By Julian Short, Accenture

A pricing function focused on managing in a downturn is fraught with risk. At best, a company could miss the potential short-term gains offered by an improvement in the economy, and at worst it could damage the long-term price positioning of the overall enterprise. With companies clearly beginning to position themselves for an upturn, now is the time for executives to be sure that their business has the right pricing strategy and execution capabilities.

As companies prepare for an upturn, we see actions in the following areas as key:

• Ensure that your pricing strategy can accommodate a “multi-speed economy”. In an upturn, geographic, product and customer segments recover at different speeds. Companies need to employ micro-segmentation techniques coupled with differentiated pricing strategies to operate in this environment. Micro-segments should be continually re-analyzed and migrated across strategies as required during the recovery.

• Strengthen your analytical capabilities to support better pricing performance measurement and segmentation. A comprehensive set of analytical reports and KPIs is the basis for any pricing capability; especially if the performance of individual micro-segments are to be monitored and results utilized in strategy and execution.

• Increase the efficiency and accuracy of price setting, execution and control. As the recovery takes hold, prices may change rapidly for a specific micro-segment. Companies should utilize standardized price-setting models and processes mapped to the segmented strategies, enabling transparency, control and efficiency in the process. Differentiated price targets and floors should be utilized during sales negotiations, coupled with a clear price policy document to enforce segment-based rules.

• Integrate and automate pricing technology and data to improve decision making and efficiency. As the pricing environment becomes more complex, pricing technology is increasingly critical to driving effective execution. Leading-edge pricing applications provide the required insight and automate rote pricing tasks, freeing skilled pricing resource up to focus on the more complex processes and exceptions.

• Improve the skills and performance of the pricing organization. Processes, policies, technology and data all play key roles in effective pricing, but the human element is the most critical. Several areas will enhance the overall performance of the pricing organization including: revising and documenting clear pricing roles, authorities and accompanying training for the organization; developing an effective performance management system based on the chosen pricing strategies; and exploring ways to bolster the pricing team through selective hiring.

Optimizing pricing can be challenging even during the best of times, but it is particularly difficult during uncertain economic conditions. By creating a robust pricing capability that leverages leading practices and technologies, companies can effectively capitalize on emerging growth opportunities and, as the economy recovers, position themselves for high performance over the long term.

Julian W. Short leads the Accenture Price & Profit Optimization practice across Europe, Africa and Latin America. Mr. Short works across multiple industries to help companies shape and deliver their pricing strategy. He is based in London. Learn more at Accenture.

By Jacki Johnson, The Buzz Insurance

The launch of a total online insurance business within the Insurance Australia Group was about a fundamentally different business model, enabled by a variety of technologies, with the internet as the main customer interface. In the journey to launch, we discovered some insights about customer behaviour and desires that helped us shape the new online insurance experience.

In 2008, we engaged insurance consumers in face-to-face and online insight sessions on myinsuranceideas.com.au. Our target customers made it clear they wanted to control their price and product features and stressed the need for transparency in price, coverage and fairness. They were very aware that a low price may mean a lack of product features or/and a high excess.

Increased access shapes consumer attitude. For the first time, we are seeing a significant increase in the number of consumer “switchers” based on policy/service than price. Research show s many online transactors are providing comment or seeking advice from other consumers on line through social networks such as blogs, Facebook or Twitter.

Activist baby boomers are now marching online in Insurance too. The online transactors driving the success of internet businesses such as eBay and Amazon are the tech savvy mid to high socio-economic group who are 25-54 years old. It’s also this group who want to influence the service and product offerings. They truly are the activist baby boomers!

General mistrust of the financial sector has led customers to automatically look for the catch. So in creating The Buzz, we built features the customers asked for while ensuring there was ‘no catch’. Our product allows customers to select their own options and choose their agreed value and basic excess – about 20% of our customers are taking up these options.

Customers are also annoyed that the ‘entry’ price is not what they get when they renew. We make sure we price risk appropriately with little volatility. Renewal and loyalty is important. We need to be competitive while basing price on risk rather than policy growth.

The initiative to have live chat and not click to call came at the request of consumers. We provide full online claims lodgement but we offer phone support too. For many small claims like a chipped windscreen, customers want very fast, responsive service – they do not want to wait on the phone. Ironically the most common question has been where the company is based with customers expressing the desire to deal with an Australian company.

Jacki Johnson is the Chief Executive Officer of The Buzz Insurance, the leading online insurance company in Australia. The Buzz Insurance is owned by Insurance Australia Group which underwrites $8 billion of premium per annum and operates in Australia, New Zealand, the United Kingdom and Asia.

By Viky Cooke, Chime Communications

Trust in the voice of authority is fading as consumers increasingly put their faith in each other. Messages from businesses, politicians and tabloid newspapers are being listened to with scepticism.

The economic crisis has caused a seismic shift in attitude. Consumers are now entering what the company calls the “age of emotional proximity”, where peer recommendations surpass all other marketing.

We have moved on from a place where we automatically respected our elders and betters to one where we trust friends and family first and foremost. The shift from deference (people accepting what they are told) to reference (asking advice from peers) has been developing since 2002 according to our quantitative surveys.

This has moved on again and accelerated as the Internet has grown. The unravelling of financial institutions has resulted in a wider loss of confidence, not just of the City but of other businesses too. The majority of the public (73%) and opinion leaders (85%) agree that “bad management in a variety of business areas has increased mistrust”.

Celebrity promotions

It appears we are not even buying into celebrity endorsements any more. While stars are still rated as more trustworthy sources of information than “leaders”, the glut of reality TV “stars” that have invaded viewers’ screens has lowered opinions of celebrities.

Some retailers such as Marks & Spencer in the UK have now moved away from big names fronting ad campaigns. The UK retailer is scaling back its use of celebrities in advertising campaigns in favour of a greater emphasis on promotional discounts.

People have become much more sophisticated in the way they think about celebrity endorsements, and brands need to think carefully before signing up a star name.

Brands should focus instead on the trend of peer-to-peer “proximity” to get their messages across. eBay, Amazon and TripAdvisor promote through recommendations to give you a sense that you are hearing from people like you.

Extended trust networks

Consumers are still putting most of their trust in the opinions of their friends and family, but they also put faith in friends of friends and family, whom they consider to be “people like us”. Even opinions on forums and social networks are seen as trusted sources of information.

This trend has been accelerated by the rapid growth of the Internet and increasing popularity of social networking. Consumers want to know that opinions are honest and not just marketing spin and a vested interest in the outcome.”

Familiar household names are ideally positioned to capitalise on trust by combining with reliability. If a product has been around for a long time, it becomes “like a friend” and has a reputation for meeting consumers’ needs even in a tough economic climate.

Familiar face

But this doesn’t mean that newer brands have to sit back and patiently wait for trust to build. Google is incredibly clever because it feels like it is your friend. It’s such an easy way of getting information. People’s perceptions are that it is accurate and transparent.

Now is the time to get out there and be a part of people’s lives and empathise with them.

Viki Cooke, is joint CEO at Opinion Leader and a Member of the Executive Team at Chime Communications, a leading global communication group located in London, UK.

By Hervé Kabla

What makes top executives like Georges Colony at Forrester, Bill Marriott at Marriott Hotels, Lucien Fa at Yoplait, or Françoise Gris at Manpower so similar? It’s not a question of language, nor sex, nor age, nor even industry. No, the common point between all those CEOs is much simpler: they all started a blog in the last 3 years.

When I say started a blog, I really mean a blog. A blog? Yes, those stupid little websites that kids worldwide have adopted in order to share, exchange and test new ideas.

But politicians like Mr Obama and Mr Sarkozy have long understood what benefits they can drive from these “kid’s” platforms. A corporate blog or a CEO blog is a valuable communication tool you can use whenever you need to emphasize specific topics, and can have a great impact on your business.

Why some C-Level managers at your company should start their blog right away:

1-Spend more time with customers. Managing your company requires strong agenda management, no matter your company size: meetings, phone calls, flights.  You rarely have the opportunity to develop a real discussion with customers. A blog will offer you an asynchronous way to reach them – and them to reach you. Don’t worry about the topics, they’ll naturally find their way to your mind: customers know what to ask – and when.

2. Enhance your online brand reputation. The web is the place where people look for information. People generally don’t know how to determine the most valuable voice out there. Why not add your own messages to the discussion? Your authenticity and your position will give your voice a tonality no other writer will ever reach, no matter what your level of writing skills may be.

3. Get high visibility for a small investment. Compared to traditional media, blogs are really, really cheap to start, maintain and develop. Yet, you’ll have to dedicate a small amount of time – one hour or two every week – in order to find the appropriate message to deliver to your customers, employees, analysts, competitors or partners. You can write these messages yourself, or rely on corporate blogging agencies to help. That’s it. All the rest (publishing, moderation, answering) can be delegated.

4. Own your communication channel. No one ever knows what the future will bring to your company or your business. The economic downturn, potential health risks, scandals, we don’t want our revenue to stumble on headlines. Depending on the crisis phase, you’ll easily find the appropriate tone: soft or passionate when you have to entice readers, strong or even tough when you need to defend your positions.

5. Learning by doing You can’t understand Social media (Twitter, Facebook, or blogging) by reading an article in a magazine or a report from your Chief Marketing Officer. Sure, they can tell you what they are, but you won’t be able to truly understand how they could change your business unless you actually use them.

Hervé Kabla is the CEO of BlogAngels, a leading corporate blogging agency located in Paris, France.