Impact Pricing

This is an Impact Pricing Blog published on November 2, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/system-1-and-system-2-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 Jack of Hearts from the Impact Pricing card deck.

If you have the ability to raise your prices and you can still sell the same or just slightly fewer products, you are almost guaranteed to make much more profit. There are many studies out there that show a 1% increase in pricing can yield a 10% improvement in profitability. Now, how does that make sense?

It makes sense because if you assume for a second that you have 10% gross margin on your product. So, I'm going to throw some numbers at you here. Assume that it costs, you're going to sell something for $100. It costs you $90 to make it. So, you have 10% gross margin and you're making $10 in profit on that product, or on that sale.

If you can raise your price 1%, so we go from a 100 to 101, we just raised our profit from 10 to 11. And that's because raising price has zero impact on our costs. Every dollar we make from the price increase goes directly to the bottom line. So, if we went from 100 to 101, we increased price by 1%. We took our profit from 10 to 11. We increased our profit by 10%.

Obviously, that 10% number has everything to do with what's the gross margin of your product at the moment, and that's how you could determine. But price increases go straight to the bottom line without impacting or being affected by our costs. And so, therefore, it's often the single most profitable, most powerful, marketing mix variable any company has.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. If you want to get better at speaking about pricing and value, grab a deck of our cards, pick a card, read the saying, then talk for one to two minutes about what that card says. You'll become a better speaker and expert. And, you can play games.

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/

Finn Helmo Hansen is the CEO and Co-founder of Price Beam and Stratinis, helping businesses use pricing and revenue growth to win.

In this episode, Finn discusses the two companies he founded - Stratinis and Price Beam - and their significant contributions to the field of market research in pricing. He also sheds light on effective pricing optimization strategies.

Why you have to check out today's podcast:

• Find out how Price Beam does market research for optimizing pricing using a cloud-based technology
• Discover what advantages and capabilities conjoint analysis have over other market research techniques
• Learn insights into the pricing optimization frontiers that are on the rise

"It's not about communicating once you've launched the price increase or even the day before, it's a continuous communication. And if you as a pricing team think that you're communicating enough, then double it."

- Finn Hansen

Topics Covered:

01:13 - What paved his route to pricing

02:29 - Is there truth to wine quality equals higher price?

03:24 - What prevent wineries from raising wine price

05:02 - How do these companies he created, Price Beam and Stratinis differ from each other and why he created these two

07:17 - What specifically does each of these companies do?

09:25 - More in-depth discussion of the business structure of each company

11:09 - How does Price Beam and Stratinis relates to or differs from Conjointly [the process of gathering data up to analysis]

13:59 - The way AI [called Tool Plus] works in the whole process of data research and analysis

15:30 - What more can conjoint research method unpack that historical can't?

21:43 - Distilling the concept of shrinkflation

24:56 - Finn's comments on companies increasing prices by way of package machinations

27:37 - The next frontier in price optimization

29:41 - Testing different promotional alternatives

30:47 - Finn's best pricing advice

Key Takeaways:

"The next frontier in price optimization is going to be around promotion optimization, especially in CPG, because there's a lot of money there." - Finn Hansen

"You need to communicate as much as possible, talk about the value." - Finn Hansen

"Communicate about prices all over the year and sell internally." - Finn Hansen

"Pricing communication is key." - Finn Hansen

People/Resources Mentioned:

• Survey Monkey: https://www.surveymonkey.com
• Momentum Now: https://www.themomentum.com/momentum-now
• Conjointly: https://conjointly.com
• Carrefour: https://www.carrefour.com/en/group/stores

Connect with Finn Hansen:

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

Connect with Mark Stiving:

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

This is an Impact Pricing Blog published on October 26, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/the-5-hows/

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 Jack of Spades from the Impact Pricing card deck.

Many companies use cost-plus pricing and that's understandable because it's easy. It guarantees they're going to make a profit for every sale they make. I get it.

When we shift to value-based pricing, we start thinking about what's a buyer willing to pay us. And now, think about what a buyer is willing to pay and that value that they place on our product actually has nothing to do with the cost of us manufacturing it.

In fact, if you're used to buying something, whatever it happens to be. Let's say you're buying your favorite shirt and you buy five of these shirts every single year, and you just love it. And one year the cost of materials goes up. And the manufacturer says, okay, we're going to double our price because our costs went up. You don't really care that the costs went up. What you care about is, do I still want to pay that much? Or do I want to pay twice as much to get the shirt that I really like or not? So you're not thinking, what's the cost?

Now, oftentimes companies use costs to justify price increases. And we do that because our customers often think price is related to costs and it makes them feel a little bit better. It makes it feel like we're not just trying to raise prices and gouge them. But in truth, the value they get, the decision they're making, am I going to buy this product or not, has nothing to do with your costs. And everything to do with how they perceive the value of your product.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. If you want to get better at speaking about pricing and value, grab a deck of our playing cards, pick a card, read the saying, then talk for one to two minutes about what that card says. You'll become a better speaker and expert.

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/

Julie Scanlon is a D&I Leader 2023 (D&I Leaders: dileaders.com). She enables organizations to enhance diversity and inclusion by providing consultancy, bespoke training solutions and interventions. Supporting individuals and organizations with executive coaching, professional development and career change coaching.

In this episode, Julie highlights the challenges women face when it comes to negotiating higher pay, placing them at a disadvantage compared to men. UK studies reveal the significant disparity in earnings between genders. Julie's primary focus is on addressing cultural and structural inequalities, and she offers insights on empowering women to strive for equal treatment.

Why you have to check out today's podcast:

• Understanding the gender pay gap that exists between men and women and the necessary approach to bring about change
• Learn techniques to effectively mentor women entrepreneurs and businesses led by women, while avoiding gender bias
• Find ways to promote the recognition of women's worth and empower them to confidently price their value

"Take the risk and ask for it."

- Julie Scanlon

Topics Covered:

01:44 - What makes her drawn to the topic about women and men entrepreneurs and their attitudes towards pricing

02:50 - Julie's thoughts on Mark's statement that women are less confident than men about their pricing and business

05:48 - What could be the reason for gender pay gap in women if it is not about one's confidence in question here

09:40 - Her thoughts on Mark's comment that the problem is with women not asking for pay in reference to a situation raised by Julie

11:14 - A case of 'who knows and who asks'

12:50 - Understanding why there's a bit of a problem for women getting a no for an answer

14:39 - The best approach to coaching women entrepreneurs and those women running companies

17:07 - Julie's suggested strategies for coaching women and the necessary shift in approach

20:39 - Julie's reply to Mark's question if there is the same study made in the US about the gender pay difference

21:58 - Her reaction to Mark's desire to help women get that 43% raise in pay

23:02 - Julie's best pricing advice

Key Takeaways:

"It is not that we're not asking in the same way that men are, but it might also be that there's different kinds of biases that are going on in the world that mean sometimes we don't get what we ask for." - Julie Scanlon

"It is actually being aware, raising awareness of the potential gender differentials. You are saying here as a kind of person sitting in front of me that you like to treat people equitably. The thing is, the world doesn't do that. So recognizing the world doesn't do that and thinking, okay, what can I do to mitigate against some of that unequal treatment by the world? So that might then help you adapt the way that you coach the individual that's in front of you." - Julie Scanlon

"The 'being coachable' question is absolutely vital regardless of gender. Absolutely, you need to be ready for it and you need to be open to it and not defensive." - Julie Scanlon

People/Resources Mentioned:

• Sky News: https://news.sky.com

• IPSE: https://www.ipse.co.uk

Connect with Julie Scanlon:

• LinkedIn: https://www.linkedin.com/in/dr-julie-scanlon/

Connect with Mark Stiving:

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

This is an Impact Pricing Blog published on October 19, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/we-have-room-for-negotiation/

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 Queen of Clubs from the Impact Pricing card deck.

Value-based pricing is truly a goal or an attitude, but it's never finished because we can't be perfect. We can't read a customer's mind. I define value-based pricing as charge what a customer is willing to pay, but if you can't read a customer's mind, you don't know what that customer is willing to pay.

And in fact, all customers are different. And so, we constantly tweak and test new techniques. We add new price segmentations. We think about different market segments. We test our pricing and price increases with certain customers. So, we're never done with our value-based pricing.

We always want to be thinking about how is it that our customers are getting value from our products? How might they be using it differently? What was the value of the feature capability we just added to them? Value-based pricing is an ongoing process so I truly think of it as an attitude or a goal.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. If you want to get better at speaking about pricing and value, grab a deck of our playing cards, pick a card, read the saying, then talk for one to two minutes about what that card says. You'll become a better speaker and expert. Oh, and you can play card games.

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/

Neil Fitzgerald is an experienced, driven, and accomplished pricing and revenue professional, with a wealth of experience while working for leading, high-profile companies. Proven in exceeding all bottom-line expectations. Experienced in cruise, hotel and vacation rental industries.

In this episode, Neil shares the crucial role of pricing in the travel industry and its impact on the bottom line success. He emphasizes that achieving pricing goals is not solely reliant on AI, highlighting the importance of collaboration and building relationships with other stakeholders in the company.

Why you have to check out today's podcast:

• Explore effective pricing strategies for one-time opportunities in the travel industry to optimize revenue
• Learn to strike a balance between short-term gains and long-term profitability, ensuring your pricing decisions don't compromise future success
• Discover the importance of guiding customers on a journey, expediting their consideration of revenue and pricing management

"Don't assume that everyone else in your business understands what you're doing. So, take the time to listen to other people, and take the time to communicate and collaborate with the other people in your teams and the other stakeholders in your business, and take them on the journey."

- Neil Fitzgerald

Topics Covered:

01:20 - How Neil get into pricing

03:02 - How does pricing for travel differ from any other pricing?

04:51 - The challenge that comes with pricing the travel industry

07:37 - Pricing strategies in other industries that can work best in the travel industry

09:53 - Neil's thoughts on Mark's suggested limited time pricing offer for a cruise ship basing it from Chipotle's food pricing

11:59 - Discussion about one pricing strategy that Disney implemented and had to be discontinued

13:42 - Pricing insights from crowded airport lounges nowadays gleaned from Mark's experience

16:11 - How does he get people sold to the idea of revenue management

18:35 - Talking about AI and pricing algorithms

20:50 - Neil's best pricing advice

Key Takeaways:

"It is interesting in travel, when you do try and do those one-off opportunities to get a higher price point, you've got to be careful that it really, really is exclusive and it isn't so broad because then you can create too much demand." - Neil Fitzgerald

"It's an interesting business case for pricing managers about how Disney built out this fantastic product for the Star Wars hotel, charged thousands of dollars a night, and then has had to close it in a very short time period because they couldn't get the revenues that they were expecting." - Neil Fitzgerald

"I always think when it comes to pricing, even when you're more on the revenue management side and you are looking at your supply and demand patterns, you do have to have an awareness of the overall cost basis as well, because it can be quite easy if you're not careful to overprice." - Neil Fitzgerald

"It's going to be an interesting case about how airlines effectively raise, find ways of charging guests more so that they're reducing the demand without upsetting the most low guests." - Neil Fitzgerald

"We can't produce demand out of thin air and we can't produce higher margins out of thin air. We have to take people on the journey." - Neil Fitzgerald

People/Resources Mentioned:

• Chipotle: https://www.chipotle.com/home
• Virgin Voyages: https://www.virginvoyages.com
• Green Bay Packers: https://www.packers.com

Connect with Neil Fitzgerald:

• LinkedIn: https://www.linkedin.com/in/neil-fitzgerald-55122591/
• 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 October 12, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/lessons-from-amazons-nessie/

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/