Pricing is Transformational Innovation

In 2013, after four intense years, I completed my Ph.D. in Management. My thesis was titled, "Pricing Capabilities and Firm Performance: A Socio-technical Framework for the Adoption of Pricing as a Transformational Innovation." In simpler terms, it's like saying, "A fool with a tool is still a fool." The main takeaway from my research is that pricing transformations should be viewed as major innovations. They don’t just require technical and scientific tools; they need just as much attention on social and behavioral factors.

Pricing transformations are designed to shake things up—how teams work, their routines, and priorities across different functions in an organization. From leadership down to the frontline, everything from quoting and estimating to pricing and selling gets a makeover. 

The People-Tool Balance

During my research, I analyzed data from over 1,800 organizations, combining both qualitative and quantitative methods. What I found was that the top performers, the best in class, weren’t just pouring money into advanced pricing tools and systems. They were equally focused on the softer side of the transformation—the human side. After all, pricing tools don’t run on their own. They’re used by people.

That’s when I dove deeper into socio-technical systems theory. This theory emphasizes the balance between the social (people) and technical (tools) elements in any organization. It suggests that you can’t just focus on one or the other. They’re interdependent, and the way they interact determines overall success. This idea dates back to the 1950s, but it’s still highly relevant today, especially in areas like pricing software implementation. You can’t succeed without blending both the scientific and social aspects of a transformation.

At Zilliant, we take these socio-technical principles to heart. Our approach aligns with "people-first" values, with a strong focus on relationships and partnerships. One thing that sets us apart is our emphasis on customer success—starting with expert support during the design and blueprinting phase of any software deployment. We also believe that change management plays a critical role in system adoption, user satisfaction, and delivering value faster.

Five C’s of Pricing Excellence

Back to my dissertation, I introduced the "Five C" model of transformation, which I explored further in my 2015 book, The Pricing Journey. When rolling out a pricing transformation, especially one that involves a solid technology roadmap, it’s crucial to include these five organizational and behavioral dimensions in the deployment plan. Without them, your transformation is only half-built.

1. Champions: Every successful pricing program starts with strong support from top management. These executive sponsors ensure the program gets the right funding and attention, and that middle managers stay on board throughout the adoption process.
2. Capabilities: You can’t expect a smooth rollout without the right tools and training. Teams need to be fully equipped—whether it’s with new systems, software, or the know-how to use them effectively.
3. Confidence: The people using the pricing software need to feel confident. When internal teams believe in the tools and understand the new pricing principles, they can apply them more effectively with customers.
4. Center-led Design: Pricing programs work best when there’s a specialized team backing them up. Having experts in a pricing center of excellence increases the chances of success, as they provide the support and direction needed to keep things on track.
5. Change Management: No pricing transformation works without solid change management. It’s not just a process, it’s the fuel that drives successful technology deployment, making sure people and teams adapt to the new system smoothly.

Conclusion

By keeping these five dimensions in focus, pricing transformations can run a lot smoother and more effectively. It’s important to remember that 'a fool with a tool is still a fool.' You can have the best technology, but if you don’t pay attention to these 5 Cs, your transformation might stall or fail. These pillars—Champions, Capabilities, Confidence, Center-led Design, and Change Management—can make or break your success.

At Zilliant, we’re here to guide you through it. Feel free to reach out to me at Stephan.liozu@zilliant.com if you want to talk more about the 5C model or have any questions about this blog.