Impact Pricing

This one is the 10 of Clubs from the Impact Pricing card deck.

Face it, when you talk to a customer, what you really want to ask them is, "how much would you pay for them?" The problem is they won't answer that question.

First, they probably don't know the answer to that question. But more importantly, in the back of their mind, they're thinking, Hey, I can't tell them the truth because if I tell them it's really valuable to me, they'll end up charging me a higher price. So, I'm going to come up with a number much lower. I'm going to game the system, or play a negotiation game without them even knowing I'm playing.

Of course, that hurts us because we're trying to gather real information, how much would they pay?

One question I found that works relatively well, I wouldn't call it scientific, but it's a great way to get just a perception of people's pricing. And that is, "how much do you think other people like you would pay for this?"

It takes enough indirection in the question that they tend not to think about gaming the system. And instead they think, "Oh, well, that person over there is probably like me, so therefore they would probably pay this much." When you ask that question, what the buyer's thinking in their mind is, how much would I really pay, and that's how much I think other people would really pay.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script.

If you have any questions or feedback, please email me, [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 designed to help companies create and capture value.

In this episode, Steven discusses the growing significance of showcasing economic value to customers and the challenges that companies encounter in accomplishing this, particularly with regard to AI monetization. There is a strong emphasis on the necessity for better understanding and communication of the value delivered by SaaS products to enable more effective value-based SaaS pricing strategies.

Why you have to check out today's podcast:

• Look into the latest AI monetization report for 2024 and gain insights into the strategies for monetizing AI
• Find out the key trends in SaaS pricing related to AI for the year 2024
• Discover the compelling reasons why AI is truly revolutionary and why it's crucial to embrace this transformative technology

"Don't panic and cut prices."

- Steven Forth

Topics Covered:

01:37 - How is AI going to significantly influence SaaS and pricing this 2024

03:38 - The impact AI is going to have on most businesses in the interface, functionality, and internal workflow levels

06:59 - What this AI monetization report is all about

09:46 - Looking on the value of the solution more than just the AI tool

11:05 - Why B2B SaaS companies are under increased pressure to justify their prices based on the value delivered to their customers

13:12 - Quantifying and truly delivering value to customers and product management's critical function in understanding value

16:05 - Significant insights on customer success department's role in value quantification

17:02 - Discussion about using SaaS versus obtaining perpetual license

22:38 - Summarizing the three major trends this 2024

24:47 - Expressing optimism that companies adopt better tool sets to assess, track, document, and communicate economic value

25:38 - Steven's impactful advice

Key Takeaways:

"Vast new areas of applications are going to be opened by AI and things that we couldn't do, or were too expensive to do in the past become easy to do and very affordable to do, already are today." - Steven Forth

"If you can demonstrate value, then you have a lot of weapons that you can use against these [larger competitors]." - Steven Forth

"AI is going to be moving rapidly towards monetization, which means it has to be able to demonstrate value." - Steven Forth

"There's an overall pressure to better manage SaaS spending, which is going to lead to pressure on SaaS companies to be able to demonstrate that they are actually delivering value, not just happy users." - Steven Forth

"Cutting prices is not going to solve your problem. That could just increase your churn. There's no guarantee that cutting your prices will reduce your churn." - Steven Forth

"You can't compensate for a lack of value by lowering your price." - Steven Forth

People/Resources Mentioned:

• Open View:https://openviewpartners.com/blog/tagged/research-and-analytics/
• Amazon: https://www.amazon.com
• Google: https://www.google.com/
• IBM: https://www.ibm.com/us-en
• Salesforce: https://www.salesforce.com/ap/?ir=1
• Oracle: https://www.oracle.com/ph/

Connect 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]

This is an Impact Pricing Blog published on December 21, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/why-your-salespeople-dont-sell-value/

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/

This one is the 10 of Diamonds from the Impact Pricing card deck.

Different buyers value our products differently, hence, what that should mean to us is we get to do price segmentation, we could be charging different prices. But from a sales perspective, once we've got a price set and we need to go out and do prospecting and find which customers we want to go sell to, guess which ones are the easiest ones to win? The ones where they perceive the most value from our product.

If somebody is going to use our product and make a million dollars, they care a lot more than someone who's going to use our product and make $10. Can we articulate where's the value of our product, who's going to get the value, and then find those people who really get a ton of value and focus on them. That's where we should be doing our prospecting. That's where we should be doing our marketing. And if we have a list of prospects to go deal with, those are the ones we should be spending our sales effort and energy on.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script.

If you have any questions or feedback, please email me, [email protected].

Now, go make an impact.

Connect with Mark Stiving:

• Email: [email protected]
• LinkedIn: https://www.linkedin.com/in/stiving/

Todd Snelgrove is the Senior Director; Value Advisory at SAP. He is a value advisor who helps companies get paid for the value they create.

In this episode, Todd discusses the fundamental importance of value quantification in pricing and emphasizes the need for a structured process to carry it out effectively.

Why you have to check out today's podcast:

• Discover the importance of prioritizing value over solely relying on the behavioral economics of pricing when it comes to pricing strategies
• Find out the effectiveness of quantifying value over simply offering discounts
• Learn about what constitutes a value conversation

"Have a structured process to quantify customer value. It's not as hard as people think. Even if you're not perfect at it, it's better than nothing."

- Todd Snelgrove

Topics Covered:

01:05 - How Todd got into pricing

02:19 - Quantifying value in B2C

04:13 - The subconscious way of quantifying value

05:38 - Why behavioral economics matter less in B2B

08:05 - The decoy effect in pricing and how some tricks used in B2C doesn't work in B2B

12:16 - Evolving power dynamics in procurement and how salespeople should navigate dealings with procurement in different scenarios

17:31 - Performance guarantee over discount

20:26 - What transpires in a value conversation

22:20 - The telling versus the asking in a value conversation

25:20 - Tod's one piece of best pricing advice

26:18 - Why not many companies quantify value

27:08 - Todd's book: Value First Then Price

29:09 - Tying cost and benefits to a value conversation

Key Takeaways:

"When you talk about value, talk about real dollars. It's okay to list benefits and all these other things. But when you say value, show how that's going to be more profitable." - Todd Snelgrove

"I spend a lot of my time getting procurement to realize that 10% value per year is better than a 10% price cut." - Todd Snelgrove

"Price becomes an issue but only after you've discussed value." - Todd Snelgrove

Resources/People Mentioned:

• Value First then Price by Todd Snelgrove: https://expertsinvalue.com/books
• AstraZeneca: https://www.astrazeneca.com/

Connect with Todd Snelgrove:

• LinkedIn: https://www.linkedin.com/in/toddsnelgrove/
• Email: [email protected]

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: [email protected]

This is an Impact Pricing Blog published on December 14, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/growth-comes-from-value/

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/

This one is the 10 of Hearts from the Impact Pricing card deck.

Besides the alliteration of that meme, the two concepts are crucial. Pricing is possibly the most powerful marketing mix variable you have access to. You must have seen the reports that say, hey, if you could increase price by 1%, that likely increases your profitability by 10% for most companies or an average company.

Well, the only reason somebody is ever going to buy something from you is because they perceive that there's more value to them than it costs them in your price. And so, that means we need to be focused on what's the value to the customer. We need to know, how are they perceiving that value? What is the value that they're willing to exchange or they're thinking about as they exchange their hard earned money to buy your product?

When we think about these two concepts, then pricing and value, they go really hand in hand, very closely related. I know many companies ignore pricing, that you set it and forget it, and they need to think about that more. But even more companies are clueless about value. How is it that your customers perceive value?

You really should be spending more time, more energy, thinking about both of those concepts, pricing and value. And they go really, really well together.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script, obviously.

If you have any questions or feedback, please email me, [email protected].

Now, go make an impact.

Connect with Mark Stiving:

• Email: [email protected]
• LinkedIn: https://www.linkedin.com/in/stiving/

Maciej Wilczyński is a pricing expert and Partner at Valueships, a consultancy boutique specializing in software, cloud, subscription, and digital businesses. He is also a lecturer and faculty at the Wroclaw University of Economics, where he has finished his PhD title in strategic management, writing a thesis about software-as-a-service companies and their pricing capabilities.

He gained consulting experience at McKinsey & Company, where he led the EMEA part of Agile Insights solutions focused on digital marketing and customer insights.

In this episode, Maciej discusses the potential positive impact on your SaaS pricing when considering the removal of grandfathering for customers.

Why you have to check out today's podcast:

• Discover significant insights to expanding your business and boosting your income with SaaS pricing strategies
• Understand the ins and outs of SaaS pricing and gain insights into how companies can effectively gauge the value of their offerings, empowering them to make confident decisions in pricing
• Unlock valuable insights about grandfathering customers and potentially double your income

"Value-based pricing has an ability to at least double your current business."

- Maciej Wilczynski

Topics Covered:

01:33 - Just wasn't cut out for a metal band fame

02:22 - How he got into pricing

04:19 - What Valueships is all about

05:31 - B2B SaaS pricing and what makes it interesting

08:12 - Buying growth with pricing

10:31 - Four major reasons companies don't raise prices

14:20 - Important thoughts on companies grandfathering customers [effect on short-term and long-term]

19:18 - No such thing as lifetime pricing

22:29 - Why pricing is hard and where should you get the motivation to increase price

24:57 - What you should bear in mind when increasing prices: listen to the majority and not to the few complaining minority

29:03 - Connecting your price increase to a customer-centric narrative

30:51 - Maciej's best pricing advice

Key Takeaways:

"You should forget the word forever or lifetime in pricing." - Maciej Wilczyński

"Where should companies look for the courage and energy to do it [pricing] is purely from value exercise." - Maciej Wilczyński

"To really understand the value, run as many case studies as you can, quantified case studies, try calculating the ROI of your service initially internally as an exercise, as a workshop in exercise, and then move and try to do it with your customers to see the power of the product." - Maciej Wilczyński

"Pricing starts from value, but if you're afraid of raising prices, simply look at your churn rates. If they're below four or 3%, you're good to go." - Maciej Wilczyński

People/Resources Mentioned:

• Patrick Campbell: https://www.linkedin.com/in/patrickccampbell
• Zappos: https://www.zappos.com
• Stephan Liozu: https://impactpricing.com/podcast/classic-value-based-pricing-how-to-get-started-and-how-to-succeed-with-stephan-liozu/
• Appsumo: https://appsumo.com
• Netflix: https://www.netflix.com/ph-en/
• Utpal M. Dholakia: https://hbr.org/2021/06/if-youre-going-to-raise-prices-tell-customers-why

Connect with Maciej Wilczyński:

• LinkedIn: https://www.linkedin.com/in/wilczynskim/

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: [email protected]

This is an Impact Pricing Blog published on December 7, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/dont-do-what-sirius-xm-did/

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/

This one is the 10 of Spades from the Impact Pricing card deck.

When we think about what a buyer's decision process is, think about the two decisions they have to make, 'will I' and 'which one'. And it's really important for us to understand which of those decisions were pricing for.

The 'will I' decision simply asks, the buyers asking the question, should I buy something in this product category? That's a budgetary decision. They're really saying, is this problem valuable enough for me to spend money to go solve? When we're thinking about pricing and someone's only making that 'will I' decision, we need to be thinking about, what's the value of solving the problem?

The other decision the buyer might be making is the 'which one' decision. 'Which one' is, okay, I've decided I want to solve this problem. Now, am I going to buy your product or a competitor's product? How am I going to go solve this problem? They're deciding which one. And here, the pricing decision you have to make is what's the price of your product relative to the price of the competitive products. Relative to the price of the alternatives. And of course you must take into account the value of your advantages compared to your competitors.

So, as you're thinking about your pricing decisions, think really hard what's the decision our buyers are making. Are they deciding 'will I'? Will I buy something in this product category? Or are they deciding 'which one'? Which product will I buy?

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. If you have any questions or feedback, please email me, [email protected].

Now, go make an impact.

Connect with Mark Stiving:

• Email: [email protected]
• LinkedIn: https://www.linkedin.com/in/stiving/