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Beyond the Black Box in Pricing
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Beyond the Black Box in Pricing

Rodrigo Garcia Escudero and Jeff Robinson
Boston Consulting Group, 2021
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Editorial Rating

7

Qualities

  • Overview
  • Background

Recommendation

In the past, pricing was the Wild West, with a floor, a ceiling, and very little else to guide a sales team besides years of experience and strong gut instincts. When algorithms came along, companies thought they might take the human instinct – and therefore, the human error – out of pricing. But salespeople resented feeling like order takers rather than trusted professionals and balked at an algorithm doing their job. Most companies are now pursuing a human-talent, tech-informed hybrid, and according to the Boston Consulting Group, “smart pricing authority” might be the answer they’re looking for.

Take-Aways

  • Smart pricing authority mitigates the drawbacks inherent in past pricing governance systems.
  • Smart pricing authority is a departure from traditional governance systems, so it requires a new vocabulary.
  • The ultimate goal of any pricing strategy is to maximize customer value.

About the Authors

Jeff Robinson and Rodrigo Garcia Escudero work in the Atlanta office of the Boston Consulting Group.

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