In this Fireside Chat from Vendavo’s Growth + Profitability Summit 2023 in Stockholm, Chris Kennedy-Sloane, Business Consultant at Vendavo, talks with Niklas Lindström, Pricing Manager at Xylem, about advice for pricers who have to showcase value to the organization, the importance of having the right internal messaging, and current trends impacting pricing and business.
Chris Kennedy-Sloane: Hi, I’m Chris Kennedy-Sloane and I’m here with Niklas Lindström from Xylem at Vendavo’s GPS Summit in beautiful Stockholm. Niklas, you’re going to be one of our panelists on our “Show Me the Money” panel. What advice would you give for a pricer who has to communicate value in their business?
Niklas Lindström: I would say simplicity is the key here, and make everyone understand the message. I think very shortly that that is the core in this case.
Kennedy-Sloane: Keep it sweet, keep it simple.
Lindström: Yeah, I think so, yeah.
Kennedy-Sloane Absolutely, I completely agree. You need to have a message that everyone can understand.
Lindström: Yeah.
Kennedy-Sloane So what’s Xylem’s current largest pricing challenge?
Lindström: Definitely at the moment, the inflation impacts are of course a challenge. And also, at the moment, to have a balance between price and volumes is the key. We see, of course, that to follow the inflation, we need to increase prices. I would say “change prices,” but I mean “increase prices” and and, of course, to find a balance there to avoid losing volumes and especially market shares is the key at the moment.
Kennedy-Sloane: Of course. I think that cost-plus piece loves to sneak back into the pricing strategy, doesn’t it?
Lindström: Yeah, it really does.
Kennedy-Sloane: Particularly in an environment of high inflation like we have right now.
Lindström: Yeah, I mean, we need to compensate inflation. We absolutely do. Everyone understands it, but it is difficult in the markets, of course. I would have another answer if you asked me last year, but now this is my main topic at my desk.
Kennedy-Sloane: So, Niklas, what pricing trends are you seeing impacting your strategies for pricing?
Lindström: We are still the market leader and we are setting the prices, but the last year is where we’ve really seen that competitors are trying to get market shares from us. So, they are really pushing the prices down. So that is one trend that is affecting us. Of course, we see much more cross-border businesses. So we need to be really transparent with the prices. We need to have a more unified pricing strategy on the different markets. Ten years ago, it was really separated markets with separated prices. Now we have more open pricing and then more transparent pricing. So we need to, from a central side, manage that.
Kennedy-Sloane: Absolutely.
Lindström: Also, of course, the internet. I mean, as we have discussed before that prices can be available just with a click on your computer
Kennedy-Sloane: It’s a blessing and a curse for any browser.
Lindström: It is, for sure. So we really need, from a central standpoint, to try to adapt to this.
Kennedy-Sloane: Interesting. Well, thank you, Niklas, so much, for joining us for this Fireside Chat.
Lindström: Thank you.