Whether you are creating, growing or just managing a pricing department, there are several things to consider to make it successful. Below some items from our own experiences when working with pricing teams and observing which ones seem to do better.

1. Executive support: with support and understanding from top management that pricing is not only important but also a strategic differentiator, many pricing teams are working in vain. You need sponsorship and support from the C-suite.
2. People: as with most things in business, good people make a difference. So recruiting the right people is naturally key. But also important in larger organizations is that people see the pricing team as a good career step: in other words, where do people go after the pricing team? If working in pricing is seen as a good step to learn sales/marketing/finance with good career prospects then so much the better.
3. Structure: One of the key things when designing the pricing department is where you put responsibilities:
   • Global: responsibilities for prices are places with a global team who need to be asked whenever local prices need changing.
   • Local: most pricing responsibility is with the local teams
   • Hybrid: some pricing responsibilities are global, such as setting global pricing guidelines/floor prices/target prices, as well as making pricing trainings and value argumentation. Other responsibilities, typically around discounting and rebate agreements are placed locally, though often restrictions from the global pricing guidelines.
4. Training: closely related to the people aspect: make sure to train the team on techniques, pricing strategy etc, but very importantly also how to communicate and train other people (their colleagues in various departments) in how to do value pricing.
5. Organizational empowerment and influence: Without the power and organizational ability to change or approve pricing matters impacting other departments, the pricing team very often just becomes a business intelligence department, and while analytics are important, it is not what moves the profit needle when it comes to pricing. Succesful pricing organizations are consulted or even have veto powers over some pricing KPIs (so they become needed by Sales & Marketing) and are part of setting overall revenue and business strategy, such as what revenue streams to pursue, what kind of pricing position to take, how to fix brand health issues etc.
6. Tools: the most successful teams have a plethora of tools at their disposal from pricing software to collaboration tools, analytical tools, training tools and more.

 At RevBeam we help companies build and improve their pricing and one aspect is how the pricing teams are structured and developed. Contact usto learn more.