case study – Essay Furious


Six Sigma Pricing

Acme Incorporated

The Problem

In this case study, we describe how a global manufacturer of industrial equipment, which
we will call Acme Incorporated, applied Six Sigma rigor to its price-setting process for
one product line to great effect.
The trigger for the project was a change in market conditions, which put Acme under
considerable pricing pressure. The price of two key raw materials, steel and petroleum,
had risen quickly and sharply, threatening to inflict a projected $20 million in unplanned
annual incremental costs on the company. Some of its steel suppliers had even refused
to honor existing contracts. Overall, average costs had doubled within the space of a few
months.
The company had no choice but to raise list prices. But by how much? Raise prices too
much, and Acme stood to lose customers to rivals. Raise prices too little, and it would
not be worth the effort to announce and implement the change. Moreover, Acme could
not be sure whether a nominal increase in list prices would even hit the bottom line. The
organization’s pricing processes made it difficult to control the price that was actually
invoiced.
Acme’s myriad products could each be configured in numerous ways, according to
customers’ needs, and the company published list prices for every possible
configuration. But each sale then had its own individually approved discount and hence
its own invoiced price. Prices and discounts were set by the pricing division. Acme’s
sales division had market-specific blanket ceilings for percentage discounts on all
products, and sales reps had to obtain authorization from Pricing to offer deeper
discounts. Pricing either approved the request or set a slightly higher approved price,
typically expressed as a percentage of the list price. After the transaction was
completed, Sales invoiced the customer with a final transaction price, which was (in
principle) the same as or slightly higher than the approved price.
But it was well known that top management frowned on losing market share, and the
absence of any effective controls encouraged some salespeople to short-circuit the
process. A sales representative would ask Pricing for a discount that was much deeper
than the guidelines allowed for, and even if Pricing complied, the representative might


offer a further, unapproved discount to close a deal. For instance, one order approved by
Pricing at $81,000 was actually invoiced at $75,000, and another at $31,000 was
invoiced at $28,000.
With tens of thousands of sales transactions per year, the task of making sure each
invoice accorded with the list and approved prices was daunting. But the lack of control
over final prices meant that even if Acme could work out how much of a hike in list prices
the market could bear, the company still could not be sure it would actually see the
increase in each transaction or even overall, across transactions.


The Project

How to get a grip on the situation? Senior managers began by considering what other
parts of the organization had done to bring similarly variable processes under control.
They knew that Acme had enjoyed considerable success in reducing manufacturing
variability by applying the famous Six Sigma discipline. Employees from different
functions and organizational levels understood the methodology, and some had
company-specific Six Sigma certification, holding titles like Green Belt and Black Belt,
following the example of such companies as Motorola and General Electric.
It seemed to Acme’s executives that pricing closely resembled many manufacturing
processes. A product’s invoiced price could be considered a final product, the result of a
“manufacturing” process encompassing several stages. They decided, therefore, to pilot
a Six Sigma pricing project in one of the company’s North American subsidiaries. If the
project led to better control of final prices, they could roll out the approach throughout the
company’s entire global operations.
A manager from Pricing was appointed as project manager to carry out the five Six
Sigma steps: define, measure, analyze, improve, and control. He was given the help of a
Six Sigma expert, or Master Black Belt, recruited from the manufacturing side. The
project sponsor was the senior executive responsible for pricing.


Definition: The first step in any Six Sigma project is to clarify the problem and
narrow its scope in such a way that measurable goals can be achieved within a few
months. Then a team is assembled to examine the process in detail, suggest
improvements, and implement those recommendations. In the manufacturing realm,
project managers and their sponsors typically begin by defining what constitutes a defect
and then establish a set of objectives designed to reduce the occurrence of such
defects. (The phrase “Six Sigma” in fact implies a goal of reducing the number of defects
to less than 3.4 per million occurrences, assuming that the quality of a product’s
attributes varies according to a normal bell-shaped distribution pattern.)
Acme’s project manager proposed that a defect should be defined as a transaction
invoiced at a price lower than the one Pricing had approved (or lower than those allowed
by the current blanket guidelines, when approval had not been sought). Note that
defects are being defined in relative terms, according to the blanket discount ceilings set
for the salespeople and the guidelines established by the pricing analysts. If the market
were to take a turn for the worse, the ceilings could he raised; if the market were to
strengthen, they could he lowered. A defect occurs only when the actual invoiced price is
out of compliance with the guidelines.
Once the definition of a defect was set, the project manager, with the help of the
sponsor, recommended an appropriate scope for the project — that is, whether it should
be limited to only one particular product line or applied to several. In this case, the
project sponsor limited the scope to a single product line.
The next step for the project manager is to propose a charter for the project that
specifies the expected deliverables. Given the definition of a defective price, it was clear
that this project would have to deliver:
a better understanding of the existing pricing process;
a modified process to control and, hence, improve final transaction prices;
ways to track improvement in final prices and to monitor compliance with the
process and with pricing guidelines.


Next, to collect data, carry out analysis, and ensure everyone’s buy-in for any
subsequent implementation, the project manager enlisted people from the pricing,
finance, marketing, IT, and sales divisions to the part of the Six Sigma team. The various
team members were selected for their functional and analytical expertise. The finance
person, for example, was chosen because she was familiar with the many pricing-related
reports Acme was currently generating and also with many of the company’s data
sources.
In addition, to endow the project with institutional backing and to ensure that team
members had good access to data, the project manager asked people in positions of
influence at Acme to serve on a steering committee for the project. The chair of the
committee was the project sponsor. Other members included the director of sales, the
vice president of IT, the vice president of finance, and the vice president of marketing.
They agreed that the project manager would meet with the team and the steering
committee as needed to keep them apprised of the project’s progress.
The first duty of the team was to confirm the proposed problem definition and project
charter and to set a financial goal for the project. That was no easy task, as it was the
first time Acme had embarked on such a project. Nonetheless, the team set a goal of
increasing revenues by $500,000 in the first year following implementation. This
additional revenue was to come entirely from more efficient price management -in other
words, from actions that did not incur any losses in market share or sales volumes. This
was a far more ambitious number than Acme had ever set for comparable manufacturing
or service Six Sigma projects, which had typically delivered average annual cost savings
of less than $100,000.
Measurement: In the second step of a Six Sigma project, the team gathers data
and prepares it for analysis. At Acme, the project manager began by mapping the price
agreement process, with team members helping to fill in process details. To generate
and verify the information he needed, the project manager formally interviewed eight
colleagues from five functional divisions: IT, sales, pricing, finance, and marketing. He
also sought informal feedback from other people in these functions. As a result of this
exercise, the team was able to draw a high-level diagram of the entire process showing
the flow of information from one step to the next (Figure 2).

Figure 1 High-level Diagram of the Entire Process
The map was supported by documentation detailing the inputs (called X’s, in Six Sigma
parlance) and outputs (Y’s) associated with each step, showing all the people and IT
systems involved, and specifying whether the decision making inputs could be controlled
by Pricing or Sales. The eventual output variable for the entire process is the final
transaction price, but intermediate steps have their own intermediate outputs. For
example, after an initial discussion with a customer, the output could he an agreed upon
price that conforms to guidelines, or it might be a proposed price that would have to be
referred to Pricing for approval. The inputs are the characteristics of the deal, such as
the product type, order size, or time of year.
The map revealed a pricing process with six main steps, which seemed straightforward
in principle. But it was clear that in practice the sequence did not work smoothly, that it
was replete with exceptions and shortcuts, and that the quality of inputs available to
Sales or Pricing personnel in any step could be quite poor.
1. PERFORM INITIAL PRICE ASSESSMENT WITH CUSTOMER (SALES). The inputs for
this are the list price, the blanket discount guidelines for Sales in the particular


market, and the customer’s product and pricing requirements. The output is a
tentative price (that is, a discount off the list price). Approval is needed from
Pricing if the discount is deeper than the maximum authorized for the particular
market.
2. SUBMIT PRICE APPROVAL REQUEST TO PRICING (SALES). For the Pricing personnel
receiving such a request, the inputs are the price the sales rep has requested
and the guidelines for pricing analysts. In practice, sometimes this step, and most
of the subsequent ones, were circumvented when a sales rep offered a final
discounted price to the customer without prior Pricing approval.
3. COMPILE QUOTATION INFORMATION (PRICING). The input is the information about
the customer and the order provided by the sales rep to support his or her
request. The output is the complete details of the transaction in question. This
step should be trivial but often, in practice, the sales rep did not or could not
provide enough information about the quotation, and the Pricing analyst or
manager would have to chase around to get the missing information.
4. REVIEW AND ANALYZE QUOTE (PRICING). Inputs are the completed quotation
information generated in the previous steps (including the tentative price the
sales rep has requested); reports summarizing the history of similar transactions
in the particular market; and, when available, reports of similar transactions with
the same customer. In theory, such reports would guide Pricing’s efforts to
accept or modify the price requested and to produce the output — the tentative
approved price. In reality, with information scattered in different computer
systems, the guidelines available to the pricing analyst could be quite poor. Or
the sales rep might request a very quick turnaround, leaving little time for a
pricing analyst to carry out this step effectively.
5. COMMUNICATE APPROVAL TO SALES OFFICE (PRICING). The input is the tentative
approved price from the analysis in the previous step and any additional
information regarding the order and customer. The output is the approved price.
This should be the penultimate step before the sales rep approaches the
customer but, in practice, this could instead be the beginning of a prolonged
negotiation between Sales and Pricing. Other people may weigh in at this point
as well, and the final approved price could end up quite a bit lower because of
pressure from a manager or from a more senior sales or marketing executive.


market, and the customer’s product and pricing requirements. The output is a
tentative price (that is, a discount off the list price). Approval is needed from
Pricing if the discount is deeper than the maximum authorized for the particular
market.
2. SUBMIT PRICE APPROVAL REQUEST TO PRICING (SALES). For the Pricing personnel
receiving such a request, the inputs are the price the sales rep has requested
and the guidelines for pricing analysts. In practice, sometimes this step, and most
of the subsequent ones, were circumvented when a sales rep offered a final
discounted price to the customer without prior Pricing approval.
3. COMPILE QUOTATION INFORMATION (PRICING). The input is the information about
the customer and the order provided by the sales rep to support his or her
request. The output is the complete details of the transaction in question. This
step should be trivial but often, in practice, the sales rep did not or could not
provide enough information about the quotation, and the Pricing analyst or
manager would have to chase around to get the missing information.
4. REVIEW AND ANALYZE QUOTE (PRICING). Inputs are the completed quotation
information generated in the previous steps (including the tentative price the
sales rep has requested); reports summarizing the history of similar transactions
in the particular market; and, when available, reports of similar transactions with
the same customer. In theory, such reports would guide Pricing’s efforts to
accept or modify the price requested and to produce the output — the tentative
approved price. In reality, with information scattered in different computer
systems, the guidelines available to the pricing analyst could be quite poor. Or
the sales rep might request a very quick turnaround, leaving little time for a
pricing analyst to carry out this step effectively.
5. COMMUNICATE APPROVAL TO SALES OFFICE (PRICING). The input is the tentative
approved price from the analysis in the previous step and any additional
information regarding the order and customer. The output is the approved price.
This should be the penultimate step before the sales rep approaches the
customer but, in practice, this could instead be the beginning of a prolonged
negotiation between Sales and Pricing. Other people may weigh in at this point
as well, and the final approved price could end up quite a bit lower because of
pressure from a manager or from a more senior sales or marketing executive.


6. SUBMIT PRICE TO CUSTOMER (SALES). The input is the approved price. The output
is the tentative price for invoicing that the sales rep submits to the customer. At
this point, the sales rep should simply be offering the customer the approved
price. But this entire project was based on the observation that the price the
sales rep actually offered the customer, as indicated by the invoice from the
subsequent transaction (if there was one), could be quite a bit lower than the
approved price.
Before moving on to the next stage of the project, the team assessed the quality of the
input data that supported the pricing process. It would be difficult to improve the process
if the current steps systematically produced faulty data. Moreover, the team needed to
have faith in the numbers on which it was going to base its findings and
recommendations. By examining representative samples of data in detail, the team was
able to confirm that the actual sales transaction data were by and large stable and
reliable, even though different reports presented the information in different formats.
Analysis: Once a process has been mapped and documented, and the quality of
the hard data supporting it has been verified, the Six Sigma team can begin the analysis.
The team members usually start by meeting to identify the ways in which people fail to
act as needed or fail to assert effective control at each stage.
To aid in this analysis, the Acme team used a common Six Sigma tool called the Cause
and Effect (C&E) Matrix to guide discussion. With the help of the Master Black Belt, the
project manager held a workshop using the tool to identify problems and put them in
order of priority. The rows on the C&E matrix list all the steps in the current process, and
the columns list all of the requirements a particular process customer has for the entire
process. Each requirement is then weighted according to how important it is to that
customer. (See Figure 2) For Acme’s team, the customers were senior executives who
wanted better controls in the pricing process and, eventually, better price performance.


6. SUBMIT PRICE TO CUSTOMER (SALES). The input is the approved price. The output
is the tentative price for invoicing that the sales rep submits to the customer. At
this point, the sales rep should simply be offering the customer the approved
price. But this entire project was based on the observation that the price the
sales rep actually offered the customer, as indicated by the invoice from the
subsequent transaction (if there was one), could be quite a bit lower than the
approved price.
Before moving on to the next stage of the project, the team assessed the quality of the
input data that supported the pricing process. It would be difficult to improve the process
if the current steps systematically produced faulty data. Moreover, the team needed to
have faith in the numbers on which it was going to base its findings and
recommendations. By examining representative samples of data in detail, the team was
able to confirm that the actual sales transaction data were by and large stable and
reliable, even though different reports presented the information in different formats.
Analysis: Once a process has been mapped and documented, and the quality of
the hard data supporting it has been verified, the Six Sigma team can begin the analysis.
The team members usually start by meeting to identify the ways in which people fail to
act as needed or fail to assert effective control at each stage.
To aid in this analysis, the Acme team used a common Six Sigma tool called the Cause
and Effect (C&E) Matrix to guide discussion. With the help of the Master Black Belt, the
project manager held a workshop using the tool to identify problems and put them in
order of priority. The rows on the C&E matrix list all the steps in the current process, and
the columns list all of the requirements a particular process customer has for the entire
process. Each requirement is then weighted according to how important it is to that
customer. (See Figure 2) For Acme’s team, the customers were senior executives who
wanted better controls in the pricing process and, eventually, better price performance.

Figure 2 the Cause and Effect (C&E) Matrix

The team did not actually assign number scores. Instead, members used the structure of
the matrix to focus on possible causes for lack of control at each step. The process
diagram was projected as a slide, and team members used a whiteboard to discuss
each step in turn. The main findings from this exercise suggested that the defects arose
largely from problems in steps 1, 4, and 6, and from failures in reporting.
STEP 1. The team found that the ability of the sales reps to help customers select the
right products, and the right features for those products, was critical to managing
customers’ price expectations. Unfortunately, salespeople’s failures in assessing
customer requirements could not be easily detected and controlled.
STEP 4. The key constraint here was time; sales reps sometimes wanted discount
approval within hours of forwarding a request, which made it difficult for pricing analysts
to work out whether or not the discount was reasonable. Giving Pricing more time for
analysis would make it easier to reduce the incidence of defective prices.

Figure 2 the Cause and Effect (C&E) Matrix

The team did not actually assign number scores. Instead, members used the structure of
the matrix to focus on possible causes for lack of control at each step. The process
diagram was projected as a slide, and team members used a whiteboard to discuss
each step in turn. The main findings from this exercise suggested that the defects arose
largely from problems in steps 1, 4, and 6, and from failures in reporting.
STEP 1. The team found that the ability of the sales reps to help customers select the
right products, and the right features for those products, was critical to managing
customers’ price expectations. Unfortunately, salespeople’s failures in assessing
customer requirements could not be easily detected and controlled.
STEP 4. The key constraint here was time; sales reps sometimes wanted discount
approval within hours of forwarding a request, which made it difficult for pricing analysts
to work out whether or not the discount was reasonable. Giving Pricing more time for
analysis would make it easier to reduce the incidence of defective prices.


STEP 6. Sales reps sometimes offered final prices to customers without prior approval,
leaving Pricing with little choice but to OK the price after the fact. The team agreed that
such situations should be tracked.
REPORTING. Information about transactions was not gathered or presented in a
consistent manner. The unit’s various functions generated more than a hundred different
transaction reports that summarized sales data by product line, market, and other ways
at weekly, monthly, or quarterly intervals. Discrepancies and redundancies in those
reports led to variability in the decisions analysts came to in deciding prices. This meant
that managers could neither track pricing defects easily nor obtain the data they needed
for Step 4 in time to do adequate due diligence on price quotes.
After completing the C&E workshop, the project manager did a standard statistical
analysis of transaction-level data for all of the individual transactions that occurred in the
two years before the project started. As the exhibit “What Are We Really Charging?”
reveals, he confirmed that actual transaction prices were distributed along normal bell-
shaped curves around the average transaction prices. But he also discovered distinct
bell curves for different transaction sizes: average discounts increased the higher the list
price of the transaction (Figure 3). That indicated that many customers were willing to
pay higher prices for smaller transactions, suggesting that pricing guidelines could and
should be differentiated for different-sized transactions.

Figure 3 Transaction Price as a Percentage of Price List
STEP 6. Sales reps sometimes offered final prices to customers without prior approval,
leaving Pricing with little choice but to OK the price after the fact. The team agreed that
such situations should be tracked.
REPORTING. Information about transactions was not gathered or presented in a
consistent manner. The unit’s various functions generated more than a hundred different
transaction reports that summarized sales data by product line, market, and other ways
at weekly, monthly, or quarterly intervals. Discrepancies and redundancies in those
reports led to variability in the decisions analysts came to in deciding prices. This meant
that managers could neither track pricing defects easily nor obtain the data they needed
for Step 4 in time to do adequate due diligence on price quotes.
After completing the C&E workshop, the project manager did a standard statistical
analysis of transaction-level data for all of the individual transactions that occurred in the
two years before the project started. As the exhibit “What Are We Really Charging?”
reveals, he confirmed that actual transaction prices were distributed along normal bell-
shaped curves around the average transaction prices. But he also discovered distinct
bell curves for different transaction sizes: average discounts increased the higher the list
price of the transaction (Figure 3). That indicated that many customers were willing to
pay higher prices for smaller transactions, suggesting that pricing guidelines could and
should be differentiated for different-sized transactions.

Figure 3 Transaction Price as a Percentage of Price List



In addition, the analysis revealed that salespeople serving certain territories within the
same market had a greater tendency than their colleagues in other territories to invoice
at prices either significantly higher or lower than approved. The team concluded from
this analysis that different pricing guidelines needed to be set not only for different
transaction sizes but also for different territories within the same market and possibly
even for different customer groups. Pricing guidelines had always been market specific
but were not differentiated by transaction size, by territory, or, for the most part, by
customer group.
Improvement: The results from the analysis created a lot of positive buzz among
Acme’s senior managers. It was time to recommend modifications to the existing
process to decrease the number of unapproved prices without creating an onerous
approval process. Response speed was critical for salespeople so they could continue to
act quickly and close deals. But this was a challenge for pricing personnel. What they
needed, the team concluded, was clear guidelines to help them decide when they should
or should not approve any deeper-than-usual discounts that Sales had requested or
promised to customers.
So the team proposed giving graduated discount approval authority to individuals in
three levels of the organization’s hierarchy: sales reps or managers, pricing analysts,
and the pricing manager. Finally, at a fourth level, top executives could continue to
approve discounts without any limit. So, for example, in one particular market for a
transaction size between $100,000 and $150,000, a sales representative could offer any
discount up to 30%, but to be able to offer an even lower price to a customer, he would
have to contact a pricing analyst for approval. She would first check against the
guideline price for that region, type of product, transaction size, and perhaps other
criteria, and use this to negotiate with the sales rep any further discount, up to 35%. If
the sales rep felt that the situation demanded an even lower price than the analyst could
authorize, the request would be elevated to the pricing manager, who could approve a
discount of up to 40%. If the salesperson was going for an even lower price, the request
was passed up to a specified group at the top leadership level, which alone could


approve a higher discount. Making both the guidelines and the escalation process clear
made the process more efficient and faster.
In cases where sales representatives had already offered a customer a price and
needed post hoc authorization, the new process required that the rep involve his boss,
who would have to e mail or call Pricing for approval. The price already offered would
still be honored, but now reps could be held more accountable for making unauthorized
commitments.
The new distribution of pricing responsibilities required a process for developing — and,
from time to time, reevaluating — all of the discount limits. To ensure that limits did not
become out dated, the team created a spreadsheet tool that let Pricing work off recent
transaction history.
The team also created exception codes that enabled Acme to track the reasons for
variations in prices. The codes made it clear who had been involved in the decision to
deviate from guidelines. For instance, if someone from the leadership had approved a
deep discount, the eventual transaction was tagged with a Leadership Approval code. If
Acme needed to match a competitor’s aggressive price, the pricing manager could
approve a low price that was tagged with a Competitive Match code. If a sales rep had
already promised a price to a customer before getting approval, the transaction would
have to be tagged with a Sales Error code. What’s more, Pricing would now have 24
hours to do due diligence before approving a price request, and Acme tracked which
sales reps consistently asked for extra-fast turnarounds.
Control: In the final stage of a Six Sigma project, the team creates controls that
enable the company to sustain and extend the improvements. Acme set up a monthly
review at which executives — mainly the vice presidents of marketing, sales, and finance,
along with their direct reports — look at the company’s overall performance and at
particular geographic markets and transaction sizes to see if the new process is indeed
resulting in higher average transaction prices, fewer exceptions, and no loss in market
share. If prices are under control but the company is losing market share, it might be a
sign that Acme needs to review its pricing guidelines or the way sales reps are


managing their territories. If the review group notices that a particular sales rep is
frequently making Sales Error transactions, the rep’s boss will take a closer look at how
that person is negotiating. And if the review group sees that transactions of a particular
size regularly require the pricing manager’s approval, the group would instigate a
reexamination of the pricing guidelines for that transaction size.

The Payoff


The initial goal of generating half a million dollars in incremental revenues in the first
year was handily exceeded in only three months. More important, following a
subsequent across-the-board list price increase, the average transaction price for the
pilot product line went up by slightly more than the list prices; in other words, the
increase was fully reflected in the top line. But other product lines realized less than
half the increase. That list price increase, together with the fighter controls the Six
Sigma team developed and implemented, resulted in the $5.8 million in incremental
sales in just the first six months following implementation going straight to the
bottom line.

From an organizational perspective, the Six Sigma approach has considerably
reduced the friction inherent in the Pricing-Sales relationship. The exercise of
systematically collecting and analyzing price transaction data gave pricing analysts
hard evidence to counter the more intuitive claims that the sales staff had typically
advanced in negotiating discounts. A frequent refrain, for instance, was: “My
customers want just as high a percentage discount for a $3,000 transaction as they
would get for a $500,000 one.” Now that Pricing knows for certain that Acme’s
customers tend to accept lower discounts on smaller transactions and that some
customers are willing to pay higher prices than others, analysts can more easily push
back when negotiating price approvals with sales staff. They can respond confidently
and authoritatively when sales reps ask questions like “Why is my authorized price
higher than those in another market?” or “How come we don’t authorize the same
price for all customers?”

Salespeople, for their part, are less likely to feel that the negotiation with Pricing is
driven by political motives or by a purely personal desire to assert control, and they
can, of course, use the same data to press their own points. It became clear,


managing their territories. If the review group notices that a particular sales rep is
frequently making Sales Error transactions, the rep’s boss will take a closer look at how
that person is negotiating. And if the review group sees that transactions of a particular
size regularly require the pricing manager’s approval, the group would instigate a
reexamination of the pricing guidelines for that transaction size.

The Payoff


The initial goal of generating half a million dollars in incremental revenues in the first
year was handily exceeded in only three months. More important, following a
subsequent across-the-board list price increase, the average transaction price for the
pilot product line went up by slightly more than the list prices; in other words, the
increase was fully reflected in the top line. But other product lines realized less than
half the increase. That list price increase, together with the fighter controls the Six
Sigma team developed and implemented, resulted in the $5.8 million in incremental
sales in just the first six months following implementation going straight to the
bottom line.

From an organizational perspective, the Six Sigma approach has considerably
reduced the friction inherent in the Pricing-Sales relationship. The exercise of
systematically collecting and analyzing price transaction data gave pricing analysts
hard evidence to counter the more intuitive claims that the sales staff had typically
advanced in negotiating discounts. A frequent refrain, for instance, was: “My
customers want just as high a percentage discount for a $3,000 transaction as they
would get for a $500,000 one.” Now that Pricing knows for certain that Acme’s
customers tend to accept lower discounts on smaller transactions and that some
customers are willing to pay higher prices than others, analysts can more easily push
back when negotiating price approvals with sales staff. They can respond confidently
and authoritatively when sales reps ask questions like “Why is my authorized price
higher than those in another market?” or “How come we don’t authorize the same
price for all customers?”

Salespeople, for their part, are less likely to feel that the negotiation with Pricing is
driven by political motives or by a purely personal desire to assert control, and they
can, of course, use the same data to press their own points. It became clear, for

 


example, that some sales offices that had previously been under scrutiny for
aggressive pricing practices had in fact been acting perfectly reasonably given their
local market conditions.

In light of the project’s success and its low cost, Acme is rolling out Six Sigma pricing
across the entire organization. Other companies operating in competitive
environments can also benefit from Acme’s experience as they look for ways to
exercise price control without alienating customers. They can transform the tenor of
the relationship between their pricing and sales staffs from adversity to relative
harmony by giving them a process for making joint decisions that are aligned with
company objectives and based on solid data and analysis.


 

WE’VE HAD A GOOD SUCCESS RATE ON THIS ASSIGNMENT. PLACE THIS ORDER OR A SIMILAR ORDER AND GET AN AMAZING DISCOUNT