So, you jump in your car, switch on the ignition, put on a blindfold, floor the accelerator and speed through oncoming rush-hour traffic. No surprise, the journey is a short one with potentially catastrophic consequences. Such an outcome is highly predictable; however, today many corporations needlessly approach running their businesses in a similar fashion. The issue, you ask? They can’t use the data they have at their disposal to support business strategies. More often than not it’s about having too much data and not enough ability to see the woods for the trees.

McKinsey Global Institute recently released a research report – Big Data: The next frontier for innovation, competition, and productivity – that raises a number of interesting questions about how today’s corporations can turn their big data into actionable management information and thereby remove the “corporate blindfold.”  Big data examples may well include the fact that for 15 out of 17 industry sectors in the U.S., each company has more data at its disposal than the entire U.S. Library of Congress. The demand for storage to support this explosive big-data growth continues at around 23% year-over-year. Aside from the cost of storing all this information, the deluge presents many challenges. And it also provides significant opportunities to leverage kaizen, or continual improvement, to create and maintain their own competitive advantage.

In a number of industries – from global service-parts, manufacturing, chemicals and travel – many innovative companies are embarking on the pricing kaizen journey. They’re embedding pricing science in their businesses for sustained competitive advantage. Top-performing corporations are moving away from “gut-feel pricing” to a more automated and scientific approach. Behind this move is the need to deal with market volatility, erratic commodity costs, multiple product sets and uncertainty in turbulent markets.

All these variables are changing in real time, leading to businesses handling huge amounts of data as part of their pricing decisions. By using their existing investments in big-data analytics, innovative corporations are unlocking their inner pricing kaizen.  However, many business leaders haven’t yet been exposed to the power that pricing can have on their overall performance, and how optimizing their approaches can increase profitability and sustain corporate performance.

A recent pricing study by Deloitte validated the fact that a simple 1% increase in price performance can potentially boost profits up to 12%.  Such a compelling uplift is surely worth investigation, bearing in mind the information to deliver on the promise of pricing kaizen exists today within big-data repositories.  Our business leaders – the profit hunters – are ideally placed to tear off the corporate blindfold; to accelerate performance and outperform their markets.

The European Pricing Platform – Connecting Pricing People are an independent industry organisation, based in Belgium, dedicated to promoting pricing excellence across Europe. On Oct. 27, PROS served as a key sponsor of the ePP’s Manufacturing PricingFuel Day, along with Deloitte, at an all-day event in Munich.

There was a real buzz of excitement and anticipation as the delegates and sponsors concentrated in the reception area. Delegates travelled from Norway, Sweden, the UK, Germany and Holland. As one told me “pricing is a dark art shrouded in both mystery and confusion.” It seemed the common denominator from a participant perspective was the quest for knowledge and education. Where do you start? What does pricing excellence look like? Is anyone really doing pricing excellence? The delegate anticipation was tangible, with everyone keen to better understand how to become profit hunters through pricing excellence.

Professor Oliver Roll, who has a vast background in pricing, served as host for the day. He is professor for international marketing and price management at the University of Applied Sciences in Osnabruck, Germany.

The keynote presentation was delivered by Wolfgang Krueger who heads marketing at Merck, a multi-billion dollar chemical corporation. With more than 45 years of service with Merck, Wolfgang presented a fascinating insight as to best pricing practices at his company, including overcoming cultural, technology and process challenges when deploying a pricing excellence strategy. His 45-minute presentation seemed to last only five minutes; however, the session reached a fevered pitch when the host requested questions from the delegates. Wolfgang was literally bombarded with questions from the floor. The questions came fast and furious from delegates, many of whom represented Europe’s leading corporations.  As I observed the spirited interactions, the feeling I had was similar to early days of the Internet revolution – the desire, excitement and business necessity to engender change.

There were several additional customer best-practice presentations notably from Novozymes, a Danish bio-tech corporation. Again the fast and furious post-presentation debate with delegates was the highlight. Clearly there was a massive hunger to understand more and learn what pricing excellence means; what it does; and what it could possibly do for a business.

Like all conferences, the real business of the day was conducted over lunch and post-conference drinks. The presenters from Novozymes were holding court with delegates, who literally queued to catch some time and share some of the pricing Kool-Aid magic. Quite telling was the fact that as the afternoon session was starting, the buffet lunch had remained mainly untouched, with delegates deeply engrossed in their pricing conversations.

In closing what was a momentous day, Professor Roll thanked the delegates, the sponsors and most of all the customers for presenting.  In a final comment Professor Roll stated:

“It was really a great day. One of the best conferences that I have ever attended.

The atmosphere and the quality of the speakers were just extraordinary.”

For what was the first ePP event I have attended, I left, impressed, amused, fascinated and positive. Pricing clearly is gaining momentum as a business issue in Europe. The companies that “get pricing” are reaping the benefits.