Intellaprice’s Five D’s of Pricing is a framework we use to help clients determine their approach to pricing. We came up with it in after realizing that some clients had a certain deer-in-the-headlights quality about them when tasked with pricing initiatives.
In one of my former companies, colleagues would often declare, “We can’t talk about pricing.” Sometimes it was tongue-in-cheek, but it was commonly invoked in our franchised restaurant system. In that environment, mandating prices constitutes price-fixing, which is illegal. But the reality is that we could talk about pricing, as long as it was to share analysis, or to make recommendations, and explain the thinking behind these. “We can’t talk about pricing” was just a way to avoid a controversial topic. So to debunk that myth, I used a simple disclaimer at the beginning of every pricing presentation that I made. This clarified what we were doing, and what we could not do, and paved the way for a substantive discussion.
And that’s why the first D is debunk – once you do away with the myths, you can proceed with your work. If you aren’t sure what myths exist in your company, just look for any preconceived notions and try to understand if these assumptions are really true. They could be statements like “we can’t. . . ” or “we have to. . . ” or they could be rules about which departments own certain duties. Or they could simply be misunderstandings about the pricing process or the pricing structure.
If you identify pricing myths, think about ways to set the record straight so you can focus on the business at hand. Then you can move on to other D’s in the framework.