Congratulations, you’ve reached the maturity stage where you’re ready to have a formal pricing committee! You’ve studied what a Pricing Committee needs and have your first council on the books. But just like you wouldn’t go into a big game without a plan, don’t start your first pricing committee without a bit of pre-work to set the stage.
While some companies get derailed by trying to have one person be their pricing superhero, others can get bogged down by having too many voices in the room with unclear participation guidelines and contribution lanes. Having the right people in the room, managing attendees’ expectations in advance, and ensuring everyone has a defined role are critical to a productive and thorough meeting.
Here are the key steps to set your committee up for success:
The pricing committee should meet monthly to start, then quarterly after it’s well-established. Start with 60 to 90 minutes meetings. Build an agenda in advance and designate a note keeper to follow up on action items.
Pricing touches nearly every team and part of the company, so naturally, many people will want a say. However, the pricing committee meeting should have at most eight people; think the Amazon two-pizza rule.
While the roles can vary by company, aim for a representative from Product, Sales, Marketing, Finance, Support, and Customer Success to start. Attendees should be decision-makers or close right hands. Each delegate should meet with influencers from their group in advance of the meeting to understand and represent their viewpoint. Try not to have influencers attend unless they need to be there to present data or findings from their team.
Having fewer voices will lead to a more productive meeting.
Assigning responsibilities before the meeting is the best way to manage expectations. Use a RACI matrix so each department can contribute in ways that draw from their experience. Place individual names for each category to set clear expectations for who is involved at each step and how much authority they have. The matrix will focus influencers’ contributions to only the areas where their feedback will be impactful rather than opening up the entire pricing model to a new discussion with each contributor.
Pricing Roles-Responsibilities Matrix
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Decision makers typically sit between Responsible and Consulted, while influencers are usually between Consulted and Informed. You can collapse this into three (or even two categories) to make it simpler to implement.
While each Pricing Committee participant brings a valuable perspective, it’s essential to set the expectation that the pricing leader is the ultimate decision-maker. The leader is responsible for implementing and owning pricing, and it’s up to them to maintain momentum and resolve disagreements.
Pricing is a team sport, but you need a captain.
The Bottom Line
Pricing becomes easier when you have consistent and productive pricing committee meetings. Pricing requires input and buy-in from multiple stakeholders, so setting up your committee properly and having structure is critical to having an interactive pricing function that helps your organization maximize ARR and reach the goals on your roadmap. Make your pricing committee the meeting people look forward to; no one likes an awkward party.