The Power of Aligning Business and Pricing Strategy Is Overlooked, Underrated

I have been privileged to work over 25 years in the industrial sector. I am passionate about producing and selling things. Being able to walk in a production facility and watch how things are being manufactured is invigorating. The other side of the coin is that I often spend quite a bit of time explaining to leaders in these industrial companies how to connect business and pricing strategies. Many of these leaders are brilliant in production, technology and finance, but often lack strategic acumen across the board. So, we hear comments like “We need to fill the plant,” “Sell volume at all costs,” and “Pricing should be based on cost as it is the only thing we can control.” Every business is different for sure, and in the industrial business, capacity absorption and utilization are key drivers of costs. However, chasing volume and pushing sales teams to fill plants send the wrong signals to the market and can have dire long-term consequences. I vividly remember the CEO of a multi-billion-dollar industrial company constant repeating, “We need to double sales” or “We need to be $6 billion in sales.” Salespeople were running around the market signing deals they should not have taken and destroying value along the way. I was hired to train the marketing and sales to sell on value at that time, and it did not make real sense at all.