A question from a reader:
Just to introduce myself, I started my career in a cost consultancy startup that was involved in implementing activity based costing and later moved into my new role in pricing and I am realising that I am coming up short in this field and I am constantly seeking new knowledge and training. I am on a process to register a side consultancy to help small to medium companies in my country to understand their “cost to serve” and to advice on their pricing. I realize that I am coming up short on the latter. How would you advice a young professional such as myself on how to go about gaining skills and knowledge in this exciting field, as I aspire to dominate this field in my country many years from now!
Hi J, So far you are on an excellent track. Here are three big things you have going for you: 1. You seem to be a quantitative person (who else would work in cost accounting?). 2. You have set a clear goal – become a pricing expert. 3. You are willing to work, study, and learn to achieve your goals. So few people set goals and even fewer are willing to work toward them. I’m confident you will be successful.
Here are 4 pieces of advice as you launch this new career.
First, forget about costs. Costs don’t drive pricing. Willingness to pay drives pricing. Hopefully you already know this, but coming from a cost accounting background this may be hard to grasp. Please read this blog on how costs matter and learn how to articulate this to other people. This one issue will be your biggest asset in your pricing career.
Second, keep reading and studying. Of course I like my book, Impact Pricing. There are many other books that are excellent in regards to pricing. Early on I probably read the Strategy and Tactics of Pricing 5 times (and I used it as a textbook in a pricing course). I often interview pricing people on a podcast called Pragmatic Live.
Third, get involved with real pricing. Maybe you can find case studies. I’ve done a few podcasts on It’s All In the BRA where we coached companies on how to improve their pricing. Sometimes in my blog I offer pricing advice to specific situations. You will want to create a framework on how you think about pricing so you can use it when coaching or consulting with companies.
Along the lines of getting involved with pricing, see if you can find some pricing data. Start to play with it. See what you can learn from it. How would you recommend the company who has the data to get better? This is all a learning exercise.
Finally, maybe you can find a consulting company who would take you on as an intern or employee. All consulting firms use different tools and frameworks, but learning one well will get you up the learning curve much faster.
I hope that helps and good luck in your endeavor.