Product Description

Apply Six Sigma to Your #1 Business Challenge: Pricing "Six Sigma is well known for having helped companies save billions of dollars. This book is the first to show us how to use it on the revenue side of the equation to generate profitable growth. This step-by-step guide will be an instant classic--a seminal book on a topic critical to profitability." --Robert Cross, Chairman and CEO, Revenue Analytics Inc. and author of Revenue Management "Six Sigma Pricing provides companies with a practical toolkit to improve their price management. The authors show executives how to use Six Sigma tools in their pricing processes and instantly improve profits and their bottom-line. This is a truly 'must-have' resource for managers everywhere." --Eric Mitchell, President, Professional Pricing Society Many companies have developed solid sales strategies-- but without equally good pricing operations, those strategies alone will not add a dime to the bottom line. The goal of pricing operations is to consistently control price deviations in transactions and contracts over time and across customer segments.This goal of ensuring the prices are not too low or too high in different transactions relative to guidelines lends itself perfectly to Six Sigma. Using the authors' breakthrough Six Sigma-based approach, you can systematically eliminate pricing-related revenue leaks, driving higher profits without alienating customers. You'll learn how to define pricing "defects," gather and analyze relevant pricing data, review pricing-agreement processes, identify and control failures, implement improvements, and then ensure continuous, ongoing improvement in price, profits and customer satisfaction. The book reflects the authors' pioneering experience implementing Six Sigma pricing. Whether you're a business leader, strategist, manager, consultant, or Six Sigma specialist, it will help you or your client recover profits that have been slipping through the cracks in pricing operations./ Learn why Six Sigma Pricing makes sense Why you should target pricing operations, and how to do it / Identify profit leaks from inefficient pricing operations Why "sloppy pricing" occurs, how to find it, and how to root it out / Illuminate your current pricing processes, so you can improve them Understand your market-facing and internally focused pricing processes pertaining to product launch and lifecycle price management, price increases due to escalation in costs of raw materials, promotions, and discounting / Set up your pricing operations for continuous improvement in line with your pricing and sales strategy Use Six Sigma to improve and control processes, ensuring alignment with agreed-upon strategy for pricing and sales / Create an organization that is successful at pricing Align different functions and levels of the company to achieve targeted profits

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Product Details

• Amazon Sales Rank: #286501 in Books
• Published on: 2007-09-01
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 288 pages

Review

 

From the Back Cover

Apply Six Sigma to Your #1 Business Challenge: Pricing

 

“Six Sigma is well known for having helped companies save billions of dollars. This book is the first to show us how to use it on the revenue side of the equation to generate profitable growth. This step-by-step guide will be an instant classic—a seminal book on a topic critical to profitability.”

—Robert Cross, Chairman and CEO, Revenue Analytics Inc. and author of Revenue Management

 

“Six Sigma Pricing provides companies with a practical toolkit to improve their price management. The authors show executives how to use Six Sigma tools in their pricing processes and instantly improve profits and their bottom-line. This is a truly ‘must-have’ resource for managers everywhere.”

—Eric Mitchell, President, Professional Pricing Society

 

Many companies have developed solid sales strategies– but without equally good pricing operations, those strategies alone will not add a dime to the bottom line.

 

The goal of pricing operations is to consistently control price deviations in transactions and contracts over time and across customer segments. This goal of ensuring the prices are not too low or too high in different transactions relative to guidelines lends itself perfectly to Six Sigma. Using the authors’ breakthrough Six Sigma-based approach, you can systematically eliminate pricing-related revenue leaks, driving higher profits without alienating customers. You’ll learn how to define pricing “defects,” gather and analyze relevant pricing data, review pricing-agreement processes, identify and control failures, implement improvements, and then ensure continuous, ongoing improvement in price, profits and customer satisfaction.

 

The book reflects the authors’ pioneering experience implementing Six Sigma pricing. Whether you’re a business leader, strategist, manager, consultant, or Six Sigma specialist, it will help you or your client recover profits that have been slipping through the cracks in pricing operations.

 

•Learn why Six Sigma Pricing makes sense

    Why you should target pricing operations, and how to do it 

 

• Identify profit leaks from inefficient pricing operations

    Why “sloppy pricing” occurs, how to find it, and how to root it out 

 

• Illuminate your current pricing processes, so you can improve them

    Understand your market-facing and internally focused pricing processes pertaining to product launch and lifecycle price management, price increases due to escalation in costs of raw materials, promotions, and discounting

 

• Set up your pricing operations for continuous improvement in line with your pricing and sales strategy 

    Use Six Sigma to improve and control processes, ensuring alignment with agreed-upon strategy for pricing and sales

 

• Create an organization that is successful at pricing

    Align different functions and levels of the company to achieve targeted profits

About the Author

Navdeep S. Sodhi is managing director of Six Sigma Pricing, a consulting firm based in Minneapolis and London. He has more than twelve years of global pricing experience spanning several industries: airlines, medical device, and B2B manufacturing. He has an MBA from Georgetown University. He has applied Six Sigma and Lean methods to pricing in his work for industrial manufacturers. He is the recipient of the Award of Excellence from the Professional Pricing Society. His articles on pricing have appeared in the Harvard Business Review, Quality Digest, The Pricing Advisor and the Journal of Professional Pricing. Navdeep is based in Minneapolis.

 

ManMohan S Sodhi is professor and head of Operations Management and Quantitative Methods at Cass Business School, City University London. Before coming to Cass, he consulted full-time for ten years at senior levels with Sabre, Accenture, and Scient in a variety of industries including chemicals, consumer-packaged goods, and airlines in the US and in Europe. His managerial articles have appeared in the Harvard Business Review, MIT Sloan Management Review, The Wall Street Journal, Supply Chain Management Review, and other prestigious journals. He has a Ph.D. from the Anderson School of Management at University of California, Los Angeles (UCLA) with previous degrees in manufacturing and in industrial engineering. He is based in London.

 

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Customer Reviews

A practical guide executing negotiated pricing policies
If your company negotiates prices, you need to read this book. The authors provide a welcome operational complement to the much broader literature on pricing theory. Pricing theory typically focuses on what price to set, and what policies to consider. This book focuses on how to execute those policies effectively, without the "defects" that sap profitability. Using a Six Sigma framework, the book identifies defects, or "sloppy pricing" in both prices per se, and pricing processes. Prices can be defective if they are too low, leaving money on the table, or too high, reducing purchases and leading to customer attrition. Processes can be defective if they do not meet defined service level agreements for turning around price approval requests (or if there is no defined service level). Eliminating or reducing these defects can lead to substantial profit gains, just as earlier Six Sigma efforts did with manufacturing defects.

The book comes in four parts, the "Motivation and Context," "Basics--Pricing Operations and Six Sigma," "Doing a Six Sigma Pricing Project," and "Enterprisewide Deployment." Throughout, the authors use an anonymized case study, based on their personal experience, to explicate the concepts in the book. For people familiar with the challenges described in the book, the first two parts will be a refresher, and the real interest will lie with the second half of the book. For executives and others who are not familiar with the concepts, the first half will be illuminating, while the second half may contain too much detail. Project managers and pricing wonks will want to cover the whole book.

So what if your company does not have expertise with Six Sigma? This is my only real problem with the book--not that you can't use the concepts, but that the title implies that the book applies primarily to Six Sigma junkies. Sodhi and Sodhi provide templates, common opportunities, and suggestions for managing scope to achieve not just conceptual improvements, but real-life, measurable benefit. There is enough information here to guide novices through the process, although you might want to consult with an expert. The authors also emphasize that Six Sigma is one possible methodology to improve pricing operations, and the one that the authors have direct experience practicing, but it is not the only road. One benefit of going with Six Sigma, however, is that it provides a framework for collaboration between different parts of the company.

This book will not help you set list prices, or build a pricing practice, but it will help you build a pricing project team, and get much more benefit from your current pricing organization. For companies that have a multi-step pricing process, especially one that involves sales negotiations, this will be one of the most valuable books you will read this year.

Nitty gritty pricing
Of all the books on pricing, very few are written for the pricing professional. When they are, often the discussion centers on a strategy, tactic or analytic technique and what it means for profitability or revenue. At the end of the day, all these ideas, frameworks and techniques must degenerate into action. Someone has to do something. However, most books remain mute on the details of getting work done - all except Six Sigma Pricing. This book is a gem!

Six Sigma Pricing provides a roadmap to improving the realized price of products to anyone concerned with managing and implementing pricing in an organization. Drawing on the techniques of Six Sigma, the authors (one a practitioner the other an academic) focus on pricing operations - the boiler room where all the pricing details are sweated out and the work gets done in an organization.

In Section I of the book, Motivation and Context, the reader gets some background on how pricing and six sigma are related. Section II, Basics - Pricing Operations and Six Sigma, deals with the relationship between six sigma and pricing operations. Section III, Doing a Six Sigma Project, is self explanatory but is unique in its use of a single case study throughout. Section IV deals with the ins and outs of an enterprisewide deployment of a Six Sigma project.

Overall, I think this book is a useful addition to a pricing professional's library. It provides encouragement when there is doubt that any change will occur. It provides a map including road signs and danger signs. But most of all, it tells you that pricing operations can be improved and how.

The best book to cover the process of pricing
Pricing is a hot topic. This book is special: it covers the process of pricing in great detail and outlines some of the pitfalls of traditional pricing processes. In addition, it adds a special angle to the topic: seeing pricing as a (tactical) process, where Six Sigma tools can and should be applied to improve consistency, scalability, and performance. After taking you through each step - Define, Measure, Analyze, Improve, Control - you will be able to apply Six Sigma rigor to the topic of pricing, no matter whether you already have Six Sigma experience in other areas (operations) and regardless of how far you are already in implementing advanced pricing methods. An excellent read and a highly needed practical perspective on the process of pricing.