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Paying premium prices for premier pricing pros
Experienced pricing professionals are in demand today within retail organizations and are earning more and reporting to higher authority than previously.
The boldest use of dynamic pricing on the web so far is on auction sites like eBay.com. But if what’s happening in stores can be considered a preview, it may be just a matter of time until more flexible pricing from more traditional retailers appears in some form on the web as well. The clue is in a salary survey just released by the Professional Pricing Society, a professional organization that supports corporate mangers charged with making pricing decisions and policies.
The survey reveals that pricing professionals are more experienced, average slightly higher salaries, and hold higher rankings or report to higher levels than just two years ago. And that is an indicator of the higher value retailers and other businesses place on pricing professionals. Newcomers to the profession, defined as those with one year or less on the job, have declined to 11% from 20% of all pricing professionals. The average entry-level salary is up 11% to $59,000 from $53,300 two years ago, while senior pricing executives’ salaries rose 8% to $119,000 today from $110,00 two years ago. And 19% of pricing professionals now report to senior corporate management, more than double the 9% of two years ago.
The higher salaries also reflect the increasing sophistication of pricing technology, including web-based tools. “The change in numbers is being driven by that fact that there are more retail price optimization and markdown optimization tools,” says Eric Mitchell, president of the society. “There is an expectation by companies that pricing professionals will understand the sophisticated pricing platforms that are emerging. You’re seeing a shift away from filling positions with people who are price administrators or who come from a store buyer background toward MBAs who understand pricing tools. The shift is toward a more skilled individual who can talk to the CIO or CTO intelligently.”
About 15% of the society’s membership are retail-pricing professionals, and they constituted 18% of survey respondents. With the exception of auctions, retailers have been cautions about pushing the envelope with widespread price flexibility on web sites based on rapidly changing supply and demand. At the same time, retail analysts are saying that more strategic pricing is one of the best places for retailers to look for better margins, and retailers placing a premium on professionals who can get them there. The average salary of retail pricing professionals was $79,000, significantly higher than the $73,000 average salary of all pricing professionals, a group that includes technology, industrial services and other sectors. “Pricing is becoming a critical function as companies use pricing as a strategic lever to capture value and drive demand and bottom line profitability,” Mitchell says.