Episoder
-
This is an Impact Pricing Blog published on September 5, 2024, turned into an audio podcast so you can listen on the go.
Read Full Article Here: https://impactpricing.com/blog/uncover-hidden-profits-with-our-opportunity-signals-worksheet/
If you have any feedback, definitely send it. You can reach us at [email protected].
Now, go make an impact.
Connect with Mark Stiving:
Email: [email protected] LinkedIn: https://www.linkedin.com/in/stiving/ -
Steven Forth is Ibbaka’s Co-Founder, CEO, and Partner. Ibbaka is a strategic pricing advisory firm. He was CEO of LeveragePoint Innovations Inc., a SaaS business.
In this episode, Steven emphasizes the importance of shaping willingness to pay by understanding and communicating real value to customers. He also highlights the role of AI and context-driven pricing in adapting to customer needs dynamically, stressing that consistent delivery and documentation of promised value are crucial for long-term retention.
Why you have to check out today’s podcast:
Explore the nuances of pricing strategies, distinguishing between perceived, real, and proven value and how each impacts customer retention and willingness to pay. Learn why documenting value delivered to customers can significantly reduce churn, with actionable steps to demonstrate value in B2B sales. Gain insights on Context-Driven Pricing, offering a fresh approach to optimize pricing in real time."You need to make sure that the value you promise in sales is the value that you deliver and that you can document that value. Because if you don't do that, you're going to struggle with renewals."
- Steven Forth
Topics Covered:
02:09 - Why Steven believes that value-based pricing and willingness to pay are distinct, with value coming first shaping willingness to pay
06:19 - How techniques from behavioral economics, like anchoring, actually impact value perception rather than solely increasing willingness to pay
07:12 - Acknowledging Mark's example of using "good-better-best" as a framing strategy but argues that it’s more than just a "trick"
10:40 - Introducing his concept of generative pricing, which leverages generative AI to dynamically adjust product configurations and prices based on each buyer’s context
12:35 - Steven emphasizes the need for a clear value model rather than solely relying on AI-driven willingness-to-pay estimates
14:49 - Highlights how value is not only unique to each customer but also varies over time for the same customer
17:05 - Underscoring that willingness to pay is actively shaped by how a company communicates and delivers value
18:34 - Emphasizes the need for a value model in pricing, contrasting it with software approaches like revenue management that estimate willingness to pay without actively shaping it
20:37 - Explaining why B2B pricing cannot rely on traditional price elasticity curves
21:36 - Steven's best pricing advice
Key Takeaways:
"Willingness to pay is an outcome that you shape. It's not something that is given to you by something outside of your product and how you sell it, and that you play a huge role in defining the context." - Steven Forth
"We want people to pay a fair amount of money. If I can trick someone into paying more than something's valuable, greater than its actual value, and value in this case means the economic return they're going to get, I don't think I've done myself a service in the long term." - Steven Forth
People/Resources Mentioned:
Pros: https://pros.com Pricefx: https://www.pricefx.com Zilliant: https://zilliant.com Vendavo: https://www.vendavo.com Tom Nagle: https://impactpricing.com/podcast/604-insights-into-value-based-pricing-strategies-for-b2b-with-tom-nagle/ Barret Thompson: https://impactpricing.com/?s=barrett+thompson B.F. Skinner: https://en.wikipedia.org/wiki/B._F._SkinnerConnect with Steven Forth:
LinkedIn: https://www.linkedin.com/in/stevenforth/ Email: [email protected]Connect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] -
Manglende episoder?
-
This is an Impact Pricing Blog published on August 29, 2024, turned into an audio podcast so you can listen on the go.
Read Full Article Here: https://impactpricing.com/blog/better-stories-better-pricing/
If you have any feedback, definitely send it. You can reach us at [email protected].
Now, go make an impact.
Connect with Mark Stiving:
Email: [email protected] LinkedIn: https://www.linkedin.com/in/stiving/ -
George Boretos has over 25 years of professional experience in leadership positions in the enterprise software market, a deep understanding of AI technologies, and a successful journey as an entrepreneur launching three startups and raising $9mn in Seed & Series A funding, working with Fortune 500 and other customers worldwide. His most recent endeavor, FutureUP, brings in this experience to help enterprises make data-driven decisions to optimize pricing, improve profitability, and accelerate growth.
In this episode, George shares about using AI for price optimization, particularly in SaaS and manufacturing industries. He explains how his company, FutureUP, helps businesses analyze customer and macroeconomic data to determine optimal pricing strategies, focusing on standardized products. He also discusses AI’s role in predicting pricing for new markets and the importance of taking the first step to review and adjust prices regularly.
Why you have to check out today’s podcast:
Learn how AI is revolutionizing pricing strategies, particularly in SaaS and manufacturing sectors. Gain a deeper understanding of the key differences between pricing in B2B and B2C markets, including negotiation tactics, price variance, and strategic vs. deal-based pricing. Discover practical advice on how to approach pricing in your business, including why regular pricing reviews and value-based pricing can make a big impact."Just start doing something. Even if this something is, okay, reexamine your prices. Not once per two years or per year, examine them every quarter of a year, at least. Not just your cost plus your margin, do something a bit more sophisticated. Ask your customers, for instance, or your partners to establish some other benchmarks and interesting price points."
- George Boretos
Topics Covered:
01:32 - How he got started in pricing and how he initially got into AI before pricing
03:39 - The differences between AI when he started versus today’s advanced tools
05:57 - Describing his AI model and how it integrates various parameters at multiple levels
08:06 - Clarifying the common perception of AI being synonymous with neural networks as a misconception
11:04 - Explaining that for his particular model, the formulas are pre-existing and universal
12:31 - Agreeing that AI today can incorporate both internal company data and external factors
14:07 - What his company FutureUP is built out for
17:42 - How extrapolating data from one country to another can be challenging if the data sample is small
19:10 - Explaining how his company, FutureUP’s model can handle both B2B and B2C markets
20:15 - Key differences between B2B and B2C pricing strategies
22:47 - How price variance is more common in B2B though in B2C there can still be significant price differences between list and actual price
23:35 - What company size does FutureUP typically targets
24:32 - George's best pricing advice
26:18 - Two main reasons companies don't often prioritize or experiment with pricing
27:55 - Why change management is crucial in pricing decisions
Key Takeaways:
"I do believe, and I do agree that the negotiation part and the discounting part is more complex and more interesting and more important for the B2B environment. The list prices are almost irrelevant." - George Boretos
People/Resources Mentioned:
FutureUP: https://www.futureup.io
Connect with George Boretos:
LinkedIn: https://www.linkedin.com/in/georgeboretos/overlay/contact-info/
Connect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] -
This is an Impact Pricing Blog published on August 22, 2024, turned into an audio podcast so you can listen on the go.
Read Full Article Here: https://impactpricing.com/blog/evils-of-behavioral-economics/
If you have any feedback, definitely send it. You can reach us at [email protected].
Now, go make an impact.
Connect with Mark Stiving:
Email: [email protected] LinkedIn: https://www.linkedin.com/in/stiving/ -
Stephen Plume has more than 20 years of success in venture, executive leadership, and consulting. He is a General Partner of an early-stage venture fund since 2019, driving business strategy and coaching executives in the portfolio.
In this episode, Stephen discusses how AI is shifting pricing models from human-based to consumption-based metrics. He emphasizes the importance of identifying the right value metric that resonates with customers encouraging businesses to experiment with pricing to uncover hidden revenue and margin opportunities.
Why you have to check out today’s podcast:
Gain insights into the cutting-edge pricing strategies for AI companies and how these differ from traditional user-based models to get a glimpse of the future of tech pricing. Learn about actionable strategies like identifying the right value metric and conducting low-risk pricing experiments, which can help businesses capture hidden revenue and improve margins. Deep dive into how venture capitalists think about returns, risk, and value, which can benefit entrepreneurs and business owners seeking to understand how to attract investment."There is so much opportunity to learn from low-risk pricing experiments, and people worry so much about their reputation. Get over that feeling, go out and experiment, and learn from it."
- Stephen Plume
Topics Covered:
01:54 - A funny thing about Stephen not related to pricing
02:46 - How he found his way into pricing
04:21 - Reflecting on his first pricing project with Sybase
05:57 - Contrasting enterprise-level pricing with startup pricing, highlighting the complexity of pricing for larger companies
09:12 - The importance of focusing on the Ideal Customer Profile (ICP) for early-stage companies
10:39 - Explaining how companies often face pricing erosion as they grow and introducing the concept of 'layering' and 'fencing'
16:38 - Discussing how companies, like HubSpot and Salesforce, often start by solving a specific problem with a focused solution but later expand by adding numerous features and add-ons
17:27 - Delving into the concept of competitive positioning
21:40 - The importance of delivering significant value to customers to motivate a decision to switch from a competitor or the status quo
25:09 - Sharing insights about pricing for AI companies and broader trends in AI adoption
29:14 - Discussing the concept of pricing metrics in the context of AI and SaaS
30:32 - Stephen's best pricing advice
Key Takeaways:
"When I'm working with early stage companies my drumbeat is, don't worry about anybody else right now, worry about your ideal customer profile. Because they are the ones who, by definition because math is a thing, will pay you more money faster than anyone else." - Stephen Plume
"In the venture world what I tell the early companies I work with is, for someone to take a bet on you, they're expecting venture returns. They need to be getting 10X their money out. That's not just the investors. That's the customers need to be getting 10X their cost out, or they're not going to adopt you." - Stephen Plume
"The advantage of a platform growing to solutions is, if you do it right, your margins improve rather dramatically." - Stephen Plume
People/Resources Mentioned:
Sybase: https://en.wikipedia.org/wiki/Sybase Salesforce: https://www.salesforce.com/ap/?ir=1 Cisco: https://www.cisco.com/#tabs-35d568e0ff-item-194f491212-tab Regis McKenna: https://en.wikipedia.org/wiki/Regis_McKenna Geoffrey Moore: http://geoffreyamoore.com Steve Blank: https://steveblank.com HubSpot: https://www.hubspot.com Zoom: https://zoom.us LinkedIn: https://www.linkedin.com Siebel: https://www.oracle.com/ph/cx/siebel/ Zendesk: https://www.zendesk.com Intercom: https://www.intercom.com Clayton Christensen: https://en.wikipedia.org/wiki/Clayton_ChristensenConnect with Stephen Plume:
LinkedIn: https://www.linkedin.com/in/stephenplume/
Connect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] -
This is an Impact Pricing Blog published on August 15, 2024, turned into an audio podcast so you can listen on the go.
Read Full Article Here: https://impactpricing.com/blog/value-based-pricing-a-simple-definition/
If you have any feedback, definitely send it. You can reach us at [email protected].
Now, go make an impact.
Connect with Mark Stiving:
Email: [email protected] LinkedIn: https://www.linkedin.com/in/stiving/ -
Barrett Thompson is a firm believer that applied advanced math and data science can significantly improve customer lifetime value. For more than 25 years, he has helped Fortune 500 companies improve profitability and grow revenues by delivering science-based, optimized decision models. He has found that relying on the accuracy and objectivity of predictive models to guide daily decisions, rather than more subjective methods, yields superior financial results for B2B companies.
In this episode, Barrett shares AI's role in pricing, how it enhances pricing strategies, identifies trends, and improves pricing decisions. He also highlights the value of understanding customer-specific needs and using data to create more tailored and effective pricing models.
Why you have to check out today’s podcast:
Deep dive into how AI, particularly tools like ChatGPT, can revolutionize pricing strategies, making it more efficient, transparent, and data-driven. Gain valuable advice on how B2B companies can simplify and modernize their pricing processes, avoiding the pitfalls of outdated methods when adopting new pricing systems. Have a clear understanding of how to effectively implement purpose-built pricing tools to enhance profitability and competitiveness."If they undertake an automation of their pricing process into these modern purpose-built pricing tools, they should look very closely and critically at how to simplify their pricing process as they put that onto a superior platform."
- Barrett Thompson
Topics Covered:
01:14 - Touching a bit on the topic of the Boy Scouts program and how it is a valuable tool for character development and citizenship
01:51 - How he found a path into pricing
03:26 - Discussing the qualitative and not just the quantitative aspect to pricing
05:17 - How automated pricing systems can balance efficiency and personalization
09:14 - Explaining how AI holds great potential in generating "smart prices"
11:36 - Reflecting on the rise of generative AI and how AI in general has already influenced pricing systems
13:50 - Exploring the potential of generative AI to enhance negotiation and communication in B2B sales
15:35 - Discussing how understanding a customer's specific use case or application can directly influence pricing decisions
16:33 - Talking about how understanding a customer's specific use case or application can directly influence pricing decisions
17:57 - Highlighting how AI, like ChatGPT, can enhance tools used by pricing professionals by streamlining the process of analyzing pricing data
20:41 - Addressing the "black box" problem in pricing systems and expanding on the idea of using AI to explain its own decisions
24:14 - The importance of deepening the understanding of customer needs, particularly as the push for touchless and self-service channels grows
28:43 - Barrett's best pricing advice
Key Takeaways:
"An important part of setting up any price guidance, price recommendation or price automation system is to ensure that you've identified the factors that were really important in driving price outcomes in the market." - Barrett Thompson
"Pricing becomes a consequence of having agreed on the value and why it matters." - Barrett Thompson
"We gather data to enrich the relationship and define places to add more value to the customer. Yes, the seller should be compensated for fair value, but not to be exploitative." - Barrett Thompson
People/Resources Mentioned:
ChatGPT: https://chatgpt.com
Connect with Barret Thompson:
LinkedIn: https://www.linkedin.com/in/barrettthompson/
Connect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] -
This is an Impact Pricing Blog published on August 8, 2024, turned into an audio podcast so you can listen on the go.
Read Full Article Here: https://impactpricing.com/blog/value-is-created-twice/
If you have any feedback, definitely send it. You can reach us at [email protected].
Now, go make an impact.
Connect with Mark Stiving:
Email: [email protected] LinkedIn: https://www.linkedin.com/in/stiving/ -
Claire Wang helps startup founders and solopreneurs pick a pricing model that ensures their long-term success.
In this episode, Claire shares her journey of transitioning into her own consulting practice after her corporate job. She talks on the misconceptions about pricing, how people mistakenly equate pricing with just setting a price point when it's all about understanding customer value. She emphasizes the importance of integrating pricing early on in product development, not as an afterthought. She also highlights the need for pricing professionals to be more visible and vocal about the value they bring, as many people don't understand the full scope of their work.
Why you have to check out today’s podcast:
Discover the common misconception that pricing is just about setting a number and uncover how it is deeply intertwined with customer value and business strategy. Gain insights on what’s missing in the pricing industry and how professionals can elevate the value of their role. Learn how pricing should be integrated into product design and customer understanding aligning business goals with customer satisfaction."Understand your customers, understand their needs. And once you do that, then you'll have a better understanding about their willingness to pay."
- Claire Wang
Topics Covered:
01:34 - How she found herself in pricing
02:12 - Pricing as it relates to actuary
03:57 - Explaining the cost-plus pricing in the world of insurance
06:57 - Discussing about price sensitivity and willingness to pay with regard to insurance
08:09 - Reason behind starting her consulting firm
10:02 - The misconception about pricing and what it truly is
14:46 - How success of pricing strategies often depends on how integrated pricing is within a company's overall operations
16:49 - Pricing being more than just setting a number
18:20 - Claire making her point that pricing should not be viewed as a zero-sum game
23:45 - Sharing her thoughts on building visibility for pricing professionals to raise awareness about the pricing profession
25:56 - Gauging perceived value of pricing professionals based on their visibility and content
27:34 - Claire's best pricing advice
Key Takeaways:
"Most people have no clue what pricing really is. They equate pricing with setting a price point, which is completely untrue." - Claire Wang
"Pricing, fundamentally, is all about value." - Claire Wang
"Pricing has got nothing to do with the price point. You really need to go through the whole funnel. And once you've done that, then the price point is just a byproduct." - Claire Wang
People/Resources Mentioned:
Allstate Insurance: https://www.allstate.com Telstra: https://www.telstra.com.auConnect with Claire Wang:
LinkedIn: https://www.linkedin.com/in/claire-wang/
Connect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] -
This is an Impact Pricing Blog published on August 1, 2024, turned into an audio podcast so you can listen on the go.
Read Full Article Here: https://impactpricing.com/blog/southwest-airlines-new-seating-strategy-a-billion-dollar-decision/
If you have any feedback, definitely send it. You can reach us at [email protected].
Now, go make an impact.
Connect with Mark Stiving:
Email: [email protected] LinkedIn: https://www.linkedin.com/in/stiving/ -
With over six years of experience as a leader in marketing operations, Nathan Yeung helps mid-market businesses build, enhance, or support their marketing functions and drive value creation. As the Vice President, CMO Services at Find Your Audience Marketing Partner, he leads teams of marketing managers, graphic designers, media buyers, coordinators, and freelancers to develop and implement marketing strategies for organizations across various industries.
In this episode, Nathan shares how empathy is crucial for understanding and communicating value, which directly influences pricing and client trust. He emphasized that many web pages fail because they attempt to appeal to everyone rather than focus on a specific audience and problem. Additionally, he advised against charging too little, suggesting that higher rates can be justified when trust is established, and recommends offering multiple pricing options to highlight the value of the primary choice.
Why you have to check out today’s podcast:
Learn to understand and address your customers' pain points to significantly impact your pricing strategy and boost trust, leading to higher revenue. Find out why many web pages fail to convert and get actionable advice on how to create focused, empathetic web content that resonates with your target audience. Explore how trust plays a crucial role in client relationships and how it can influence pricing decisions, helping you secure higher-value contracts."Never give a single price. Think about creative ways to give at least three and make your obvious choice your bottom line."
- Nathan Yeung
Topics Covered:
01:07 - Talking about his disciplined approach to health
02:01 - How he got into pricing and his perspectives on pricing
03:53 - Discussing his approach to helping B2B companies "discover revenue"
06:22 - The reactions and learning opportunities that come when a client quickly accepts a price offer
07:48 - The importance of truly understanding and communicating value when helping businesses discover revenue
11:17 - Value creation in B2B and B2C contexts
14:03 - Expanding on the concept of having marketing take on internal communications
15:08 - Two key issues why web pages fail and bringing in additional point about the "curse of knowledge"
18:22 - Discusses the concept of pricing and positioning in business
22:22 - Trust and how it relates to pricing and business growth
23:04 - Talking about his book, 'The Lazy Consumer', and discussing the concept of trust
24:49 - Elaborating on the importance of empathy in sales and how it can trigger a response from customers
25:53 - Underscoring the crucial link between trust and pricing
27:20 - Nathan's best pricing advice
Key Takeaways:
"When you forget about that [people are human], you get a lot of people locked into this state of logical thinking. And when you're too logical, it's hard to generate a lot of value. Because when they're logical, they're being highly critical." - Nathan Yeung
"Understanding your ideal customer profile and really understanding their true pain points and where they are in a business, you can understand value." - Nathan Yeung
"Value makes you really be empathetic, and you really have to understand what is valuable to your customer." - Nathan Yeung
"Just because there's a quantifiable change that is valuable, that does not necessarily mean that person values that the most." - Nathan Yeung
"HR is great for compliance and process and all that kind of lovely stuff, but they're really not great marketers." - Nathan Yeung
"This idea of building culture, while it's important for HR to take care of that and be the accountable part of that, the reality is that marketers are likely the more important person to actually bring that message to market, which is the company in itself." - Nathan Yeung
Connect with Nathan Yeung:
LinkedIn: https://www.linkedin.com/in/yeungnathan/ Website: https://www.findyouraudience.online/Connect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] -
This is an Impact Pricing Blog published on July 25, 2024, turned into an audio podcast so you can listen on the go.
Read Full Article Here: https://impactpricing.com/blog/stop-pre-discounting/
If you have any feedback, definitely send it. You can reach us at [email protected].
Now, go make an impact.
Connect with Mark Stiving:
Email: [email protected] LinkedIn: https://www.linkedin.com/in/stiving/ -
Frank Luby is a writing partner and editor for business books, articles, and corporate communication and co-founder and CEO at Present Tense LLC.
In this episode, Frank emphasizes the importance of clear and effective writing for pricing professionals, offering techniques like the "10-10" and "Rule of 13" methods to structure writing efficiently. He highlights how good writing can influence decision-making within organizations, often reaching and persuading people beyond initial conversations. Additionally, he underscores the value of listening to customers and understanding their real needs, which can significantly enhance pricing strategies and company success.
Why you have to check out today’s podcast:
Discover practical writing tips and actionable strategies to help you organize and improve your writing, making it more persuasive and impactful. Learn how writing plays a crucial role in influencing and shifting thinking within organizations amplifying your message beyond one-on-one conversations. Gain insights on structuring effective communication, prioritizing the right information in your writing and focusing on making a single point effectively."Truly, honestly, listen to customers."
- Frank Luby
Topics Covered:
01:33 - How he got into pricing
03:23 - What's his contribution in Hermann Simon's book on pricing
04:21 - Noting two challenging tasks that makes writing about pricing difficult
05:39 - Acknowledging the complexity of the term "value" in pricing
07:36 - Deciding which narrative perspective to use in writing between blogs and books
09:15 - An effective writing technique to engage readers
10:05 - What his role is at the upcoming PPS (Professional Pricing Society) conference
12:09 - Why a pricing director or manager should care about improving their writing skills, even if they feel confident writing emails
14:10 - How writing can have a greater influence than many people realize
15:46 - Sharing two key writing approaches to help people organize their thoughts effectively
18:50 - Comparing writing to architecture
20:03 - Explaining the "Rule of 13" method as a way to test whether a chapter idea can stand alone
21:21 - The concept of prioritizing writing tasks using the acronym "CSR”.
23:01 - Importance of understanding your audience, especially when trying to shift or replace existing strategies in pricing
25:53 - Introducing the 50/500 rule: Making a single, clear point in writing
27:31 - Frank's best pricing advice.
28:24 - Why businesses often don't listen to their customers, despite it being an obvious necessity
Key Takeaways:
"I often make the analogy to writing an architecture. And you wouldn't want somebody building your house just by having a bunch of bricks and cement and two by fours delivered. You'd like to see a plan, you'd like to see what they're going to design. And it's hard to change things later on. So, that planning part, especially for a book, is immensely important." - Frank Luby
"That's where this 13-method comes in where you can test some of those things that if you can't have those three supporting pieces, or three examples or three ways to elaborate on a particular point, that's your signal right off the bat that that might not carry a chapter." - Frank Luby
"The other hint is prioritizing what you want to write about." - Frank Luby
"We love simplification and we love to have simple answers and simple descriptions, and no segment of customers, or no individual customer, is really that simple. So, we pick up on the things that we can make easy groups out of and we tend to ignore the rest. And sometimes, the rest we're ignoring is really the vital part of the equation." - Frank Luby
People/Resources Mentioned:
Hermann Simon: https://hermannsimon.com Price Management: Strategy, Analysis, Decision, Implementation: https://www.amazon.com/Price-Management-Strategy-Analysis-Implementation/dp/3319994557 Dow Jones: https://www.dowjones.com/about/ David Brooks: https://www.nytimes.com/column/david-brooksConnect with Frank Luby:
LinkedIn: https://www.linkedin.com/in/frank-luby-318220/
Connect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] -
This is an Impact Pricing Blog published on July 18, 2024, turned into an audio podcast so you can listen on the go.
Read Full Article Here: https://impactpricing.com/blog/the-5-ws-of-pricing/
If you have any feedback, definitely send it. You can reach us at [email protected].
Now, go make an impact.
Connect with Mark Stiving:
Email: [email protected] LinkedIn: https://www.linkedin.com/in/stiving/ -
Tim Hanni is a trailblazer in the wine industry, renowned for his groundbreaking work in wine education, sensory sciences, and his mission to demystify wine for all. With the prestigious title of Master of Wine, Hanni holds the distinction of being one of the first Americans to earn this credential, marking a significant milestone in his illustrious career.
In this episode, Tim shares how perceptions of wine quality are influenced more by psychological and sensory factors than by price, often making expensive wines indistinguishable from cheaper ones in blind tastings. He introduces the concept of "perceptual individualism," explaining how personal differences in taste perception affect wine preferences. Additionally, he highlights the complexities of wine pricing, contrasting the traditional cost-plus approach with the need to consider market perceptions and branding.
Why you have to check out today’s podcast:
Gain insights into wine perception and psychology. Discover the challenges of traditional wine wisdom to understand the wine industry's myths and realities. Learn a comprehensive view on wine pricing contrasting cost-plus pricing with value-based pricing to help you gain insights into the factors that influence wine prices, including production costs, marketing, and consumer perception."There are people who buy out on price alone. If it's more expensive, it must be better. But there's an inverse relationship between price and quality."
- Tim Hanni
Topics Covered:
02:01 - Discussing the unique nature of wine pricing and how it affects consumer behavior
04:19 - Talking about the impact of wealthy individuals, particularly those from Silicon Valley, entering the wine industry, which he describes as being over-premiumized
06:22 - Discussing the challenges of market segmentation in the wine industry, comparing it to the evolution of the tech industry
10:22 - Critiquing the wine industry's elitism and rigidity, using examples to illustrate how misleading some widely accepted norms are
12:18 - The background and story of 'Two-Buck Chuck'
13:52 - Addressing the often-debated relationship between wine quality and price
16:30 - Introducing the concept of "perceptual individualism"
20:13 - Elaborating on a wine study conducted by Frédéric Brochet at the University of Bordeaux in 2001
24:32 - How wine pricing is determined, focusing on what he refers to as the "bottom-up approach."
25:48 - Explaining the complexities of wine pricing and how factors beyond production costs influence the final price of a bottle
28:07 - How the complexity of pricing wine remains somewhat elusive
Key Takeaways:
“The label's not going to make necessarily all that much of a difference in the margin, but the label plus the provenance." - Tim Hanni
“Unequivocally, sweet wine drinkers have the most taste buds. They have the highest perceptual acuity of any consumers at all. And often you are paying an extreme premium for that sweet wine.” - Tim Hanni
People/Resources Mentioned:
Julia Child: https://en.wikipedia.org/wiki/Julia_Child Trader Joe's: https://www.traderjoes.com/home Fred Franzia: https://en.wikipedia.org/wiki/Fred_Franzia Charles F. Shaw: https://en.wikipedia.org/wiki/Charles_F._Shaw California State Fair Wine Competition: https://calexpostatefair.com/competitions/california-commercial-wine/ Joel Butler: https://www.linkedin.com/in/joel-butler-mw-1697667/ Frederic Brochet: https://www.researchgate.net/scientific-contributions/Frederic-Brochet-2029425754 California Grape Crush Report: https://www.nass.usda.gov/Statistics_by_State/California/Publications/Specialty_and_Other_Releases/Grapes/Crush/Final/2023/2023_Final_Grape_Crush_Report.pdf Robert Parker: https://www.robertparker.com/about/the-rating-systemConnect with Tim Hanni:
LinkedIn: https://www.linkedin.com/in/timhannimw/ Website: https://winebusinesseducation.com/ Website: https://www.myvinotype.com/en/Connect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] -
This is an Impact Pricing Blog published on July 11, 2024, turned into an audio podcast so you can listen on the go.
Read Full Article Here: https://impactpricing.com/blog/high-prices-and-lost-deals/
If you have any feedback, definitely send it. You can reach us at [email protected].
Now, go make an impact.
Connect with Mark Stiving:
Email: [email protected] LinkedIn: https://www.linkedin.com/in/stiving/ -
Christine Nicholson has a 25-year experience of running companies in multiple sectors. She started, built, and exited multiple successful businesses. She took a business from £0-£4.5m turnover in 15 months. And she also rescued a bankrupt company from millions in debt to an eight-figure exit in under 18 months. More than just experience, she studied hard to become a Chartered Management Accountant with a law degree, a postgraduate degree in Information Systems Management - and a Professionally Accredited and Experienced Business Mentor.
In this episode, Christine shares valuable insights on several key topics related to business valuation and pricing like the owner's emotional attachment, preparing a business for sale and customer feedback for pricing strategies. She provides a balanced view of how to strategically prepare a business for sale, emphasizing the importance of logical pricing decisions and understanding customer value perceptions.
Why you have to check out today’s podcast:
Gain insights on emotional influence in business decisions to help you make more informed, rational decisions that enhance your company's value. Discover actionable tips on how to boost a company's valuation by implementing effective pricing strategies. Learn the importance of customer engagement to understand their perception of value for better pricing decisions."Go and ask your customers what they think of your service. If you were no longer providing this service, what would they be willing to pay for the level of service that they get from someone else?"
- Christine Nicholson
Topics Covered:
01:02 - How did she get involved in pricing
03:20 - Discussing a common misconception among business owners regarding the value of their businesses
03:51 - Highlighting a scenario of the emotional complexities and the challenges business owners face when selling their businesses
12:22 - The psychological dynamics involved when business owners try to value their businesses and their services
14:37 - Explaining the key factors that sophisticated buyers look for when purchasing a company
17:22 - Deeper motivations tied to personal beliefs and values other than price when selling a business
19:40 - How adjusting pricing is one of the quickest and easiest ways to improve a business
22:05 - Christine's approach to helping companies fix their pricing strategies which involves more than simply raising prices
24:07 - Addressing the emotional and logical aspects of business decision-making
25:36 - Christine's best pricing advice
Key Takeaways:
"When you're talking directly to your customers, you have to talk with your heart because you're dealing with one human being typically to another. " - Christine Nicholson
"...if you get your pricing right, then you're going to make more profits; you're going to generate more positive cash flows." - Christine Nicholson
"When it comes to selling your business, all the heart is with the seller, and all the logic is with the buyer." - Christine Nicholson
"When people put their soul into something, they attach a value to it when they're selling their business; ironically, and completely paradoxically, they don't attach the value of the effort that they put into the business to their customers." - Christine Nicholson
"One of the biggest problems that I see from a selling business is where somebody is mentally associating the value of the business by the effort they've put in, but they're not reflecting that correctly in the way that their pricing to their customers." - Christine Nicholson
"You need to believe the value that you are giving to your client." - Christine Nicholson
"Buyers do not want to buy a job. They are buying an investment that has a hard return on capital. And the more certain they are about the return on capital, the higher the money that they will pay and the faster you'll get the cash in your bank." - Christine Nicholson
Connect with Christine Nicholson:
LinkedIn: https://www.linkedin.com/in/christine-nicholson/ Website: https://getexitready.co.uk/Connect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] -
Patrick Taylor is a global business improvement expert with over 30 years of delivered value leveraging experience across all domains of pricing and margin improvement as well as commercial and financial processes.
In this episode, Patrick shares the critical aspects of effective pricing strategies and their impact on business profitability. He emphasizes the importance of understanding both the external market and customer needs when setting prices. He also advocates for the use of various data visualization tools, such as scatterplots and Pareto charts, to analyze pricing effectiveness and identify areas for improvement.
Why you have to check out today’s podcast:
Gain insights into customer-focused pricing and understand market conditions when setting prices to align pricing strategies with customer expectations. Learn about profitability metrics and delve into the significance of monitoring profitability by customer and product. Understand sales team dynamics to empower sales teams with the knowledge and tools needed to confidently sell at set prices."Listen to your customers, look at your market, look externally first on price."
- Patrick Taylor
Topics Covered:
01:14 - Patrick describing his journey into the pricing world
04:01 - Sharing his insights on how pricing has evolved over the years and his fundamental approach to it
07:22 - Emphasizing on the importance of focusing on customer value rather than getting overly caught up in tools like Excel or AI
08:54 - How to motivate executives to focus more on the value they deliver to customers and the decisions those customers have to make
11:58 - Aligning product offerings with customer needs and maximizing revenue opportunities
13:38 - How convincing a CEO to focus on pricing requires demonstrating that there is a real problem
17:34 - Highlighting the importance of using data-driven KPIs and charts to understand pricing behavior and sales performance and important thoughts about price variance
22:09 - What is it about the Pareto chart that he considers it when doing pricing
26:24 - Discussing the importance of focusing on margin dollars over margin percentages, especially when market conditions dictate pricing
29:14 - Patrick's best pricing advice
Key Takeaways:
"At the end of the day, from a pricing perspective, the customer only cares about two things. They care about the value they get relative to what they're buying and relative to the next best competitive alternative." - Patrick Taylor
"Putting that customer first is the number one thing you've got to do." - Patrick Taylor
"You can create the best model in the world, but if it doesn't work easily for your sales team to work, they can't communicate it to their customer; it's a problem." - Patrick Taylor
People/Resources Mentioned:
Tom Nagle: https://impactpricing.com/podcast/604-insights-into-value-based-pricing-strategies-for-b2b-with-tom-nagle/ Alteryx: https://www.alteryx.com Google: https://www.google.com/?client=safari Tableau: https://www.tableau.com Pros: https://pros.comConnect with Patrick Taylor:
LinkedIn: https://www.linkedin.com/in/patrickjtaylor/
Connect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] -
David Brown is the author of "Banned Business Books, Volume 1, Pricing," a fictional account that narrates how a marketer and a pricing guru stand up and optimize the pricing function in a company.
In this episode, David shares what his book 'Banned Business Books' is all about highlighting the "Nine Boxes" framework for organizing and executing pricing strategies effectively. He emphasizes the critical role of a Pricing Council in bringing order and clarity to pricing decisions within a company. Additionally, he highlights the value of understanding customers deeply and segmenting them to optimize pricing and business outcomes.
Why you have to check out today’s podcast:
Deep dive into the nine boxes framework, a comprehensive tool for organizing and executing pricing strategies. Learn the critical importance of understanding your customers as the foundation for effective pricing. Discover how to set up a pricing council and navigate the challenges of pricing in different organizations."Don't start thinking that you're going to figure out pricing by looking at margins; start with the customers."
- David Brown
Topics Covered:
01:34 - Sharing his pricing journey
03:31 - Discussing the role of finance professionals in relation to pricing and how their focus is on defending and improving margins
06:22 - What made him title his book as Banned Business Books
08:51 - Addressing a critique from Mark about the applicability of his book's content
10:26 - Elaborating on the origin and development of his "nine boxes" framework for pricing
14:09 - Discussing how different aspects of pricing, such as packaging and portfolio optimization fit within his "nine boxes" framework
16:02 - How he continues to use the "nine boxes" as a way to organize and prioritize pricing projects, especially when collaborating with a pricing council
18:07 - Sharing his insights on establishing and maintaining an effective pricing council
20:08 - Agreeing that pricing is a critical function and is often a new and somewhat undefined role
21:04 - Proposing the idea of a pricing council to a CEO
23:08 - David's best pricing advice
25:29 - What the Volume 2 of his book series will focus on
Key Takeaways:
"Price setting is critical; that's where you have the opportunity to start claiming the value that you deserve for your innovations." - David Brown
"The main thing that the Pricing Council has to have is energy and a purpose; the ones that do the best have a clear mandate, meaning that the decisions that the council takes on price are carried out and are effective across the company." - David Brown
"You want to speak with the leaders and the potential figures that are going to be in the pricing council first and understand what makes the company tick and what needs to be fixed before you start fixing things." - David Brown
People/Resources Mentioned:
Unilever: https://www.unilever.com.ph Mosaic: https://www.mosaic.com/sustainability American Express: https://www.americanexpress.com Netflix: https://www.netflix.com/ph-en/ Blackberry: https://www.blackberry.com/us/enConnect with David Brown:
LinkedIn: https://www.linkedin.com/in/dbrown14/ Website: www.bannedbusinessbooks.comConnect with Mark Stiving:
LinkedIn: https://www.linkedin.com/in/stiving/ Email: [email protected] - Vis mere
