Practical Advice: Dealing With Four Pricing ChallengesPractical Advice: Dealing With Four Pricing Challenges

As more people look to sophisticated, strategic, technology-intensive pricing initiatives, here's some advice from a pricing professional. Navdeep Sodhi created pricing strategies for airlines before becoming director of global pricing strategy for tooling manufacturer Kennametal Inc. He sees these challenges:

>> There's an increasing number of software vendors, but few are more than a couple years old. Those that have been around, usually in an industry niche, want to expand, complicating the vendor landscape.

>> It's a major investment--in the $100,000s--that takes buy-in from a range of senior management. The pricing function is fairly new at many companies, and pricing execs aren't final decision makers. "If there's not alignment with different groups, these efforts won't work," Sodhi says.

>> Data needs are significant, so testing quality, capturing it, and interacting with a vendor may take one or two dedicated staffers for a block of time. Some companies might not have that to spare.

>> Word-of-mouth recommendations about vendors or strategies are scarce. Given the sensitivity of pricing issues and fear of antitrust violations, companies are wary of discussing their efforts.

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