Learn about what predictive analytics is and how it is used by vendors to give them an advantage in pricing.
Purchasing teams are responsible for making critical decisions related to buying goods and services for an organization. These decisions can have a significant impact on the success of the business, both in the short and long term. However, purchasing teams are at a disadvantage because they can fall prey to the cognitive biases associated with the way humans think, known as fast and slow thinking.
In addition, the author provides valuable insight into ways to ensure that your business is getting the best price possible for that valuable, yet often overlooked, company resource.
On “60 Minutes” this week, former heads of a generic drug company and Vizient, a Group Purchasing Organization (GPO), discussed how the healthcare purchasing system involving GPOs is too complicated and too broken. As one of them stated, the system is designed purposefully for a lack of transparency and to create confusion around pricing.
Raymond Augustin is a recognized thought leader specializing in pricing strategy. He has, as the COO of Virtual Procurement Services (VPS), provided guidance to dozens of healthcare organizations and tribal gaming operations on purchase price methodology and analytics.
When the world was less standardized and more of an open market (say before 1861 when John Wanamaker introduced the price tag in Philadelphia), it was the norm for tradespeople to await the buyer’s first offer and then negotiate up. However, the subsequent swing towards an almost unified approach to stated price shifted negotiation power considerably over to the seller.
Should we be seeking a more balanced approach?
Author Raymond Augustin is a recognized thought leader, specializing in pricing strategy. He has an active interest in the research of the psychology of price and pricing motivations.
“Back in 1597 Sir Francis Bacon opined that knowledge itself is power. And with the correct data, analytics, and a framework of key processes, it’s possible to leverage the knowledge of what a market competitive price should be to avoid overspending.”
Author Raymond Augustin is a recognized thought leader, specializing in pricing strategy. He has an active interest in the research of the psychology of price and pricing motivations.
In pricing and sales negotiations, the vast majority of people are haunted by the “ghost of prices past.” This is because the only method for truly determining if a price point is a market competitive price occurs at the transactional level, and this analysis requires real time knowledge of market conditions, product state, margin erosion, M&A activity, and at least 142 other measurable variables. So how can you know for certain that your price is competitive?
Author Raymond Augustin is a recognized thought leader, specializing in pricing strategy. He has an active interest in the research of the psychology of price and pricing motivations.
