Systems in the Strategic Choice Cascade - Tools and applications used to across the value cycle
Karen Chiang is a Managing Partner at Ibbaka. See her Skill Profile on Ibbaka Talent.
The final choice in the strategic choice cascade for pricing is “Systems.” These are the systems used to support the capabilities and to execute on the Where to Play strategy and How to Win tactics. We are increasingly dependent on these systems around the value cycle.
What we mean by “Systems”
Examples of systems that inform our strategic choice cascade on pricing
In just a couple of weeks, we will be covering this topic during our #PPSVirtual21 workshop to help senior level executives make the choiceful decisions that will bring their team to alignment as they shape their organization’s pricing strategy.
What we mean by systems
Systems will allow you to accelerate and gain efficiency as you execute on your pricing strategy and implement your pricing model. We rely on systems to standardize our processes, collect and analyse data and to get insights we could not get without their support. Systems consist of processes, tools, applications and platforms. These systems can touch different aspects of your business: from sales and marketing, to implementation and customer success, to talent management and finance.
Example systems for pricing
Let’s highlight some of the systems in the context of the strategic choice cascade. I will also focus on system we at Ibbaka use as we deliver in our Ibbaka Market engagements.
Winning Aspirations
We can think of this strategic choice cascade for pricing as a system that we use to build alignment around our key decisions and choices that will shape our strategy and its execution. The strategic choice cascade enables for a systematic way to stimulate conversation, gather our ideas, and to justify our decisions. Another system used for winning aspirations is scenario planning. Ibbaka uses both of these approaches to help our customers frame and align on their goals.
Where to Play
In our post on Where to Play, we covered a number of approaches to tackle this choice. One of the key considerations is to define our prioritized market segments. The tools that we employ to get to the definition of our prioritize segments is to look at the mix of our existing customers. In our CRM, we want to be able to find patterns in the way that our existing customers are choosing to transact. We also want to understand the various roles our customers’ decision making unit play in purchasing.
In our segmentation work, we use tools such as surveys and interviews to learn about the value drivers our market cares about. At Ibbaka, we have a proprietary data analysis platform to identify patterns and clusters in data. This helps us find groups of people who find value in the same way, which is our definition of a market segment.
How to Win
Value and pricing models, value propositions and how they fit together are the key decisions that we need to consider in How to Win. The delivery of our value comes in the form of the portfolio of offers that our customers use. At the heart of How to Win is Price. Pricing is where all things come together. To determine price, we use tools like conjoint analysis to understand willingness to pay.
When it comes to enabling sales, one of the key tools our customers use is our Value Pricing Dashboard. Our value pricing dashboard helps reduce friction in communicating value and setting prices by mapping value promises. The Value Pricing Dashboard also allows for consistent value messaging and price quoting.
Capabilities
In addition to enabling growth through the market lens, Ibbaka helps organizations understand how they can grow their talent to meet the needs of the business goals. When we look at Capabilities, we want to have a clear view of the skills and competencies we need to execute. Do we have the right skills needed to create, communicate, deliver and document value and price across the customer journey? How can we best support our customers' knowledge to take advantage of our solutions?
One of the ways to represent our skills is through the use of skill profiles and have these mapped to a competency model. Below is a part of Ibbaka’s Open Competency Model for Pricing.
Data Within
Many firms are looking to embrace data to improve business performance, better serve customers and to enable growth. These are the same as the goals for pricing. As you can see from the examples presented, draw out data from all of our systems. Our systems make use of data and we need to consider the flow and use of that data. We need to take into account how we:
Manage data
Interpret data
Derive and share insight
Apply the knowledge that obtained
Manage data rights, privacy and security
We leverage data to make informed decisions and see the outcomes of our choices.
As you design the systems that support your pricing strategy, take a holistic approach to the systems you will need to enable success.
Read other posts in the Strategic Choice Cascade for Pricing series
Winning Aspirations - What pricing goals are we trying to achieve
Where to Play - Making Pricing Choices to Define your Market
Systems in the Strategic Choice Cascade - Tools and applications used to across the value cycle