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From: Inc. Elon Musk Shows How to Be a Great Boss in 1 Simple Letter
Recently I recorded a Pricing Podcast with the Professional Pricing Society all about the need for executive support for pricing transformation. So I can’t even begin to tell you how happy I was to see Elon Musk’s letter to his employees affirming Tesla’s ‘no negotiation, no discount’ policy.
His message was simple and very clear -- allowing discounting on floor models or vehicles damaged prior to delivery is ok but no other discounting is allowed. PERIOD! He speaks about assigning the appropriate value to the floor models and damaged product via a discount. This is what we at Holden Advisors refer to as aligning price to value.
Mr. Musk also speaks of the importance of Tesla’s integrity in the market and states that when you can not explain a discount to someone that paid full price without being embarrassed then ‘it is not right.’ AMEN! And remember its your own personal integrity on the line too when you can’t explain your pricing to your customers!
In case you do not work for Tesla or another company with such clear pricing guidance from the top, I do have a three-step approach to get started. Who knows? Your company may be the next shining example of pricing clarity and discipline very soon, so let’s get going!
- Start with a quarterly or monthly meeting informing your executive of your metrics, projects and processes. Begin building a rapport with the aim of building trust in your processes to control discounting.
- Ask for permission to test a new price point in the market, try a new process with sales, or create new sales enablement tools. Do this on a limited basis and in a controlled environment to limit risk. Then report back your findings.
- Keep your executive messages simple and to the point. Connect your message, results, and projects to the profitability of the firm. And above all, avoid the temptation to present massive spreadsheets. I’ve seen many a message lost in a room full of executives once the spreadsheet comes out.
For more tips and tricks to gain Executive Alignment for your pricing transformation efforts please listen to the full podcast and please let me know what you think!