Why I Love Pricing

It's a great way to learn everything about a business

         The motto of all the mongoose family is "Run and find out."
                                       "Rikki-Tikki-Tavi" by Rudyard Kipling

It’s the beginning of the new year, and although somewhere some tiresome person will point out that is an entirely arbitrary division imposed upon the Earth’s progress around the sun, it’s not a bad time to think about our lives and priorities.

As I wrote in my post about how I found myself in a pricing career I didn’t plan to have a career in pricing until I found myself with one.

Recently I was having lunch with a mentor. I told him about how in a year or two when the company I work for now sells, I’d like to move to running a pricing consultancy full time so I could do pricing with lots of different companies rather than just one at a time.

He asked me if that was really what I wanted, since ten years ago I had wanted to become a segment general manager and perhaps someday a c-level executive. He himself recently moved from a General Manager role to a CEO role, so it’s a path he understands.

But the truth is, at this point I have really fallen in love with pricing. The reason for this has to do with what pricing is.

When you set a price for your product or service, and a customer pays that price, you and the customer are reaching an agreement on what value your work has to them.

A good price both leaves value for the customer (they are better off paying your price and getting your product than they would have been buying some competitive product or doing without) and value for you (you make money after covering your costs for producing and delivering the product and covering your overhead costs.)

This means that setting a good price involves developing a deep understanding of both your own business and your customer’s business.

Not every function within a company is like this. I’ve known accountants who, after years of working for a company, still only vaguely know how the company’s products are made or what they do. But with pricing, understanding the product — all the way from how it’s made to what customers value about it — is absolutely essential.

At a certain point in your career, you need to step back and examine what it is that you like about your job and what motivates you to do more. For a long time, I had simply thought about my career in terms of getting to the next step. I’m naturally competitive, and so whatever other people around me were trying to achieve was naturally something I wanted to compete for as well.

But as I finally stepped back over the last few years and thought about what it is that I like and what I want, I realized that two of the things I like most in my job are learning about how things work and helping people solve problems based on that knowledge. And that, really, is what pricing is all the time.

This is also why pricing is such an important thing for business owners and business leaders to involve themselves in.

If your price is based on the value you deliver to your customers, that’s something that a business owner or leader should understand better than anyone else. You don’t need to be an expert in pricing and all the pricing strategies and tactics a company can employ. Pricing professionals are ready and eager to help you by providing that information. But you are the key expert on what value you are delivering to customers.

As a compulsive learner, what appeals to me about working in pricing is that it gives me the chance to learn deeply about how things work.

As a business leader, the reason you should care about pricing is because it’s the way that you communicate the value of your company to your customers and then deliver that value to your own bottom line.

I can’t think of a more interesting career than continuing to learn about companies and products and help their leaders realize their full value through pricing.