Implementing a new pricing strategy takes work. That’s probably why many distributors avoid the project altogether. Worse, executives might invest big money in a pricing tool only to cut back on (or omit completely) supportive change management initiatives that ensure organizational endorsement. Scott Sinning, CEO of Pricing For Distributors, has parlayed his corporate success into an entrepreneurial career designing custom pricing objectives to help wholesale distributors increase profitability. Jason and Scott met to discuss the philosophy behind creating tailored pricing advice and ensuring staff buy-in.
My goal as an advisor for distributors who want to improve their pricing is to take the practical lessons learned–the bumps, bruises, and everything else that comes with that–
to help others figure out pricing, [get them] to the next level, and have someone in their corner that has been there, done that. As former VP of pricing strategy at Graybar, Scott certainly has experience to spare. He was ins trumental in leading the first major pricing investment plan in the electrical supply giant’s history, and finding solutions to the inevitable interactivity challenges. We had a large sales force who historically had 100% ability to discount price, he recalls. As you move away from that to providing system guidance, there’s a natural resistance.
What Scott learned about managing resistance and promoting company-wide acceptance can be summed up in one word: trust. That’s especially true when the strategy impacts bottom lines on both sides of the sale. It frustrates him when he encounters distributors that short their customer-facing teams by failing to provide considerate roadmaps to boost their success. Pricing For Distributors isn’t a pricing platform. Instead, Scott and his team meet companies where they are in their software implementation plan. Ideally, that’s before the tech is purchased. But consultative support is available at any time in the process. Scott translates analysis of a distributor’s people, processes, technology, and roll-out strategy into an integrative plan for sustainable improvement.
Technology is the easy part because these [software] providers are good at what they do, Scott says. Pricing For Distributors merges platform and people to drive profitable growth. It’s about helping get people on the bus to go along for the ride.
The biggest selling point is that, for distributors, it’s a long-term repeat business so pricing has to be fair, has to be win-win, and it has to engender trust with your customers.
There’s no excuse not to use a tool that now exists to XXXX. No human being can memorize a hundred thousand prices, obviously.
The key for distributors to think about is that dropping in a new technology tool or software package doesn’t solve the problem.
We gotta meet the clients where they stand. But in the best case scenario, it’s doing that assessment that would then lead into a roadmap that shows a timeline and milestones and accountabilities along the way.
I’ve observed that distributors hope to try to skinny-buy on the change management becausewriting the check for the software or the monthly subscription, it’s not an inexpensive investment.
I think sometimes people say, ‘well geez, that costs a lot, we’re out of budget for dedicating resources, or really focusing on change management and doing that sort of work.’ And that’s a mistake.
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Distribution Talk is produced by The Distribution Team, a consulting services firm dedicated to helping wholesale distribution clients remove barriers to profitability, generate wealth and achieve personal goals.
This episode was edited & mixed by The Creative Impostor Studios.
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