How can we keep on top of reviewing our pricing?

We’re not very good at regularly reviewing on our pricing, how can we keep on top of it?

I have been doing a survey, it’s a small sample and terribly unscientific but the results are unanimous so I feel confident about sharing them. My survey population was the 25 business owners I had most recently spoken to and the single survey question I asked was a simple one: “Do you regularly review your pricing?”

I wasn’t interested in wishy-washy answers so I gave my delightful respondents the choice of answering just ‘yes’ or ‘no’. And guess what, 100% of my small population, when forced to give a one-word answer, said no. Of course, they were itching to say more than ‘no’ and most accompanied the word with an embarrassed giggle, an eye roll and a ‘but…’ But there we have it, enough evidence – for me at least – to conclude that small- and medium-sized businesses are woeful at keeping on top of their pricing.

We all know how important pricing is, so no need to revisit that here, but why then are so many businesses letting it slip off the agenda? The answer I think lies in the fact that no single person is made accountable for it.

Pricing is an issue that crosses finance, marketing and strategy. And because it’s a complicated and challenging topic you rarely find an individual putting up their hand to lead it. By default it becomes a ‘team issue’ and there you have it – if everyone is accountable then no one is.

So my tip this week is that you appoint someone to the prestigious post of “Chief of Pricing” (or COP for short). Of course, if you are the only person in the business this will naturally fall to you, and in many cases it does remain on the list of CEO roles, but not always.

Importantly the role of Chief of Pricing doesn’t mean that that person actually has to do the work around pricing but rather that they ensure that the business keeps pricing top of mind. All this essentially means is that the business regularly has access to, reviews and considers the mountain of data that contributes to pricing decisions.

Regular readers of this column will know that I am an advocate of monthly and quarterly strategy meetings. Pricing should always be on the agenda. That way the Chief of Pricing will always be required to have something to report, thus rendering your business proactive on the pricing front. Best of all, you will outsmart your competitors and forever more be able to answer the question: “Do you regularly review your pricing?” in the affirmative.

To read more Profitable Growth expert advice, click here.

Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses: Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses. Julia is the author of “How to Bake a Business” and was previously a partner at Deloitte. She is a chartered accountant and has a degree in economics from The London School of Economics (London University).