To be a pricing leader, you must be a value-based business.  Welcome to the Impact Pricing Memecast, where I take one of our daily memes and provide a little bit more insight behind the word.  In general, a company is either a pricing leader or a pricing follower. A pricing leader is someone who looks at the steady-state of pricing and says, we're going to change our prices first. “If you want to be a pricing leader, you really need to be focused on value, not on cost plus.” - Mark Stiving  And typically the rest of the market is going to follow that pricing leader. However, if you want to be a pricing leader, you really need to be focused on value, not on cost plus.  Especially not on competitive pricing. Once you, as a company can focus on value, you have the ability to see that the market is willing to pay more than what you are currently charging. You have the ability to see that your products are highly differentiated from your competitors or that you've got very loyal customers who are going to stay with you. Even if you raise prices above where they are relative to your competition.  When you adopt this concept of truly understanding how customers perceive value, then you have this ability to say, we're going to lead the price change because even if nobody ever follows, we're going to be better off. We understand the way our buyers are making decisions. But the great news is if you're a pricing leader and you choose to increase prices because you know, you can get away. The odds are really good.  Your competition is going to follow anyway, which simply raises industry profits, which also means your profits. So if you want to be a pricing leader, you need to be focused on value.  We hope you enjoyed this podcast. If you see have any questions or feedback please email me mark@impactpricing.com.  Now go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn 

Impact Pricing

Memecast #29: Pricing Leaders are Value-based

For a change, Mark doesn't have a guest for today. Instead, he answers questions he would have liked interviewers to ask him. And part of that is, he highlights some important ideas and insights inside his new book with the title of 'Win Keep Grow: How to Price and Package to Accelerate Your Subscription Business.' Join us in this episode as we get to preview some of the golden nuggets in Mark's newest book.   Why you have to check out today's podcast: Find out the important revenue buckets you must manage in subscriptions, so you maximize revenue Find out the three essential value levers that companies who are running subscriptions should have to manage and think about to arrive at a good pricing decision Discover four ways to grow your customers, so you increase revenue   "One of many things I find fascinating about subscriptions is that many subscription companies have figured out I have to go win customers, and I have to go keep customers. But far too few have figured out, hey, I really should spend time growing customers. And the real reason for that is it's not urgent."  - Mark Stiving   Topics Covered: 01:05 - Why Mark wrote the book 'Win Keep Grow' 02:13 - The three key parts he considered when he wrote the book 03:05 - What he would do if he would rewrite the book and why 04:10 - How traditional businesses differ from subscription type ones 04:42 - Important three value levers that he built into the book 08:56 - Four ways to grow a customer 11:09 - Something fascinating about subscriptions 12:11 - Mark's recommendation to companies   Key Takeaways: "What I found fascinating about these three value levers is they seemed obvious to me as I'm working on subscriptions. And then you step back and say, Well wait, all three of those value levers are crucial for every business, we just don't stop and think about them that way." - Mark Stiving "If we can target a really clear market segment, and we can build a product around that market segment, we can create the right packaging for it; we could have the right pricing metrics for it, then that market segment might have a higher willingness to pay. We'll be able to keep them longer, and we'll be able to grow more revenue from them. So, it just makes a ton of sense for us to be focusing a lot on market segments in our subscription world. But we should be doing that in our traditional business as well." - Mark Stiving "The fact that we're constantly in contact with and helping and delivering value to our current customers gives us the ability to package our products in a way that we can continue to grow our revenue." - Mark Stiving "If we charge for the right things, and our customers use more of our product because we're charging for the usage of our product, they end up paying us more. But what's really important about that is, as our customers use more of our product, they're getting more value. It's okay that they pay us more. It isn't like we're trying to gouge them; we're simply saying to them, hey, as you get more value, you pay us more money. And that seems really reasonable." - Mark Stiving   Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

Win Keep Grow: The Surprising Fundamentals Entrepreneurs Need to Build and Grow a Subscription Business

This is an Impact Pricing Blog published on Sept 8, 2021, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/messaging-a-price-increase/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn 

Blogcast #25: Messaging a Price Increase

The best pricing metrics are highly correlated with users value metrics.  A pricing metric is what do we charge for McDonald's charges for hamburgers? That's a simple pricing metric, PayPal charges a percentage of the revenue that we collect. If we're. That's a pricing metric. There are many different types of pricing metrics, especially in the world of SaaS. We have this ability to choose many, many different possible pricing metrics. We could choose the number of clicks we could choose. The number of leads we could choose, the amount of data that somebody downloads or the number of gigabytes. Someone has access to there's many, many different possible. Pricing metrics. Probably the most common is users. How many users are there or a per seat basis, we get to choose what pricing metric we want to use. And what we want to do is choose a pricing metric that is highly correlated with a value metric and a value metric is how is it that a customer perceives value from the product. “Choose a pricing metric that is highly correlated with a value metric.”- Mark Stiving Now, if you think about Netflix a long, long time ago when they first came out, they put Blockbuster out of business. Well, how did they do that? They did that by changing the pricing metric metric. Blockbuster was charging rentals of a movie by the night plus late fees. If you forgot to return it, Blockbuster changed the entire pricing model. And instead of charging a rental per night, They charged a monthly subscription, which said how many DVDs you were allowed to have at your house at any one point in time. They just changed the pricing metric. And because people love that pricing metrics so much more than they loved paying late fees to blockbuster. Netflix took off. What you want to do is think really hard about how is it that your customers perceive value. And then see if you can find a pricing metric, what is it that we're going to charge for that is highly correlated with how your customers perceive that. PayPal is probably the most perfect example of this possible as a salesperson, as a selling company, I may X except revenue using PayPal. So somebody pays me money using PayPal, and I love getting more money. The more money I make, this is just awesome. This makes me happy. Well, PayPal takes a small percentage of that. Well, I don't like giving PayPal a small percentage of the money I make, but I like making money. I hope someday I pay PayPal a million dollars in a year because that meant I made $50 million. If they're taking 2%, you can see how their pricing metric is highly correlated with how I perceive value. That's what you want to be thinking about your best pricing metrics are highly correlated with users, value metrics.  We hope you enjoyed this podcast. If you see have any questions or feedback please email me mark@impactpricing.com.  Now go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn  

Memecast #28: Pricing Metrics Are Correlated With Value Metrics

With over 20 years of software experience, Ryan Glushkoff provides pricing and product marketing expertise for business-to-business (B2B) software companies. This includes offer packaging, pricing, market research, and pricing strategy and organization. Prior to founding Fraction8, Ryan cut his teeth in both the pre-sales and post-sales world for both mass-marketing and custom-enterprise software companies, which gives him a unique perspective on how SaaS companies need to price and market themselves for success. In this episode, Ryan shares what important data set his qualitative and quantitative interviews and surveys uncover to arrive at a pricing decision.   Why you have to check out today’s podcast: Find out the three types of competitive research you can use to understand your competitors’ offer structure so you come up with the right pricing decision Learn about what different companies are using in their pricing structure Find out what is of utmost reason for putting your price online   “Pricing is a team sport. All of those different groups need to be part of the decision. So, it's incumbent upon the product team to steward the rest of the organization through that decision making process.” - Ryan Glushkoff   Topics Covered: 01:36 - What he does as a B2B technology pricing consultant 03:32 - Doing qualitative interviews and quantitative surveys 04:17 - Aha moments when it comes to clients saying what they claim customers value versus what customers say they value 05:16 - Important data points uncovered with qualitative and quantitative interviews 05:57 - What is competitive research and its different types 07:44 - Times when you consider pricing as part science and part art 08:46 - Going the same pricing metric as the competitor versus charging with better options 09:56 - Sharing his concern about using different pricing metrics 10:38 - Perpetual license of moving to SaaS 11:23 - Touching on usage-based pricing 12:43 - Outcome-based pricing being a version of user-based pricing 13:47 - PayPal and tollbooth pricing 14:41 - Are Lyft and Uber subscription-based companies 15:06 - Price structure of AWS and how it’s different from Uber 18:48 - Regularly buying diet Coke compared to subscription-based 19:37 - What he thinks of putting pricing online 21:42 - When it’s not proper to pricing online 23:28 - His thoughts to a recommendation of putting a price range versus none at all 24:35 - Which way to go -- put price online or not 26:14 - When do companies miss part of their pricing research 26:44 - Where should pricing lives in a company 30:24 - How pricing is screaming for a center of excellence type of approach 31:58 - His best pricing advice that can have a great impact on one’s business 32:27 - Does he actually ask, ‘What are you willing to pay’ 33:33 - Mark’s answer to Ryan’s question on why he asks, ‘What are you willing to pay’   Key Takeaways: “Competitive research is something that is really good to know, but since every company has their own unique value proposition that they bring to market, just copying a competitor, you're probably leaving something on the table by doing that, or you're selling yourself short.” - Ryan Glushkoff “If you'd ask which side of the fence I would come on, or land on for, whether to put your pricing online or not, I would err on the side of putting it online. The idea of maintaining positive control of the sales conversation is paramount. Especially if you do your homework and you're confident in the research that you've done that informs the value of your solution, the price that people are willing to pay.” - Ryan Glushkoff “I really think it [Pricing] should live in the product organization because the product owner is really the CEO of the product; the product team has the deepest understanding of the problems that the buyer and the user are facing. They have the deepest understanding of how to go about solving those problems, through the features and capabilities that the solution is offering.”  - Ryan Glushkoff   People/Resources Mentioned: PayPal: https://www.paypal.com/ph/home Lyft: https://www.lyft.com/ Uber: https://www.uber.com/tw/en/ AWS: https://aws.amazon.com/   Connect with Ryan Glushkoff: LinkedIn: https://www.linkedin.com/in/glushkoff/ Email: glushkoff@gmail.com   Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

How to Make Data-Driven Pricing Decisions for Your Business with Ryan Glushkoff

This is an Impact Pricing Blog published on Sept 1, 2021, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/the-cost-of-win-keep-grow/  If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn 

Blogcast #24: The Cost of Win Keep Grow

There's really only two basic types of value that customers can get. And that's real value and perceived value. Real value is after they've bought the product they're using it. How does it truly impact their life? How does it really make a difference or solve their problems or yield results?  That's real value in the world of B2B. We could think of real value as economic value. How much more money does it make or save the customer? That's real value. However, before somebody buys the product, they don't really know the real value. “Perceived value is the only value that matters in price.” -Mark Stiving In fact, nobody really knows how much value any specific customer is going to be able to get from any specific product. What that means is that before somebody purchases our product, it's all about perceived value. What does a customer believe they're going to get after the fact? What we need to be thinking of in terms of setting prices or communicating value to our marketplace is making sure our buyers maintain the highest level of perceived value possible from our product.  Now I'm a huge proponent of creating products that have real value and then making sure we communicate that value to our customers. So their perceptions are really close to reality.  We hope you enjoyed this podcast. If you see have any questions or feedback please email me mark@impactpricing.com.  Now go make an impact.   Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn  

Memecast #27: Perceived Value is the Only Value that Matters in Price

Jeff Robinson is the CEO at Revolution Pricing LLC and Author of Price for Growth! In this episode, Jeff shares how pricing should be a strategic effort in driving a company's growth. He talks about how pricing executives should think in terms of long-term margin, having growth precedes profit.   Why you have to check out today's podcast: Find out why pricing people should be at the front and center in driving value conversations for strategizing a company's growth Learn how to look at the customers' value long-term and generating profit for life rather than looking out for profit for a year and ruining your long-term profit Discover the two macro goals of pricing so you think of it as a long-term profit-generating engine   "Think about the growth aspect of your business before you think about the profit aspect of your business. Think about the engine of growth before you think about harvesting profits." - Jeff Robinson   Topics Covered: 01:31 - How he started his pricing career 02:34 - Sharing his story of why he stayed with PROS for almost two decades 04:46 - What happens when salespeople have discount authority 06:20 - Different pricing models 07:36 - Are salespeople the best ones to determine pricing strategy? 10:18 - What he thinks of price differentiation 11:53 - Fairness in pricing - what it really means 15:19 - It's almost never really about pricing; it's about value 17:58 - Can pricing people make or add more value as an internal consultant? 20:40 - What he'd like to see happen at the level of Pricing Director 23:06 - Pricing's two different kinds of macro goals 26:14 - What growth strategy should look like 27:40 - Win, keep, grow - what does it refer to 29:42 - Jeff's pricing advice that can greatly impact one's business    Key Takeaways: "Price differentiation is not only fine, I think it's desirable. But I think you got to do it in a way that you can maintain a good customer experience across your customer base." - Jeff Robinson "Customers hate that they're getting priced based on their willingness to agree. If it's not fair, you're going to get a lot of blowbacks. If it is fair, then they'll play along. Look at the airline industry; you have tons of differentiated pricing. But I think most people understand the game; they understand there's some objectivity behind where the pricing is coming from." - Jeff Robinson "Pricing needs to be at the forefront. I think pricing should be integral to the entire growth strategy of the company. And the reason I say that is because I think they have the most data. And I think they theoretically have the capability to understand all these intersections, if that makes sense." - Jeff Robinson "Can pricing people make or add more value as an internal consultant? Yeah, definitely. Because as an internal consultant, they can operate at a level where they can add a lot of value, and they don't have to go into every minute detail. They can go into the level of detail that's needed." - Jeff Robinson "The whole idea is if you think about growth precedes profits, then from a pricing perspective, pricing leadership should be thinking about growth first, and then thinking about profits when the time's right." - Jeff Robinson   People/Resources Mentioned: Price For Growth by Jeff Robinson: https://www.amazon.com/Price-Growth-Revolutionary-Step-Step-ebook/dp/B08Z5YTGTZ   Connect with Jeff Robinson: LinkedIn: https://www.linkedin.com/in/jeffrobinson4/ Email: jeffrobinsontx@gmail.com   Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

The Role of Pricing for Growth and Profit with Jeff Robinson

This is an Impact Pricing Blog published on August 15, 2021, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/failed-to-keep/  If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn 

Blogcast #23: Failed to Keep

Pricing really encompasses almost every department inside your company, because when you think about it, pricing is how do we capture that? And so now it's all about value, what's value to the customer. In fact, what's perceived value to the customer and we can work our way backwards and say salespeople on a one-on-one basis, talking to customers are trying to help each individual customer understand how much value our product might be able to deliver. “Product teams create value. Marketing communicates value. Sales helps buyers understand their specific value. Pricing captures value. Everyone is coordinated.”- Mark Stiving Marketing, on the other hand, looks at a whole bunch of people and says, what's the type of value that most people are looking for. How can I communicate that value? How can I communicate that we're solving problems for those people? And then we take a step back to the product management or product development piece, and they better be building products that provide value to our customers. The only way they can do that is if they actually understand what value means. So in my view, all roads lead back to pricing because pricing understands value, at least the concept of value better than most other departments. However, every other department probably understands the value of any specific product, better than price.   We hope you enjoyed this podcast. If you see have any questions or feedback please email me mark@impactpricing.com.  Now go make an impact.   Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn 

Memecast #26: Everyone is Coordinated

Mike Wilkinson is called 'The Value Selling Expert' and he helps Sales Directors/VPs and sales teams understand customer value and get paid what they're worth. In this episode, Mike shares how you need to get to the generic issues of the business first, document and understand what the company faces so you know how and where to add value, and ultimately defend your pricing.   Why you have to check out today's podcast: Learn how to solve the 'value mystery', so both customer and seller discover how much value there is going to be Find out why salespeople should need to have business acumen, so you understand how your customer's business works and know where to look for value Discover the right approach to the ROI calculator, so you know where you add value   "Don't apologize for your pricing. Be proud of it and look for the value. Don't discount first. Value first. Then think about if you need to discount." - Mike Wilkinson   Topics Covered: 01:59 - Sharing his thoughts on an ROI calculator gap being pointed out 03:33 - What for Mike is 'Value Discovery Conversation" 05:01 - Value is a mystery 06:06 - Why salespeople have to understand what business acumen is 07:02 - How to make value conversations better 09:24 - Big gap between expectation and reality 11:12 - Addressing a 'which one' decision scenario 12:27 - What's the biggest differentiator when there are no other differentiators 15:07 - Talking about ROI of the differentiation 16:19 - What truly is differentiation 17:48 - Talking about the concept of 'generic issues' 20:18 - Salespeople operating on a 'rat-up-a-drain-pipe' selling 22:38 - How to let customers perceive something to be a real priority 24:16 - A great way to build up the perception of pain 25:46 - Mike’s pricing advice that can greatly impact one’s business   Key Takeaways: "I think the value discovery conversation is so much more than just having a chat to establish customer needs. I really think it is about taking the customer on a journey of value discovery, helping them to understand the things that they actually do need, the possibilities, the challenges that they have, what impact those are having on their business." - Mike Wilkinson "If value is a mystery, we need to understand what customers value. We need to solve the value mystery." - Mike Wilkinson "I have to have that business acumen of understanding how the hell does the customer's business work? Where does their income come from? Where do their costs come from? Because if I don't understand either of those, I'm just shooting in the wind." - Mike Wilkinson "What a lot of salespeople forget is that one of the biggest differentiators is themselves. Just the sheer feeling of comfort people get when dealing with somebody that they know, trust, like, respect -- that is still massively valuable. But you have to be able to deliver." - Mike Wilkinson "The thing about differentiation, as I always say, being different isn't differentiation, differentiation is being different in ways that deliver real value to the customer." - Mike Wilkinson "I think thinking about value and thinking about the value that you believe that you can deliver to your customers is hugely important. But you need to take a step back from that in the initial stages of the conversation you're having with your client." - Mike Wilkinson   Connect with Mike Wilkinson: LinkedIn: https://www.linkedin.com/in/mikewilkinson-thevalueexpert/ Email: mw@axiavalue.com   Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/ 

Understanding the 'Value Mystery' and Get Paid of What It’s Worth with Mike Wilkinson

Business in its simplest form is getting paid for providing value to the customer. It may be true that they're going to get the value. It may not be true that they're going to get the value, but they believe they're going to get the value. And what we need to do is make sure we understand what our customers or our buyers are looking for.  What does value mean? “Business, in its simplest form, is getting paid for providing value to the customer.” - Mark Stiving Typically, we could think of this as our buyers have a problem they need to solve, they have a result they're trying to achieve and aspiration thereafter. The only reason that people buy a product from us or from anybody. If they perceive value. If we can help our customers understand what our value is and the more they understand our value. The more likely they are to buy. And in fact, the more likely they are to pay us a higher price.  Because when we think about business, business is really about us giving value to our customers, and in exchange, they give us money. We hope you enjoyed this podcast. If you see have any questions or feedback please email me mark@impactpricing.com.  Now go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn  

Memecast #25: Business is Getting Paid for Value

This is an Impact Pricing Blog published on April 18, 2021, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/pricing-when-costs-go-up/  If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn 

Blogcast #22: Pricing When Costs Go Up

Ayon Bhattacharyya is an experienced business leader with significant success in revenue growth through commercial problem-solving. He is implementing innovative pricing solutions, fact-based analysis, and market research, drawing upon his stakeholder management and influencing skills to gain the support of other senior leaders. In this episode, Ayon shares the need to understand your customers, so you can segment without merging them and you gauge their willingness to pay and set the best pricing.   Why you have to check out today's podcast: Learn about customer segmentation and how to go about defining it to arrive at optimal pricing for a particular segment Find out how customer segmentation helps articulate your value proposition to solve different problems Learn how to categorize your buyers best so you lead with value and not pricing   "Do your research and know your customers. Identify your customer segments and, where feasible, perform price experiments to validate willingness to pay. And don't be afraid to experiment with subsets of your customer base and try to innovate your approach." - Ayon Bhattacharyya   Topics Covered: 01:37 - What sparked his interest in pricing 03:27 - Price fencing in the airline industry 04:50 - Why do airlines have the best price offering for direct customers 05:56 - Reason why airline fare price increases as the plane nears take-off 06:30 - Differentiating between a business traveler and a leisure traveler 07:02 - How could they possibly created fare rules around business and leisure travelers 08:16 - Ayon sharing his thoughts on customer segmentation 09:09 - What are those customer attributes 11:47 - Defining customer segments 13:49 - How to find out who's going to travel for a particular attribute to be met 14:42 - Would it be better to actually differentiate the proposition by having a premium and a cheaper price 15:53 - All about customers' choice of greater or cheaper value 17:58 - Preventing segments from merging 20:25 - Differentiating pricing in UK, Australia, and New Zealand 22:56 - Categorizing buyers 24:21 - People's surprising attitude on getting rich many years ago 26:20 - Reacting to Mark's funny New Zealand experience 26:56 - Ayon's pricing advice that would greatly impact one's business 27:54 - Why be careful in lifting anchor when experimenting with your market   Key Takeaways: "It's all about choice at the end of the day. The customer gets to choose a greater value or less value, and they pay the price based on value." - Ayon Bhattacharyya "The best way to counter this is differentiating your value proposition. If you're solving different problems, then you're able to customize that value proposition to the segment, and that helps to mitigate that risk of segments merging." - Ayon Bhattacharyya "One of the guests on your podcast has referred to the importance of not leading with price, and I absolutely 100% stand by that. Always lead with value." - Ayon Bhattacharyya "There is a fear often around raising prices. But if you're able to support that with additional value, then usually your customers are quite receptive to that." - Ayon Bhattacharyya   Resources/People Mentioned: Westpac Negotiating with Backbone: Eight Sales Strategies to Defend Your Price by Reed Holden   Connect with Ayon Bhattacharyya: LinkedIn: https://www.linkedin.com/in/ayon-bhattacharyya-a84ba615/# Website: https://bizgrowthspurt.com/   Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

How to Effectively Implement Price Segmentation Strategies with Ayon Bhattacharyya

This is an Impact Pricing Blog published on April 11, 2021, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/price-moves-during-market-shocks/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn 

Blogcast #21: Price Moves During Market Shocks

The Impact Pricing Podcast will help you win more business at higher prices by teaching you about pricing and value. Once you understand how your buyers perceive the value of your product, you can build, market and sell products that win at higher prices. Pricing is really about creating, communicating and capturing value.

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Impact Pricing

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