Your Costs vs. Your Price Change Decisions with Jon Lucas

Jon Lucas started as an Accounting Manager before working as the Strategic Pricing & Business Development Manager of Cornerstone Building Brands Inc. Jon loves hiking, and he is loving it even better since he moved out of Ohio. In this episode, Jon engages in a discussion with Mark Stiving about making price changes in relation to the importance of value and volatility of costs in the market nowadays.   Why you have to check out today’s podcast: Discover the importance of differentiating your business with the general market when thinking about value and making price changes; Learn how you can manage cost volatility and even add value when deciding on your products’ prices; and Find out why a safe and sound relationship with the sales team is a must when you’re doing pricing   “To experienced pricing managers, structure your department, borrow what everybody else in the organization is doing and have an org chart. Put some procedures around it. It kind of sounds like common sense, but I honestly don't see that happening in pricing in a lot of organizations.” – Jon Lucas   Topics Covered: 01:21 – How Jon got into pricing; Was it about value or cost plus at first? 03:00 – Jon discusses what Cornerstone does; Thinking about value and differentiating oneself in the market 07:19 – How Jon adds value as he manages cost volatility when making prices 11:29 – Rapid cost fluctuations in the industry as an excuse to change prices frequently 12:35 – Jon talks about Cornerstone’s sales cycle 15:35 – How SAS-based programs help Jon and the company in terms of pricing 16:43 – Does Cornerstone change prices weekly? 19:04 – Jon shares what it’s like working with salespeople 21:03 – Jon’s piece of pricing advice for today’s listeners 22:38 – Having more things to do beyond the role in pricing; the resistance to take on pricing projects   Key Takeaways: “When costs move, we know we need to make some kind of pricing move, and it doesn't have to be the same as the cost index. Costs could go up 5%. That doesn't mean we're necessarily going to go up by 5%, because that's where we get the value.” – Jon Lucas “You can kind of use the cost fluctuation as the starting point, then we look at where the value is, and that's where we set our prices.” – Jon Lucas “If you think your competitors are only getting up: if we're making a price decisions every week and they're making price decisions once every six weeks, we've got a much better chance of capturing more margin.” – Jon Lucas “You can put some safeguards around your cost volatility to some degree with the way that you write your contracts. You can kind of do some hedging there. But you're predicting things out in the future, and it's not always going to be perfect. You just got to do the best you can.” – Jon Lucas “You could have the best pricing in the world that you want to charge, but if you can't get it to your customers in a way that works for them, then you're nowhere.” – Jon Lucas   People / Resources Mentioned: Cornerstone Building Brands Inc.: https://www.cornerstonebuildingbrands.com/ Zilliant: https://www.zilliant.com/   Connect with Jon Lucas: LinkedIn: https://www.linkedin.com/in/jon-lucas-84557840/ Email: [email protected]   Connect with Mark Stiving: LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected]