From last-second, buzzer-beating shots to the billion-dollar-bracket challenge, the euphoria of March Madness sends millions of fans into synchronized chaos each year. The tournament is the NCAA’s most highly anticipated phenomenon. It grips the nation with excitement throughout the month of March and into the first week of April, as teams faceoff to determine the national champions of college basketball.
In the basketball realm, winning the game advances your team to the next level on the bracket. Just as there are levels in basketball, there are levels to pricing maturity, with a logical progression once key process benchmarks and cultural changes have taken effect. As you move along the bracket, the number of teams advancing to the next level reduces by half, just as it is true that the number of organizations that advance along the journey decreases after each step.
So what do Connecticut, Kentucky and your organization have in common? More than you think. Here are some similarities I’ve noticed in the progression of winning basketball organizations on the NCAA bracket and pricing organizations on the journey to pricing excellence.
Round of 64 – We made it! There were 374 Division I teams in college basketball this season, all of whom started with the dream of competing for and winning the national championship. The teams invited to participate in the tournament have excelled throughout the course of the season, either winning their conference championship or being selected by a committee. Similarly, organizations that are interested in embarking on the journey to pricing excellence have excelled in their industries. They recognize pricing as an important lever to increase their revenue and profits. Everyone at this level – teams and organizations alike – has their eyes on the next steps.
Round of 32 – At this level, pricing organizations are reactionary. They’re trying to control the latest array of demands for urgent pricing and excessive discounts or T&Cs. The analytic requirements are basic, with analysts required to respond quickly to a high volume of requests. We find the same with basketball teams: In this playoff round, teams often play reactive basketball. They lose the game, getting behind early and spending the rest of the time trying to catch up. Just as in the playoffs, to move up, organizations must gain control. They must implement tools and processes that support a proactive defense instead of a reactive offense.
Sweet Sixteen – As organizations reach this round, they are proactively controlling pricing and enforcing policies. They have implemented analytics and guidelines to help manage their organization’s pricing. Their strict policies may place them in a difficult spot with the sales team, which often sees them as out of touch with the market and the needs of their customers. Organizations that look to advance pricing to the next level need to understand the value their goods and services delivered to their customers.
Similarly basketball teams at this level are proactive in their game. They are disciplined and play fundamental basketball. To advance to the next playoff, players must know the depth and strengths of their teammates and when to rely on their skill sets.
Elite Eight – At this level, the pricing organization is viewed as a business partner, as they work with Sales and Marketing to strategically set prices for their products and services based on the value they deliver. They also no longer depend on a cost-plus pricing strategy, and they’ve created a corporate culture around pricing as they train their sales forces to sell based on value. Compensation is based on the profit the company will yield instead of the revenue amounts individuals will generate. Similarly, teams at this level play together. They understand the importance of cohesiveness and value the success of the team more than their individual contributions on the scoreboard. To advance to the next level, organizations will use science to optimize their pricing and analyze their customers’ response to their offerings.
Final Four – By the time basketball teams and organizations reach this point, you will witness optimization of both players and prices. At this juncture, players excel as with an increased degree of intensity and precision. They use science to understand the skill sets of their players and their competition. Similarly, companies at the Final Four level are precise in their sales offerings as they understand each customer’s willingness to pay. They have “Big Data” and they know how to use it, and scientific analytics enables them to optimize prices and segment their customers. The company’s culture embraces the importance of pricing, with an organizational structure that supports the authority of a pricing leader who is often responsible for painting the picture of their customers, their market and the competition.
Championship – Reaching this point is a feat known only to those companies that have implemented pricing and sales effectiveness strategies. Similar to the recognition that championship basketball teams receive, companies at this level are recognized for outperforming their competitors’ business results. They are recognized as pricing powerhouses in their industries, and have the tools and resources in place to sustain this position for years to come. Many basketball players at this level go on to careers in the NBA, just as pricing initiative leaders often advance to senior management roles based on their successful track records.
In my role as a strategic consultant at PROS, I connect with a lot of people from a variety of industries, and they all share one common goal – to take their organizations to the next level. One of the best parts of my job is knowing our customers outperform the S&P 500 by 27%. Now that’s a championship stat.
Basketball great Michael Jordan summed it up well: “Talent wins games, but teamwork and intelligence wins championships.”
How is your team working to advance to the next level? What does winning look like in your organization?
Post written by Mary Underwood
