Impact Pricing

Jens Hentschel's passion is B2B relationship management and is especially interested in the interaction between the two sides at the negotiation table: buyers and sellers, suppliers and customers, sales and procurement professionals.

In this episode, Jens delves into the role of procurement in guiding the internal stakeholder's buying journey on the supply side, while the sales professional assists in facilitating a value-based negotiation.

Why you have to check out today's podcast:

• Gain a comprehensive understanding of procurement's involvement in the sales process using the direct and indirect spend terminologies
• Recognize the significance of involving procurement at the outset of the negotiation process
• Learn how procurement and sales can create a mutually beneficial scenario in pricing value

"When you get into that situation where you have been put on the spot in that negotiation, don't budge on price." - Jens Hentschel

Topics Covered:

01:16 - How he got into pricing

03:04 - Jens important thoughts about Mark's bad impression of procurement

07:27 - A case where it's all about price [on the procurement side] and not a win-win situation

11:12 - Understanding procurement's role in the sales process using the direct and indirect spent terms

15:00 - Why the need to involve procurement early on in the sales process

17:57 - Identifying the right procurement person and establishing the initial conversation

20:49 - A procurement's participation in the customer's buying journey

22:22 - Discussing the concept of supplies vendors list

25:00 - The role that price play in making it to the vendor's list

27:12 - Jens impactful pricing advice

Key Takeaways:

"What we are trying to preach is, involve them [procurement] right away because 90% of what your customers spend is managed through a procurement process." - Jens Hentschel

"Something that I can only recommend to anybody to do is, interact with them [procurement] early, provide them with value insights that they're not able to gather themselves. That's how you start building that relationship." - Jens Hentschel

"My thinking is, the procurement professional is the enabler of the buying journey of the internal stakeholder. And they can do it best by having a salesperson on the supplies helping them to be that facilitator." - Jens Hentschel

"Where really value is created is where the sales professional on the supply side and the procurement professional on the customer side really work hand in hand to promote a solution." - Jens Hentschel

Resources/ People Mentioned:

• Procter and Gamble: https://en.wikipedia.org/wiki/Procter_%26_Gamble

Connect with Jens Hentschel:

• LinkedIn: https://www.linkedin.com/in/jenshentschel
• Website: https://www.fivis.io/

Connect with Mark Stiving:

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

This is an Impact Pricing Blog published on May 4, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/price-segmentation-by-negotiating/

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 5 of Diamonds from the Selling Value card deck.

We typically give our salespeople some level of discount authority. And the reason we do that is, let's say they walked in, and they asked the factory, or headquarters, 'Hey, could I have a 5% discount?' And we always say yes to that. Then all we've done is slowed down the sales process.

Instead, we give them some level of discount authority. Knowing that, you know, if you come in for 5% or less, I'm going to give it to you anyway. So, you just have permission to go give 5% or less. The problem, of course, is that salespeople typically give the max that they're allowed to give.

There's all these different levers that they could pull. They could sell value, and they can discount price. And discounting price is one of those levers that they're going to pull because it's easy. See how easy it is for me to discount the 5% and it doesn't hit my commission that much. So, it's okay for me to give that 5% discount.

What we want to do as a company is sit back and say, what are the right levels of discount authority? What should I let my salesperson discount to? What should I let my sales managers discount to, my sales directors discount to? There are different levels, and we want them to be incented to discount as little as possible.

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.

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/

Alessandro Monti is a pricing enthusiast and expert on all topics related to monetization, conversion, upselling, digital pricing, price management, and business and pricing history.

In this episode, Alessandro highlights the importance of adopting a monetization-led growth approach for your business and emphasizes the need to start implementing this strategy early on in your business.

Why you have to check out today's podcast:

• Learn to redefine growth in the sense of making it profitable and sustainable
• Discover the importance of a monetization-driven growth strategy for the long-term success and sustainability of your business
• Find the ideal pricing metric for your business to attain optimal product-pricing-market fit and achieve success

"Choosing the appropriate price metric seems to be probably one of these game-changing moments for your businesses."

- Alessandro Monti

Topics Covered:

01:32 - What brought him to pricing and what made him choose SKP

02:43 - Why he believes in supply and demand

06:01 - Delving into the concept of "growth at any cost" and shifting our focus away from it

08:31 - Defining digital industry and turning away from this 'growth at any cost' mentality

09:36 - Redefining growth

12:25 - Challenging the tools and techniques to get to this ultimate growth

14:49 - Deciding between freemium and free trial [and starting monetization-led growth early on in the business]

20:25 - Extracting value to monetize a product and what is true business success

23:03 - Alessandro's best pricing advice that impacts anyone's business

24:05 - Finding the best pricing metric to use

Key Takeaways:

"Let's redefine growth in the sense of let's make profitable business." - Alessandro Monti

"We don't need the free, just for the sake of having free because there is value in having free users. But besides that, I think you need to seek the conversion and the monetization as early as possible." - Alessandro Monti

"It's growth understood as profitability using all of our modern monetization techniques and there's room for alternative content." - Alessandro Monti

People / Resources Mentioned:

• Taylor Swift: https://www.taylorswift.com/

Connect with Alessandro Monti:

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

Connect with Mark Stiving:

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

This is an Impact Pricing Blog published on April 27, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/simplify-your-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/

This one is the 5 of Clubs from the Selling Value card deck.

Most salespeople are paid on commission, and typically that commission is a percentage of the revenue. So, 2% of the revenue, 5% of the revenue, somewhere in that ballpark.

The problem is, that incremental revenue, if I want to grow my revenue by 1%, the salesperson is only going to get 2%, or their commission rate, of the 1%. And it's a really, really tiny number.

However, for the company, that 1% could be a really big number especially if your overall margins are relatively small, because that incremental 1% of revenue is a hundred percent profit. But we don't incentivize our salespeople to get that next 1% very much.

Ideally, what we would do is, we would create a sales incentive structure so that covering costs, maybe they don't make anything, but anything from cost to list price, the amount of commission, the amount of incentive payment they get goes up for the higher the price they get.

I, typically, like to have a target price. I also have a list price and a floor price. And I'll set three different commission rates. Anybody who can sell at list gets a really high commission rate. Anybody who sells at Target or above gets a mid-level commission rate. Anybody who sells above the floor and below the target, it's a really low commission rate.

But the key is, we want to give our salespeople incentives to negotiate for that last 1%.

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, and 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/

Andrew Bailey is a Value Pricing and Price Negotiation Specialist. He is the founder of Commercial Strategy 4. He helps you unleash your pricing power to sell more, more often, and at a higher price to achieve the profits you deserve.

In this episode, Andrew shares his strategy for value-based pricing negotiations to help you achieve the highest possible pricing for your product or service.

Why you have to check out today's podcast:

• Explore how you can present alternative options during negotiations by combining price and value selling strategies
• Discover one great technique for setting the stage and preparing the buyer's mindset for a pricing value conversation
• Uncover a more effective approach to pricing instead of simply relying on discounts

"Improve your prices and just get really good at customer conversations."

- Andrew Bailey

Topics Covered:

01:14 - How he started in pricing

03:40 - Important consideration for negotiation

04:58 - Defining value for clients and questions to ask to understand the value you're delivering

09:21 - Dealing with procurement people versus the pricing committee as you go through value discovery process

12:32 - Key insights on opposing viewpoints between procurement and committee

14:28 - Practicing real-life price negotiations

16:36 - Pricing and value negotiation strategy that people rarely do but should be considered

24:08 - The biggest mistake in pricing negotiations and what should be done instead

27:53 - Andrew's best pricing advice to impact one's business

Key Takeaways:

"Ultimately, your ability to achieve the results that you want in pricing and negotiating is focused around your negotiating strength." - Andrew Bailey

"What I talk to people about is understanding what's really important to customers, what matters to them." - Andrew Bailey

"Don't try to make a whole long list of things that you can do for your clients and customers. It's probably two or three things that's really important to them. Just focus on that. That's a great place to get to." - Andrew Bailey

"We can give some discount and then we agree to it without really thinking about, could we do this differently? Is there a better way, is there more value here than simply that price and that quantity?" - Andrew Bailey

Connect with Andrew Bailey:

• LinkedIn: https://www.linkedin.com/in/pricingmentor/?originalSubdomain=uk
• Email: [email protected]

Connect with Mark Stiving:

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

This is an Impact Pricing Blog published on April 20, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/nobody-cares-about-your-product/

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 5 of Hearts from the Selling Value card deck.

It's true, customers hate price increases. Heck, I get an annual price increase from Intuit for my QuickBooks, and I hate it. But there's nothing I can do about it. I just have to sit around and stew about the fact that I really despise that Intuit raises my price every year.

However, when we blame costs, then people hate us a little bit less.

So, we know as pricing people, as salespeople, we know that our prices really have nothing to do with our costs. But our customers don't really know that, and our customers believe the cost drive pricing. So therefore, if we're going to raise prices, the only real reason customers accept is that our costs went up.

Imagine if Intuit sent me that email every year, and instead of it said, 'Hey, we're raising your price by $8, $10,' whatever it happens to be. Instead they say, 'Hey, our costs have gone up this year. We need to pass that on. We're going to increase your price by $10.' sure, I still dislike it. But I dislike it a little less. It's like they have a reason other than, 'Hey, I want you to pay more so that I can make more money.'

So, think about blaming costs when you increase prices.

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.

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/

Darlene Nordstrom is an accomplished pricing professional with experience in developing and implementing worldwide software pricing and licensing strategies spanning traditional on premise, cloud and software as a service (SaaS) offerings. Broad financial knowledge including revenue recognition, standalone selling price, return on investment, profit and loss statements and various analyses such as profitability, variance, impact, market and competitive analyses.

In this episode, Darlene highlights the crucial role of interdepartmental collaboration in developing a robust pricing strategy. Additionally, she stresses the importance of having a designated pricing specialist to oversee the entire process.

Why you have to check out today's podcast:

• Find out why interdepartmental cooperation makes a successful pricing strategy
• What added value does a pricing person bring to the table with departmental integration notwithstanding
• Learn why you should be discerning when creating short-term and long-term pricing efforts

"Cross-functional collaboration - to me that is key. What's been successful in my 15 plus years of doing pricing is having that cross-functional collaboration where everyone feels like they have a voice." - Darlene Nordstrom

Topics Covered

01:30 - What prompted her to pursue a career in pricing?

02:15 - Pricing as a team effort and a collaborative endeavor

04:49 - How does a collaborative effort in pricing look like in IBM?

05:29 - Discussing the process in reaching a pricing decision

07:18 - Which pricing decisions need this complicated process of decision making?

08:52 - Why the need for a pricing person when there is already a collaboration with other departments?

11:50 - What added value does a pricing team bring to a corporation?

12:52 - Important considerations to think about in terms of creating short and long-term efforts in pricing

15:17 - Partnering with financial folks to do the analytical part of interpreting data and KPIs

17:14 - IBM as a premium price leader doing the competitor-based pricing

18:57 - Talking about the differential value in a competitor-based pricing

20:57 - How hard was it changing a pricing metric for a product and when do you consider changing it?

22:58 - Darlene's pricing advice that could impact one's business

Key Takeaways:

"You don't set your price once and done, you just keep reiterating it. And the pricing team is responsible for providing those meaningful insights." - Darlene Nordstrom

"What you shouldn't do is make short-term decisions that will impact your long-term goals. Being short-sighted and reacting, you don't want to end up in a price war and react because a competitor did something." - Darlene Nordstrom

"You always have to be thinking in terms of that end goal in mind and work backwards, and maybe there are some iterative steps that you could take to get to that end goal. I'd be careful about making some short-term decisions that impact your long-term goals." - Darlene Nordstrom

People / Resources Mentioned:

• IBM: https://www.ibm.com/

Connect with Darlene Nordstrom:

• LinkedIn: https://www.linkedin.com/in/darlene-nordstrom-96ab4220/

Connect with Mark Stiving:

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