Episode 84 May 30, 2024

How to Shop for a Pricing Solution

“Behind the term ‘pricing tool’ or ‘pricing software’ you can actually have very different things in mind. A competition monitoring tool, a margin improvement tool, an AI price optimization tool, a sales interface. So the first thing was, can we categorize the use cases that people have in mind behind ‘pricing software’?”

Malik Rajan is the founder of The Pricing Club. His mission is to foster a dynamic community of pricing professionals helping each other grow through best practices and thought leadership. As such, his team recently released its first ever Guide to Pricing Software.

Hear the fascinating story of how the Pricing Club came to be and the most pressing trends, topics, challenges and opportunities that are top of mind for pricing professionals, from Malik’s unique vantage point.

Download the Guide to Pricing Software

Featuring
Malik Rajan

Malik Rajan

Episode Transcript

Malik Rajan: Of course, it's important to have something that matches the specificities of the business. But what they tend to neglect is the ergonomy of the software. How easy is it to use actually? Sometimes it's better to sacrifice some of the complexity and to select something that is easier to understand and thus easier to adopt for salespeople.

Where people are failing in getting the dollar value is the implementation. And if you want to get a good implementation, it's better to start simple.

Barrett Thompson: Hello everyone. My name is Barrett Thompson. I'm the vice president of customer and industry relations at Zilliont, and I'll be your host for our podcast. I'm joined today by Malik Rajan, founder of The Pricing Club.

Malik, welcome to B2B Reimagined. Hi Barrett, thank you for having me. Malik, before we dive into how we're making a better world for pricing and pricers, I wonder if you would share something that others find interesting or even surprising once they get to know you. 

Malik Rajan: Well, let me try something. One thing that I can share and that is part of my everyday life is my passion for running.

With over 30 marathons over the past 20 years and many ultra trails in the Alps. This probably tells you about my personality. I know it sounds impressive, but that's not the juicy part. I [00:02:00] think there's probably one bit that you will find more interesting. And that is that about 15 years ago, I broke a world record. It was the world record of the fastest half marathon dressed as a fast food item. 

Barrett Thompson: Oh my goodness. So you're in the record book, right?

Malik Rajan: Yeah. I used to be actually, I think the record has been broken since, but at some point I actually was, and it's definitely something I would not put on my LinkedIn profile and tell people that I, it's not the first thing I tell people when I meet them, so, yeah, there you go. 

Barrett Thompson: Well,  all right. Thank you for sharing that with us.

That's very unique. And, and I can tell also, you know, by this running background, you're one who sets goals and works consistently to achieve great outcomes, right? It doesn't happen overnight. You can't hurry up and train in a week to get it accomplished. You have to be consistent and applied. So I respect that so much.

Malik Rajan: Exactly. It takes a lot of efforts to have a fast hot dog. 

Barrett Thompson: Yes. [00:03:00] The fastest hot dog in the world. Okay. Well. Malik, let's talk about something else that you're so well known for. And that's the Pricing Club. And in fact, maybe we go back to a little bit more of your origin story. What is your professional background and how did that lead you to decide to launch the Pricing Club?

Malik Rajan: So I started my career at Oliver Wyman in strategy consulting, working on various topics. Very quickly, pricing became one of the topics I tackled in various industries. I worked on pricing in retail, in industry, in media, B2B distribution. And this is where I realized that the topic was a goldmine of practices.

It could be very different from one industry to another. And that led me to join Rexel, so the world leader in electrical distribution B2B, and start the pricing division there at the corporate level. [00:04:00] And I did that for about seven years, launching projects, supervising projects in about 20 countries.

Barrett Thompson: I'm sure you've picked up a lot along the way.

And as you mentioned, so much variety across businesses, maybe too much, you know, that might be something to reflect on. Is it the kind of variation that has purpose and adds advantage, or maybe it's just noise and confusion. So we might get into this as we go. Well, let's talk about the Pricing Club, when and how did you decide to create it?

And what are your, what's the stated goal of the Pricing Club? 

Malik Rajan: So actually it's, it's happened when I was at Rexel and it's related to a personal need I had at the time. So when I was at Rexel, I was invited to speak and to chair some events around pricing in various countries in Europe. But I quickly realized that one.

There was nothing in France, so there was a place to take there. There was no sense of community. I had to make the [00:05:00] effort of keeping contact with the people I met in various countries and organizing a large breakfast in Paris so that we could keep being updated on each other's project. And three, most of these conferences were organized by conference organizers and not pricing professionals, which means that the emphasis was on really push on having a maximum number of people in the room rather than maximizing the impact of learnings people could get out of these conferences.

So that led me to, to start the Pricing Club and we also bring these three needs. So an important element in our DNA is people meeting people and having continuity and, uh, following them through their career. You know, that pricing has a tendency to retain people. People are very loyal to pricing. And the best job after being a pricing manager is to be a pricing director of course.

And yeah, and the [00:06:00] second thing, which is important in our DNA is making sure that through the presentations that we deliver in our conferences. People really can really extract practical learnings and try new things in their companies. 

Barrett Thompson: Well, Malik, I too have seen exactly the essence of what you're saying that for most pricing people, a couple of things, one, they might not have started out in their career saying, I want to be a pricer, they sort of fell into it.

Maybe accidentally got introduced, saw something there that was attractive and have got in and stayed. Often they find that they're operating. Alone or with one or two people inside their own company. And it's great to have a friend, but what's your viewpoint of the pricing landscape? It's really hard to see that when you're spending 40, 50, 60 hours every week focused on just one company, just the way those prices are happening.

And when pricing people get together [00:07:00] and they trade information and they trade approaches and they talk about common challenges and how they've overcome them, something really powerful happens. And so in your description of the Pricing Club, I see that, I see the, all of the elements of that coming together to share and reinforce each other, put those practices together.

How large is the Pricing Club and what kind of things have you done recently? 

Malik Rajan: So today, we tend to the needs of over 7, 000 pricing practitioners across Europe, 2, 500 being in France. And the rest being really mirroring the population of, of countries in, in Europe. So the UK is very well represented.

Germany, Spain, Italy, and, and after that, in really people all over, uh, Europe. What we do for them today is one, as I mentioned, conferences, networking on top of bringing them content and best practices through these conferences. We also try to bring joy in French [00:08:00] when translated by wine. So we end our conferences with.

Why Interesting. Acknowledges, which presents nice wines. 

Barrett Thompson: Absolutely. That's an attendance driver, I'm sure. Come on, Malik. You know, it is. That's classy. 

Malik Rajan: Yes. So, and, and it enables us to continue the conversation in a very transparent and formal way after the, the formal sessions. So that, that's the first thing we do.

The second thing we do is recruitment. We have a brand called Top Line Talent, which is now something. Relying on the club itself, but now with a dedicated team. So the idea is to help companies, high pod members, recruits, pricing, your analysts, managers, directors, consultants as well. And the third activity is consulting.

We don't do that directly, but we have an affiliated group of about 20. Uh, consultants, which can handle a project when it can be handled by an expert or by a small setup and, uh, when [00:09:00] projects are international and larger, then we pass the ball to our partners, which can be large consulting companies.

Barrett Thompson: That really is a multifaceted operation. I can see how that's making a huge impact, you know, for pricers and for the companies in which they're working. Thank you for sharing that. Well, let me ask then, you know, your perspective. You've been in the role, you know, what pricing is about, and then you've been, you've established and been running this very successful Pricing Club for such a long time.

When you consider all that you hear from members, what are the concerns they have? What are their companies trying to accomplish? Would you share with us major issues or challenges that you believe are on the minds of the pricing team today? 

Malik Rajan: I would say that of course, lately there is the question of inflation.

It has been a concern for all pricing practitioners, has been concerned by [00:10:00] inflation. Yes. But in a way it has also been beneficial to the pricing community as many mid sized companies, which had never taken interest in pricing before, decided to do something about it. So we've had a lot of new queries from these companies.

Which first wanted to, uh, give some advice where to start, then consulting project, and then of course hiring a real pricing team. 

Barrett Thompson: Yeah, I, I hear that. I think many businesses, it exposed their weaknesses. The last several years exposed weaknesses in their pricing practice and how often they pay attention to certain kinds of price administration or update to think strategically about what is the role of price because the status quo was not allowing them just to cruise, just to be on autopilot anymore.

You know, they had to be very thoughtful and strategic around price. So it was disruptive and painful. But I hope beneficial in the way that it's alerted people [00:11:00] to the, not only the importance of, but the possibilities of getting price right. You know, it, it means a lot. 

Malik Rajan: Absolutely. And I think along the way they decided to try pricing for the margin impact that they were targeting.

And they realized that it was just much more than that. And that, that they could push work on revenue generation, on targeting new customer segments. reviewing their packages and probably having something new on their catalog. I mean, things that they could not have imagined before. So that's the first concern.

The second one we have to talk about that. Of course, it's AI. In the past 12 months, AI has been a huge, a huge concern, probably in two ways. One, an existential worry about the future of the pricing function. You know, context where Gen AI is covering more areas in the workspace every quarter. I actually felt that this concern was very strong a few months ago, you [00:12:00] know, when Gen AI was buzzing so much, now we get to be a bit more used to that.

Now it has become more of a distanced threat that is still there, but somewhere at the back of their minds. 

Barrett Thompson: And Malik, do you mean a, a concern that the person in a pricing role could be replaced by AI? Is this at the heart of the concern? 

Malik Rajan: Yes. This has been quite a, a big question in the past month. And I mean, for me, if you, if you look at other professions or other innovations across time, you will see that it's probably a way of working differently, accountants felt threatened by software doing accounting for you about 20 years ago. And I actually realized that the software were doing accounting with you, not for you. So it's really a tool to do things better, to gain time. And these people are still there thriving. I'm sure that in a pilot will always [00:13:00] be needed in the driver's seat. So I'm not, I mean, this is my personal belief, but I'm not concerned.

On the contrary, and it's also linked to my personality. I'm quite enthusiastic about possibilities that AI is opening for us. 

Barrett Thompson: Yeah, right. I too have considered it more a case of getting power tools, you know, bringing more powerful tools, but we still expect and require skilled operator, understands the strategy of the business, thinks about other implications, you know, pricing doesn't live in a vacuum, it has to be coordinated with how are you positioning the company, what's happening in the market.

Place, what are the objectives for the PNL short term and long term? So many things to think about and things that are not static, you know, they're moving. And so thank you for sharing that there has been a concern. I I've maybe heard more of the excitement around how can I use AI to find better insights or give me a better experience in using my pricing tools.

I [00:14:00] hadn't yet run into a fear that maybe the tools replace the pricing professional in some degree. I hope they relieve us of tedious work. But, uh, certainly not replace us, but thanks for sharing. I can see that there might be some legitimacy to the concern at the beginning, but we'll see how it plays out.

Like you, I'm optimistic. 

Malik Rajan: Absolutely. And I think regarding the second point that you mentioned, the opportunities that AI will open for us, it is also a source of concern for many pricing practitioners who are looking for practical ways to use AI in what they do. They feel that, I mean, some of them, many of them feel like they are missing out or may be missing out very soon on something big that is starting to happen now.

It's buzzing a lot. They have pressure. They see other departments, customer service, for instance, using GenAI a lot. I mean, things are changing around them. And yeah, and we have lots of questions coming to us saying, well, is it theoretical or can we do something? How would we use it completely? [00:15:00]

Barrett Thompson: Thank you for sharing those perspectives on the state of B2B pricing and the mindset, you know, of B2B pricers.

Let me pivot and talk now about the pricing software guide, which you recently published and Zilliant was honored to be included in the guide. I'd love to know more about why you decided to create the pricing software guide and who is it designed for? How would it be used, you know, inside of a B2B organization?

Malik Rajan: Yes. The pricing software guide was actually, uh, something that our members asked us to create, to produce a few years ago. And so it was on our list. It has been on our list for some time and we decided to finally go for it. It was a huge amount of work. And the genesis is really that behind the term pricing software, there's You can actually have very [00:16:00] different things in mind.

You can think of a, a competition monitoring tool, a margin improvements, price optimization tool, sales interface. It can be very different things. So the first thing was, can we categorize the use cases that people have in mind behind a pricing software? You add to that the fact that each vendor uses different terms to describe the use cases.

People are starting to get lost. And the third layer is industries. All vendors will not cover all industries. And with that axis on top, it's very difficult for our members to understand which vendor will answer their need in their industry. So we decided to harmonize everything and have a set list of industries, a set list of use cases.

Work with every vendor to really understand what they do and put them on our grid, on our evaluation [00:17:00] with the same criteria so that people would not get lost. They would get a really one view of all the vendors. And so our objective was really to bring clarity on the blurry market. And I would say the, the end game is.

One for practitioners to understand very quickly who they should put on their shortlist, because of course we could not put all the vendors in the world in our guide. We made a selection of, of the one, the ones we considered being at the best there per use case and per industry. And two, even for vendors or for consultants, it has a lot of value.

Of course, vendors can understand how they position against their competitors. And consultants can better advise their clients on which vendor to select. So in terms of users, the guide addresses, as I said, pricing practitioners, vendors, consultants, but also salespeople, marketing people, and some of the C levels who are also users of some of these products.

Barrett Thompson: This is really helpful, [00:18:00] Malik. I've had empathy for B2B companies that are in the market shopping for pricing solutions, and they often come to 10 vendors or more with their RFP. You know, and they get answers back. And to the point you said, everyone's using different language. The use cases are different.

The industries are different. And what I imagine is some poor group of people down inside the business that's shopping are trying to pull it all together. They're trying to get a common lens so they can understand how are these companies the same? How are they different? Which one's a fit for me? And I feel like it's a struggle.

I feel like it's a lot of work. Companies are maybe in some ways recreating the work that you've done, but with maybe even less experience and skill to do so. If I may say, you've had a chance to look at all the vendors. You started with a framework and then went out. So I think it's hugely valuable. I wonder as a [00:19:00] result of speaking with all of the vendors and looking at the pricing software very closely, were there some insights that you discovered while looking across the landscape, analyzing data that went into the guide, did something pop out to you that maybe you weren't expecting or that you think It's really important for our listeners to understand about the pricing software landscape today.

Malik Rajan: Yes, actually, there were some insights that we did not expect. I would say one regarding industries, we knew that, I mean, traditional players in B2B and B2C were quite different. But what we discovered is that progressively ecommerce has become a battlefield on which pretty much all players are positioned.

That would be a first insight. A second one around use cases would be about the emergence of something new. We realized that there are very few players working on CLM, so [00:20:00] contract lifecycle management, working on processes, approbation of contracts, contracts, maintenance, and yet it has become. A high demand topic within our audience.

So probably an area in which to look closely in the future. And a third insight would be on the level of support. Of course, over 90 percent of vendors are offering support on integration, on support to, to implementation as well. So over 90 percent of vendors are offering support on integration and support implementation.

When it comes to data preparation, pricing strategy, processes review. Or change management, all these topics are only addressed by, I mean, less than a half players on the market. So there is space and there is a real need for a consulting support before and during implementations. 

Barrett Thompson: Those are great insights.

And I think something that could take someone a long time to discover on their [00:21:00] own, so the value of the guide is that, you know, you can see these things right away and then judge who is who in the pricing software space. Malik, I have a hypothesis. I would love your point of view on it. Sometimes I feel like companies that are shopping for B2B pricing software solutions, they may be looking at the wrong things or looking at them with the wrong importance when it comes to their criteria list.

And so I wonder if you have a point of view on that. Where they should spend more time. What should they focus on that perhaps they're overlooking today that would be important in making their selection and even places where maybe they should spend less time. You know, you don't have to look so deep in this area over here because it's only correlated to.

3 percent or 5 percent of your project success. And this other factor that you're not thinking about equates to 20 percent of your project success. So you [00:22:00] really want to screen your vendors, candidates for this factor. Any experience there one way or the other? 

Malik Rajan: Yes. And actually I would say that the answer varies depending on who is the buyer.

The buyer can either be. A sales director or a C level launching the initiative saying, telling, I don't know, the director or the sales director, we need something to work on our pricing. Find me something. Or it can be a pricing professional saying, well, I need to automate and I need to get to the next level, right?

When it's a pricing professional. In my experience, they tend to be very precise in what they're looking for. They tend to consider that they are unique and they hesitate for a long time, uh, between the, the make or buy, uh, option. And when they select a vendor, they try to find something that is highly con and, and that has very in depth, very detailed [00:23:00] features.

That's, I mean, of course it's important to have something that matches the specificities of the business, but what they tend to neglect. Is, and it would probably make some people smile, but the ergonomy of the software, how easy is it to use actually, this is a key element. And I think that sometimes it's better to simplify, to sacrifice some of the complexity that pricers wants to, to put in their software and to select something that is simpler, but that is easier to understand and thus easier to adopt for salespeople.

Great ideas and complexity are actually the easy part where people are failing in getting the dollar value after implementing a software is the implementation and if you want to get a good implementation, it's better to start simple. 

Barrett Thompson: That's a great insight. I think it might be the case that many businesses are carrying along the accumulated complexity [00:24:00] of 20 years of practice in pricing, three or four price directors that are no longer there.

Representing four or five market conditions that are not the condition they're facing today. And yet that becomes the starting point for the 350 requirements, you know, that I must have in my pricing software. So I've seen that same phenomenon. It feels like a lot of complexity and often it's hard for me to see that this is adding value so much as it's just unquestioned and it feels like if you're investing in a new pricing software solution, that's a great time to reevaluate.

What kinds of specificity are really strategic and helping my business and which things are just being dragged along from the past and now would be the time to cut them loose. So that definitely resonates with me. Malik, is there anything else you'd like to share with our audience before we close the podcast today?

Malik Rajan: I think [00:25:00] probably just a word coming back to the question of AI and It will probably compliment my answer to the last question you asked about pricing software and where people are spending too much time on. The question of AI has been quite a significant one in the choice of the vendors and many people, many pricing practitioners today are using pricing software, but they're not sure it's doing, it's actually doing AI.

And I think what we don't emphasize enough is that. The definition itself of AI has been debatable and will be debatable because it evolves with time. So I don't know if you are a chess player Barrett, but I am. Yes. Yeah. Great. As it turns out. So you probably remember in 1996, when Deep Blue defeated Gary Kasparov, everybody was talking about how AI defeated the first, [00:26:00] for the first time, a world champion in chess.

Barrett Thompson: Yes. 

Malik Rajan: Um, What used to be called AI at the time is actually called today, MuteForce. It's an engine that tests all the solutions to determine the next move. Today, we have something called, for instance, AlphaZero, which was bought by Google a few years ago. And that is an engine which understands the game, quote unquote, and that sometimes make a move that you and I as chess players would call intuitive.

So. A very different way of playing. And I think the same way, what used to be called yesterday AI could be called today advanced algorithms and the definition of AI today will be different tomorrow, the bottom line, the truth is in your ROI, really. So look at your P& L, are you getting money for what you invested in, in your software?

And two, my advice would be keep on looking out there for more tools, [00:27:00] which can go further than what we're doing today. It's a great opportunity for pricing practitioners and for vendors who are on top of, uh, of innovation to produce new products and, and use, uh, AI to, to generate more value within companies.

Barrett Thompson: Without question, we are sitting at an exciting time in the history of pricing and technology. Malik, thank you so much for your insights today. We really appreciate you joining us on the podcast. Thank you. I want to thank each of our podcast listeners for being with us.

Please check out the show notes for more information on The Pricing Club and also a link to download their excellent pricing software guide. We're committed to your success and if you need any assistance, reach out to us at zilliant.com. Would you do me a favor and please rate and review the show as it helps us continue to put out great free content.

Until [00:28:00] next time, have a great day.

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