Note: We had some technical difficulties during this show due to the State Wide Fiber Optic Network outage in Arizona, where Voice America is located. Thus, we go to the first break very soon, and the sound quality isn’t very good since we were on mobile phones. Sorry for the inconvenience.
Ed and I were honored to interview Kevin Mitchell, president of Professional Pricing Society (PPS), which is the premiere pricing organization in the world.
PPS was founded by Kevin’s father, Eric Mitchell, in 1984. Eric was a pioneer in the pricing field, having worked at Xerox, Intel, and Ford in the 1970s as a pricer, became a consultant in the field, then launched PPS.
Kevin recounted his work experience, including Colgate-Palmolive and General Electric, and how he returned to the family business of PPS in 2007. He has BA degrees in Economics and English from Duke University and an MBA in Marketing from The William E. Simon Graduate School of Business at the University of Rochester. Kevin lives in Atlanta, Georgia, USA and his hobbies include music, cooking, and sports.
He discussed the growth of the pricing field, not only in organizations, but also more women in the field (25% of PPS members are women, and between 30-40% of younger pricers are now women). Pricing has grown within academia as well. It’s much easier now to earn a degree in pricing, including an MBA in pricing at Kevin’s alma mater, University of Rochester.
I asked Kevin if he thought pricing is now a profession, and like Reed Holden, he thinks it is. We discussed how multi-disciplinary pricing is, and Kevin think an effective pricer has to be part artist and part scientist (this is also the view of Robert Cross).
Kevin also gave some of the demographics of PPS’s 5,000 members worldwide: North America comprises approximately 60% of members, with western and northern Europe comprising approximately 18%, 5% from Latin America, 5% Asia Pacific, and the rest from Australia, Africa, Middle East and other regions.
There’s no dominate industry among the memberships. Members come from these various industries:
Heavy goods
Industrial concerns
Hi-tech
Telecom
Retail
Life Sciences
Chemicals
Energy
Ed asked Kevin how organizations make the transition to value pricing, and discussed the 1% Windfall: how a 1% price increase, with no change in demand, can have more impact on profit than any other lever a business can pull, such as increasing efficiency, cutting costs, or even new customers.
Ed then asked Kevin about “charm pricing” (odd-number pricing) and how it applies to small business. Even-numbered pricing does send a signal that this is higher quality, such as Apple’s $17,000 watch. But why does Apple use charm pricing on its other products? Perhaps to convey a best of both worlds: you get Apple’s prestige and you’re also getting a deal.
And finally, Ron asked Kevin which industry he thought were the best pricers. Airlines and hospitality was his answer, along with heavy goods (Caterpillar is known for its pricing competence), and electronics. Robert Cross answered hotels.
We recommend you become a member of Professional Pricing Society, attend their conferences and webinars, and become a Certified Professional Pricer. It’s a fantastic organization, and thank you Kevin for being a guest on The Soul of Enterprise.