Episode 60 Jul 28, 2022

Elevating the Pricing Role with Kevin Mitchell (PPS)

Kevin Mitchell has been a champion of pricing for most of his life. As the president of the Professional Pricing Society (PPS) tells it, “I remember as a child carrying boxes of canary yellow pricing newsletters uphill, both ways, through the snow in Phoenix, Arizona.”

This walk down memory lane set the tone for a lively and enlightening conversation between Kevin and Zilliant CMO Lindsay Duran. Kevin shared the three biggest hot button issues that are keeping PPS members up at night and his insights into today’s macroeconomic landscape. After acknowledging the present challenges – inflation and otherwise – Kevin and Lindsay spent the bulk of the episode on why it’s an exciting time to be in pricing: pricing professionals are more essential than ever to their organizations and, with the right tools and training, they can drive business strategy at the highest levels.

Kevin Mitchell

Kevin Mitchell

In talking with a lot of pricing leaders, people say that they do get some support from their top management, but sometimes their top management sees pricing and revenue management as an ATM - where they just hit a button and all this cash starts flying out. It's our job to let them know that it doesn't work exactly that way. We need tools, we need training, we need to stay current in order to keep the cash flowing.
- Kevin Mitchell, PPS

Episode Transcript

Kevin Mitchell: Everyone knows about the environment. So definitely overcommunicate. When you have price changes, price increases, you can consider versioning or versioning down if you have price sensitive customers that you want to hold onto to give them another opportunity. Inflation in a lot of ways makes old established products and markets and customers kind of a new undiscovered country. It means that a lot of this is brand new. It gives us an opportunity to figure out our value positions.

Lindsay Duran: Welcome to B2B Reimagined. My name is Lindsay Duran, and I'll be your host for this episode. I'm joined today by Kevin Mitchell, president of the Professional Pricing Society, or PPS, as it's known to pricing leaders globally. We've been long time partners of PPS here at Zilliant and are excited to have you on the podcast for the first time.

Kevin Mitchell: Lindsay. Thank you so much. Thanks for the opportunity to talk with you today. Thanks to you and the Zilliant team for your partnership with PPS over the years. And I'm really looking forward to talking again with you. So thank you so much. Absolutely.

Lindsay Duran: Well, Kevin, you are quite prolific on your LinkedIn page and the [00:02:00] Professional Pricing Society group on LinkedIn, as well as your conferences, but can you share with us something that our listeners can't learn from LinkedIn? What's one surprising or interesting fact about yourself?

Kevin Mitchell: Yeah. Thanks for the question, Lindsay. I think one interesting fact about me is though I doubt there are many of us who grew up wanting to be pricing people or wanting to be revenue management professionals or something like that.

Pricing for me has been around a very long time. And I actually worked in pricing as a child. Believe it or not. A lot of people don't know that Professional Pricing Society, my company PPS, is in fact, a family business. It was started by a gentleman named Eric Mitchell, who is my father. And he was a pricing practitioner as far back as the late 1970s.

I'm not even sure of the years. Records are probably pretty sketchy from back then, but a very long time history. And after he became a [00:03:00] consultant around the same time, Ken Rowe and Reed Holden and Tom Nagle and some of the godfathers around pricing science were also being consultants. He started a newsletter in the early eighties and it would've been my summer job when I was in middle school and high school to do copy editing for his newsletter to print it out at the local Kinko's replacement to deliver it. And so believe it or not, I have worked in pricing and around PPS since I was a child and Lindsay, if I recall correctly, I remember my early days of PPS were carrying boxes of canary yellow newsletters, uphill, both ways through the snow in Phoenix, Arizona. That's how I remember it. And there's limited data to contradict me on that one.

So I think that's what it was. So, one thing that I guess would be surprising is that definitely not going to age myself or say how old I am, but I've been around pricing for a long time [00:04:00] since probably I was too young to really be working. But I remember building databases for our first membership campaign and typing in addresses, as we would send out newsletters, which is how PPS started.

And this would've been early 1980s. This would've been quite a while ago. So I have quite a bit of history around PPS and around pricing. And I don't think that there are too many of us that grew up thinking that we were going to be pricing people, but I'm probably pretty darn close in a lot of ways.

Lindsay Duran: Absolutely. Well, you certainly have me beat on the pricing experience in tenure that's for sure. How did you end up becoming the president of PPS Kevin?

Kevin Mitchell: 100% pure nepotism.

Okay. That's not completely true. My background is I'm an Atlanta native. I got bachelor's degrees in economics and English from Duke University. I got an MBA in marketing [00:05:00] from the University of Rochester, which coincidentally enough now actually features a concentration in pricing. That's believe it or not, that's unrelated to my appearance there 30 years ago. And they certainly did not have that back in the stone age when I went there. And as far as my professional experience throughout the 1990s and a lot of the 2000s, I worked in various financial fields, financial management fields, marketing fields for General Electric and Colgate Palmolive, both here in Atlanta, where I am now and also in New York City.

I came back to PPS. Well, we started talking about coming back to PPS and I'm thinking it was around 2004 or 2005. So my father, Eric Mitchell was thinking about perhaps selling the business and perhaps talking about retirement and things like that. And we had a few discussions and he didn't really want to sell.

Our business that he started again, uphill carrying newsletters [00:06:00] through the snow in Phoenix. And in 2004, 2005, he probably wasn't quite ready to retire. And I probably wasn't quite ready to come back because I still had the memory of those early days. And my biceps burning from carrying the newsletters uphill.

But around 2006, 2007, he said, “I really mean it I'm going to retire. I don't want to sell it.” And so I came back to PPS. And he retired shortly after that. And of course over the years, we've had a lot of changes and a lot of things that have been going on through PPS - started doing online training in October of 2001, after September of 2001, when people could no longer travel, didn't really have the bandwidth.

And it really wasn't a thing back then. But we have a long history. And so I would say that I came back to PPS in, I can't remember it was either late 2006 or early 2007, but I've been back almost 16 years now, I guess. And we've seen a lot of changes and a lot of growth and have [00:07:00] had the opportunity to have a lot of great partnerships like with Zilliant and with a lot of others there in order to keep us on the forefront for everything pricing and revenue management.

Lindsay Duran: Great. And I certainly hope that you found someone else to carry the boxes of newsletters.

Kevin Mitchell: Still doing that. on occasion. It's my substitute for going to the gym.

Lindsay Duran: Well, it feels like just yesterday that you and I were chatting at the Zilliant MindShare conference in Austin. I want to continue that conversation today, specifically your view into the highly charged world of modern B2B pricing. What would you say are the top three hot button concerns you're hearing from members?

Kevin Mitchell: Yeah, absolutely. And also, Lindsay, thanks to you and your team for inviting me and my team to join you at MindShare in Austin; had a very good time reconnecting with folks and hanging out with you and your team as well. And it was a very nice event. So thank you for the [00:08:00] opportunity to join you back in Austin.

And to answer your question for three hot button concerns. I would say the first one would have to be that we have an awful lot of macroeconomic uncertainty right now. I believe we were talking about this, but it seems that January and February of 2020, which was the last time that I was in Austin, visiting with you and your team there.

That just seems like that was centuries ago. Now that seems that was so long ago, even though it was only two and a half years ago, but with everything that's been going on for the past couple years, Really, we have a situation now where most of us in North America or Western Europe have not really had to face challenges like we're facing today.

We've got rising inflation, we've got possibilities for stagflation, recession, general unease, global pandemic, a war in Europe. I mean, there's so much going on right now and all this feeds into macroeconomic uncertainty, where we're not really sure what's going to [00:09:00] happen next. And three years ago, we would've had no idea really what was going on now, or at least I wouldn't have.

So the first big, hot button issue, the first big concern is just this macroeconomic, uncertainty that a lot of us can't control. And a lot of us are being pulled and pushed around by this rising tide where we really don't know what's going to happen from a macro perspective. I would say that the second big hot button issue would be in addition to all that's going on from a macroeconomic perspective, really there's a lot of general disruption with the ways that people are doing business.

Now this could include things like supply chain shortages that we're all experiencing. It could include things like omnichannel sales approaches, where a lot of people are changing the way that they deliver their products and services to the market. This could be new entries into established marketplaces.

It could be [00:10:00] low cost competition from overseas, and there are really a lot of things going on from a business perspective now, and it seems that changes are accelerating and there's a lot more pressure on businesses to keep up, to stay current, to be flexible. And I'm thinking of the often misquoted Charles Darwin quote, where a lot of people think he said, “It’s the strong who survive.”

But really it's the most willing to change and the most adaptive and the most flexible that often are the folks that survive. And I think we're seeing a lot of that now just with disruption across the business world as well.

Lindsay Duran: Kevin, I think you make a really good point about being able to adapt and change and, not trying to do things the way that you've always done it to meet the moment and figure out what's needed in this new era, because it certainly is unprecedented.

Kevin Mitchell: Absolutely. And this is requiring new tools such as those [00:11:00] offered by Zilliant - it's requiring change management, soft skills, hard analytical skills, all of the above. So yeah that's a big one and just things are changing so quickly now. And I think as another hot button topic and kind of a parallel way of thinking along those lines is that a lot of organizations don't really have the infrastructure built in to deal with all of these changes.

We've had the Great Resignation where a lot of people have lost a lot of business acumen. People are moving around. People that used to do this and used to be very good, may have moved on up or around to another place. And I know that in talking with a lot of pricing leaders, I remember hearing discussions that people saying that they do get some support from their top management, but sometimes their top management sees pricing and revenue management as an ATM.

Where they just hit a button and all of a sudden, all this cash starts flying out, but [00:12:00] it's our job to realize, and to let them know that it doesn't work exactly that way. We need tools. We need training. We need to stay current on everything that's going on in order to keep the cash flowing there.

Lindsay Duran: Absolutely. Well, you mentioned inflation. We've certainly covered this topic on the podcast quite a bit, as it's been top of mind for every company we speak with and all of our customers for about a year. Now, what advice can you lend on pricing successfully through an inflationary environment?

Kevin Mitchell: Yeah, Lindsay, that's a big one and a tough one there. Inflation changes a lot of things. And one thing is that in a lot of large organizations, again, in North America, Western Europe, we haven't faced this for decades. But if you have colleagues who are from Latin America, certain places in Asia or Africa, for them, it's been commonplace. And so certainly I would rely on expertise within your organization.

If [00:13:00] you have it from people from geographies who have had to deal with it before. But I would say the first thing that we have to do when talking about inflation is, do not panic. Panic isn't going to help anyone there, your customers, your partners, your marketplace, everyone is aware that we are in an increasingly inflationary environment.

So keep the focus on your value delivered, definitely keep into account your costs, your positions, your competitor's positions, what your competition is doing, game theory, what your customers want. So again, you have to use your analysis, use your data, use your expertise, use game theory and all the tools that you have in order to determine your best next steps when dealing with inflation. Also, I would recommend overcommunicating, not only internally and externally, but up, down and sideways as well regarding your decisions. Let the marketplace know, let your partners know, [00:14:00] let your customers know your plans. If you have to justify price increases where necessary then certainly do that.

We're not really in a position where we should hide it. Everyone knows about the environment. So definitely overcommunicate. When you have price changes, price increases, you can consider versioning or versioning down. If you have price sensitive customers that you want to hold onto to give them another opportunity, but really inflation in a lot of ways makes old established products and markets and customers in a lot of ways, it makes them a new undiscovered country. It means that a lot of this is brand new. It gives us an opportunity to reconnect with everyone to figure out our value positions, figure out what we can provide to our marketplace, to our customers.

And again, to have discussions with people to communicate our needs, our goals, what we have to do. Again, a price war or something like that is not going to benefit anyone in the long run. So first [00:15:00] thing is do not panic. Get the tools you need. Get the training you need. Communicate. Think about your value positions, think about your company's goals, what your company offers to the marketplace and really focus on the task at hand.

Lindsay Duran: I think you bring up a really good point and the challenges present some opportunities. And one thing that strikes me about the times that we're living in is that the importance of pricing and the role of pricing in an organization has really been elevated as a way to more effectively deal with all of the changes that we're seeing from a digital commerce perspective, from an inflation perspective, from a supply chain challenge perspective, what excites you about chances companies currently have for price improvement or the elevation of the pricing role inside B2B companies that's happening right now?

Kevin Mitchell: Yeah, that's a good question. I think it's exciting that we are getting good attention from Wall Street analysts, and [00:16:00] European and Latin American and Asian stock markets as well.

And we're getting tasked by our senior management in order to do our jobs better and to provide for our companies. And I think one of the opportunities really kind of comes from that as well. We're getting the attention, people know the importance of pricing. We hopefully are getting the resources that we need, be they systems, tools, individuals training, and so on and so forth in order to do our jobs better. And also there is an opportunity with, let's say, supply chain shortages and with inflation. In a lot of ways, those give us opportunities to focus on our customers that we most want to deal with. And by that, what I mean is that we all have high maintenance, high cost to serve, relatively lower margin products, services, business units, customers, geographies, or whatever have you, and really [00:17:00] the opportunities we have now with inflation, with supply chain shortages and things like that. And with uncertainty is they allow us to really focus on the areas that we want to focus. If you have supply chain shortages and you cannot deliver a hundred percent of your 2019 products to a hundred percent of your customers at all the time, this gives you an opportunity to do some pairing and basically to cut out some of the, let's say, less successful customers that we've dealt with previously, it gives us an opportunity to really focus on our best partners, on our high margin partners, on our business partners and the people who work with us in order to keep providing for them and keep offering our goods and services for them. And really right now with everything that's going on, the old economic adage, there is certainly no such thing as a free lunch right now.

If someone has been floating by with you and has been [00:18:00] your highest cost to serve customer, your highest maintenance customer, but your lowest margin customer. Well, you've got an opportunity now to tell them that things are changing and with inflation, we can no longer do business as we've had. And we have an opportunity here to continue working, but there are going to have to be some changes, be that with price increases, be that with differences in products, be that with terms and conditions or what have you there.

So really all of these things can be an opportunity for us to focus on the types of business that we like to do more. And maybe give us an opportunity to let's say, give a nice polite haircut or to do some sharing or to do some pairing with some of our less profitable lines or customers or areas where it's higher cost to serve.

Lindsay Duran: I think that's a smart way to look at it. Kevin, how does PPS help its members realize these kinds of opportunities?

Kevin Mitchell: Oh, yeah. Well, we have a lot of ways that we try to [00:19:00] connect with pricing and revenue management people worldwide. First of all, not to joke and belabor the point, but our publications have been around for 40 years.

I know this firsthand, of course, and we have lots of goods and services for people who want to take advantage of the opportunities in pricing and revenue management. Now we're lucky that in our decades of doing business, we've built relationships with subject matter experts, with thought leaders, with leading academics, with senior pricing and revenue management practitioners who have walked the walk with software companies through our partnerships with Zilliant and through consultants, the big four accounting firms, anyone who has a pricing center of excellence, basically anyone who is expert in and around this field in our 40 plus years of doing business, we've had the opportunity of building relationships with them.

We offer over 50 online pricing courses available anywhere and everywhere for you and your team. Options from core [00:20:00] pricing skills, all the way up to advanced analytical methods where you can train and learn and become experts. PPS has done conferences across the globe. We do conferences every non pandemic year, at least a couple times in North America and Europe. We've also done conferences in Latin America and Asia Pacific as well. So basically what we offer is this huge worldwide connected network where you can learn, where you can train, where you can hear the latest and greatest, where you can get strategies and tactics and tools, and also where you can get a psychological group hug from people who know what you do, who have walked the walk.

As you have people who understand that pricing is a tough, very important, sometimes underappreciated job. And basically we aim to be a one stop shop where you can get the acumen and the training and the education you need in order to do your job better. Not only for yourself and for your career but also for your company [00:21:00] goals and for ways that you can continue to exceed expectations there.

So we just aim to be for, by and about pricing people all the time. That's what our job as the organization for pricing and revenue management professionals is. And basically we have a lot of ways that we do that electronically through our publications, through our in-person events, through networking events, through social media and a lot of partnerships, obviously Lindsay, through organizations like Zilliant and also with others who have expertise in this part of the business world.

Lindsay Duran: Excellent. Kevin, thank you for that overview. I'm sure that our listeners who may not be familiar with PPS will find a lot of value in the resources that you offer. And thank you for mentioning pricing software. On that note, we've certainly seen a steady uptick in demand for pricing software. As the pricing role becomes more complex and is underserved by the manual tools and processes that companies have relied on for years.

What have you [00:22:00] observed as far as pricing software adoption and why do you think it's important?

Kevin Mitchell: Yeah, good question. There certainly is an increase in interest in pricing software adoption. And I can think of a few reasons why that's very important. First of all, Lindsay, as PPS does a big survey where we talk to pricing professionals across the globe.

About their pressure points, about what they want, about how they could do their jobs better, about their job satisfaction and lots of other demographic and psychographic questions. Qualitative and quantitative basically is an overview of people in this part of the business world. And I can confirm that pricing practitioners who use software, who use pricing software, feel that they are more satisfied in their jobs and feel that they are more effective in their jobs as well. So one reason that it's important to consider pricing software adoption is that as a tool, it can make [00:23:00] your team members more effective, more efficient by allowing them to concentrate on the things that matter most to them.

And by automating a lot of the processes that otherwise would really bog them down. And Lindsay, as and we've had this discussion before, unfortunately the biggest pricing tool in the world is the gut reaction of the loudest voice in the room. And the second biggest pricing tool in the world is probably Microsoft Excel.

I would say. And neither of those are optimal. If you have a lot of the challenges that we've been talking about today, the things with disruption, the things with macroeconomic, uncertainty, the things with kinks in your supply chain, the thing with raw good material prices being all over the board, really, you need to take advantage of every tool that you can in order to help battle all of these challenges.

And pricing is a tough job. It is an important job, but yes, for organizations of any size, I [00:24:00] think we're seeing an uptick in pricing adoption, just because we are realizing that you need to use the tools that are available to you in order to perform better. And in order to give your people, basically your team members, basically to give them every opportunity to succeed.

And often that is not done via Excel. That's not done via the gut reaction of the loudest person or the top manager in the room. And basically you don't want to be the guy that's using a typewriter in a fax machine, in a new digital world. You want to take advantage of everything that you can to capitalize on the data that your organization has, the acumen that your organization has built.

The value that your organization has worked so hard to provide. And really, I think the uptick in interest around pricing software and pricing software adoption is just because we are realizing pricing is important. Use the best tools that you can, [00:25:00] get the expertise that you can and do the best that you can with everything that's available to you, the data that's out there, the trends are out there, the training that's out there, but make sure to take advantage of every opportunity that you have in order to succeed.

Lindsay Duran: I think the fax machine analogy is such an on point example in comparison because certainly companies that are operating in spreadsheets and that kind of manual gut feel process are not meeting the moment of the digital era. Kevin, would you even go as far to say that some form of pricing automation or price management or price optimization software is table stakes for companies of a certain size?

Kevin Mitchell: Yes, I would, if you're a medium-large, or large organization, then yes, there is really no reason not to use everything that's available to you. And I would say that pricing software, I think of [00:26:00] it as an investment instead of a pure cost for an organization of any measurable size there. I think it's a case where it is an opportunity to do things even better. And it also is an investment that can certainly repay itself very quickly. I believe for organizations of medium sized or larger for really organizations like that in order to take best advantage of the opportunities that are out there. I do think that pricing software would really be something that, if it's not certainly mandatory, then it's really pretty darn close and it probably should be mandatory for a lot of organizations.

Lindsay Duran: Definitely. Just before MindShare you held the annual PPS spring conference in Chicago, which we were pleased to sponsor and contribute content to. And certainly very happy to see that was back as an in person event. The theme was pricing strategy [00:27:00] connected, and it struck us as timely that speakers focused on the importance of investing in both people and technology.

And as digital transformation is critical to creating the dynamic B2C-like experience for customers, but deepening the partnership between pricing and sales is also a must to overcome market volatility and drive price adoption in the field. Did you also get those takeaways? And what else did you learn from here?

Kevin Mitchell: Yeah, that was a very important group of takeaways there. And I agree with you. It was so great to be back in person with everyone, not only at the PPS spring conference in Chicago, but for me, as well at MindShare over there in Austin and other opportunities coming up as well. And there were a lot of themes around our event.

You mentioned quite a few of them there. Also, I remember there was a lot of emphasis on change management, which of course is very important. These days on analytics. Everyone has a lot of data and [00:28:00] everyone has lots of ways that they can capitalize on that data. And hopefully is optimizing and using that data to its full extent.

I think that communication of course is very important. We talked a little bit about this when we were talking about inflation as well, but this is communication inside your department. This is communication with other departments. This is communication with your customers. This is using the hard skills, the analytical skills, but also the soft skills, the more human side of skills.

And also we had a lot of emphasis on tools, techniques, and strategies, and really kind of the latest and greatest that is out there. And so, yeah, I had a great time at our event and our events always seemed to fly by, for me. It seems that as soon as the plane lands, we're almost halfway done and then it's over before we know it.

So it was great to be back out there in person and Lindsay some of the other things that you mentioned is in a lot of ways, there is kind of a blurring between [00:29:00] B2C and B2B in a lot of ways. Since individuals now can act like companies and access a lot of data. And basically make decisions before they even make a phone call, send an email, check a website and so on and so forth there, but also businesses have a lot of more ways that they can buy and sell as well.

Talking about omnichannel approaches, different sales approaches, and so on and so forth there. And hey, if you are a good revenue management professional, if you're a good pricing professional, you need to be as close to the center of decision making and as close to the center of your organization as possible.

So we did have a lot of information about not only the systems and the tools, but also the people skills necessary in order to talk with everyone on their own level, in order to how you build partnerships, not only with sales, but also product development, marketing, finance, senior management, operations, supply chain.

Pricing ideally should connect to all of these [00:30:00] things and we cannot afford to be siloed. So yeah, we had quite a few themes at our spring conference, as you did in MindShare as well. And really it's great to just get out there. Reconnect with everybody in person, lots of things going on around the event.

Lots of get togethers during and after the event as well. So I think it was a great couple meetings, both with yours and ours in order to reconnect there and to talk about a lot of things that are very important with everything that's going on right now.

Lindsay Duran: Well, I know I'm very much looking forward to attending PPS in the fall in October in San Francisco, we'll look forward to hearing the great insights there, including from some members of the Zilliant team who will be on stage. Before we leave today, I'd like to give you the floor. Do you have any additional advice or predictions for pricing professionals that you'd like to share?

Kevin Mitchell: Yeah, thank you so much, Lindsay. I believe [00:31:00] that pricing professionals are going to continue to see an increased emphasis on their jobs and on their duties and on the goals that they have to achieve.

And I think that we have an opportunity now to provide even more for our organizations. And really right now, I think is a great time again, to make sure that the pricing team and your organization takes advantage of everything that's out there for them. We're in the midst of a golden age for pricing books.

It seems that they're great pricing books that come out all the time. We're back to in person conferences. Zilliant and software companies have a lot of new offerings for you. And a lot of things that are available from a cloud perspective, things that can help your sales team be more effective, things that can help with your analytics, help you take advantage of the data that already resides within [00:32:00] your organization.

So as far as predictions again, I would say there may be a likelihood that we will see even more emphasis placed on pricing and revenue management professionals. I would remind us, this is not the time to panic. This is the time to remember the value that our company provides to our marketplace. This is the time to get the training that you need.

This is the time to get the tools, including pricing software that you and your organization need. In spite of all the challenges in spite of all the uncertainty and everything that's going on. Pricing acumen and thought, and common business sense will be falling into a price war and will be panicking all day.

So remember your company, remember your goals. Remember to not panic, remember to take advantage of everything that you can as far as systems and tools and networking and other people and expertise. And really this is a great opportunity to really exceed [00:33:00] expectations in a lot of organizations. And again, Lindsay, thank you so much for the opportunity to talk with you today.

Thanks to you and the Zilliant team for your long time partnership. I'm looking forward to seeing you again very soon, seeing you and the team very soon. And thank you so much. I appreciate it.

Lindsay Duran: Well, Kevin, thanks so much for being here and sharing your insights with us. And I'd like to thank each of our podcast listeners for joining us as well.

Be sure to check out the link in the show notes to Zilliant’s four main takeaways from the PPS spring conference, you can also find more information about the PPS fall event in San Francisco, by following that link. We're committed to your success. If you'd like to discuss how zilliant may be able to help your business, please reach out to us at Zilliant.com.

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