@pricingsociety.com.
Deanne, very much looking forward to you and for our
people listening in, looking forward to seeing you as well.
You can always reach out to me with questions about anything
that PPS has to offer. And with that, everyone, please
keep an eye out for other Let's Talk pricing podcasts.
Thanks for listening. We will see you very soon in
Dallas. Thank you so much.