When hiring an executive who will determine your cost plan, you want a professional with extremely competitive pricing strategy skills so you know they’ll get the job done at the highest level.
McKinsey estimates that as much as 30% of pricing decisions made by companies don’t deliver the right price, and considering a 1% increase in price leads to an 8.7% boost in profit, that translates to significant revenue loss.
Pricing strategists determine what your company should charge for various services and products. These professionals account for many dynamic factors and decide between multiple pricing strategies based on data, experience, and a particular skill set.
Given the complexity of pricing strategy and how vital it is for your bottom line, it’s critical to hire a professional with the right skills for the job.
What is Pricing Strategy?
Definition: pricing strategy is used to boost sales and profits by determining the most profitable selling point for goods and services.
Pricing strategists account for various factors:
- Variable and input costs
- Account segments
- Market conditions
- Trade margins
- Production and distribution costs
- Consumers’ willingness and ability to pay
Using these, pricing strategists determine the most appropriate selling point for your product. This increases profit margins and allows you to keep a hold of your market share.
Top 5 Highly Competitive Pricing Strategy Skills
Here are the most critical and competitive skills your executive pricing strategist must have, so you can maximize profits and grow your business.
Pricing strategy involves observing data and understanding trends. A candidate with the most competitive pricing strategy skills is analytical by nature and possesses certain analytical qualities.
One of the most critical ways pricing strategists use analysis is when researching competitors. Understanding what does and doesn’t work for competitors helps pricing strategists determine your company’s direction with its pricing, as well as provides a roadmap from a company who has adopted a certain strategy.
Further, an excellent executive strategist understands and is able to capitalize on industry trends, especially because they’ve been in the industry for a while. They use this analysis to inform decisions and test different hypotheses on pricing.
When faced with an issue, pricing strategist executives should be able to think about it analytically, including:
- Gathering information and testing various pricing strategy hypotheses to determine next steps
- Finding pricing solutions and testing them
- Reviewing solutions to determine what did and didn’t work
- Uncovering the best pricing strategy based on testing
Given the many areas in which analytical skills are used in pricing strategy, your new hires should be highly analytical. Don’t be shy to test candidates with analytical questions (examples here) during their interview!
According to Zippia, the top five most common skills for pricing analysts are:
- Customer service (6.7%)
- Financial statements (6.6%)
- Data analysis (6.3%)
- SQL (5.3%)
- Market research (5.0%)
Although you’re hiring an executive, experience with these fundamental skills helps keep that executive in touch with their team. If there’s a problem, this executive can get into the trenches because of their experience with these fundamental skills.
Executive pricing strategists typically have some experience with one or many of these fields, including:
On the flipside, be wary of excluding candidates who don’t come from a purely technical background. Strong candidates have a blend of soft and hard skills.
Understand your priorities and what the day-to-day of pricing strategy at your company looks like from an executive level. Ask yourself which hard skills you’re willing to let the qualified candidate learn on the job and which skills your new hire must come prepared with. This way, you can find candidates whose technical expertise aligns with pricing strategy at your company.
Critical Soft Skills
While hard skills can be taught, soft skills are more innate. Developing a competitive pricing strategy means working cross-functionally across departments at your company, so you’ll want to hire an executive who works well with others and fits your company culture.
Vital soft skills to look out for include:
Communication. As mentioned, pricing strategists work across departments and interact with many people. They need to know how to communicate their ideas clearly and resolve disputes efficiently.
Leadership. Your executive pricing strategist will likely lead a team, either now or in the future. Your new hire should be able to respectfully make decisions with their team to maximize productivity.
Time management. Developing a competitive pricing strategy means juggling input from various departments and constantly taking in different metrics. With all the information they need to disseminate and execute, the best executive-level pricing strategists manage their time well.
Problem-solving. This is particularly critical for pricing strategists, so more on that in the next section.
Problem-Solving Skills Across Departments
Since pricing strategy involves identifying what to do and convincing the rest of the company to get on board with it, pricing strategists need to put complaints to rest across departments regularly.
Identifying problems is one thing, but knowing how to solve them and prevent them from happening again is where the real value is. Look for candidates with proven results in the areas of problem-solving and problem prevention.
While pricing strategists must be analytical and technical, the best ones understand the value behind their work. While the day-to-day may be nitty-gritty, their overarching goal is of tantamount importance: increase revenue by maximizing pricing.
The most successful candidates are passionate about what your company sells and want to see your company succeed. Screen for candidates with highly personal cover letters, excellent interview responses that highlight their interest in your mission, and a genuine passion for pricing strategy at your company.
The Most Competitive Pricing Strategy Skills In A Nutshell
While pricing strategists rely on many skills, some are more critical than others.
At a high level, you want your pricing executive to be:
- A problem-solver
- Technical, but with soft skills such as communication, time management, and leadership
Given the importance of hiring the best pricing strategist and its impact on your bottom line, now isn’t the time for guessing and checking. Jennings Executive uses two decades of experience to help you find the perfect executive pricing strategist. Learn more!