Impact Pricing

This one is the King of Spades from the Selling Value card deck.

It's true, value-based pricing is the most profitable pricing strategy you can adopt. If you think about it, the definition of value-based pricing is charge what your customers are willing to pay. Now, that seems pretty simple, but if you knew exactly how much your customers were willing to pay, and you charged that amount, then you can't possibly make more money.

If you charge less than that amount, you end up leaving money on the table. If you charge more than that amount, your buyer doesn't buy.

So, by definition, value-based pricing is the most profitable pricing strategy you can adopt. However, it's impossible to do perfectly because there's no way that you know how much somebody is willing to pay for your product. We can't read our customer's minds.

What we can do though, is adopt this as a strategy, an attitude, a goal, and continue to do things so that we can learn more and more about our markets and our customer's willingness to pay and get to the point where we're capturing more of it each time.

We hope you enjoyed this memecast. This is also an example of how Pricing Table Topics works. Grab a deck of our cards, pull a random card, read the saying, and then talk for one to two minutes about what that card says. This will improve your understanding and more importantly, your ability to communicate important concepts about value.

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/

Dinaz Zaq is the Director at Revenue Pricing Consultants in London, the "home of revenue management and pricing expertise" that focuses on increasing profitability through diagnostic review. Dinaz spent 20 years in Revenue Management at British Airways, and also worked for resorts, hotels, and cruise lines.

In this episode, Dinaz explains how airlines, hotels, and cruises do pricing as she shares some of the strategies they use in line with the factors that affect their pricing decisions.

Why you have to check out today's podcast:

• Understand how most airlines, hotels, and cruises do pricing;
• Discover the strategies they use and the factors that affect their pricing decisions; and
• Find out why each employee – even the cabin crews – are important on getting customers and providing great service

"The biggest thing that you need to get right is your demand before you make any pricing decision at all."

– Dinaz Zaq

Topics Covered:

01:32 – How Dinaz got into pricing

03:02 – How do airlines do pricing? What factors affect their pricing decisions?

10:03 – The strategy behind "I will get the best price on a domestic flight if I book it six weeks before my flight"

11:47 – The difference between pricing hotels and pricing airplane seats

14:06 – Why hotels don't hold their prices really high for last-minute travelers

15:53 – Hotels and discounts on their rates

16:40 – What is the strategy of cruises when it comes to pricing?

20:35 – Pricing table topics: "Every employee creates or destroys value"

22:35 – Dinaz's pricing advice

Key Takeaways:

"Things depend, really, on the strategy that the airline follows and what's the flavor of the day as far as their management is concerned." – Dinaz Zaq

"You might get some hotels that won't drop their price. Some might even take walk ins at the door for a cheaper price. They don't want to publish it on the internet. Airlines might. It's about, you know, when we talk strategy, when you try to hold the price then drop it later, you can sell it through a different distribution channel so that it doesn't hit the public and therefore not destroy your pricing strategy." – Dinaz Zaq

"Their strategy is to fill it to 100%, and that's why you might find cruise prices dropping near at the time quite a bit. But what the customer misses out on is you may not get your best cabin if you wait too long, because the people that are regular cruisers, they have got all the balconies and then you'd be stuck somewhere on top of the discotheque or in a noisy area or whatever." – Dinaz Zaq

People / Resources Mentioned:

• British Airways: https://www.britishairways.com/
• STR: https://str.com/
• Marriott: https://www.marriott.com/
• Hotwire: https://www.hotwire.com/
• Priceline: https://www.priceline.com/
• Booking.com: https://www.booking.com/
• Hotels.com: https://www.hotels.com/

Connect with Dinaz Zaq:

• LinkedIn: https://www.linkedin.com/in/rpcltd/
• 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 August 10, 2022, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/discovered-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 Ace of Diamonds from the Selling Value card deck.

When companies or people inside companies say we sell a commodity, what that says to me is they don't understand the value of what they offer.

It may absolutely be true that you sell a commodity-like product where we're selling gold coins and your gold coins are exactly the same as your competitor's gold coins. And we could think of that maybe as a commodity, but then that's really not what we're selling.

What we have to sell are all the things that go around the gold coins or go around our commodity-like product. We should be thinking about what are the services? Can we do better delivery? Can we do better payment terms? Can we make our customers trust us more? Can we give them better advice? There are many, many different ways that we might be able to add value to our buyers above and beyond the individual product that we're selling.

I often think that when people are saying the words, we sell a commodity or our product is a commodity, they've actually stopped thinking about how they're better than their competition. They've stopped thinking about what their buyers really care about.

So, in my mind, there really is no such thing as a commodity and all companies should banish the word.

We hope you enjoyed this memecast. This is also an example of how Pricing Table Topics works. Grab a deck of our cards, pull out a random card, read the saying, and then talk for one to two minutes about what that card says. This will improve your understanding and more importantly, your ability to communicate these important concepts.

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/

Dominick Latorre is the Senior Director of Yield and Inventory Management at Sinclair Broadcast Group. He used to be the Manager of Pricing and Planning at Spectrum Reach, and he's the Assistant General Manager of the Men's National Team in USA Ball Hockey.

In this episode, Dominick explains how they price slots for broadcast advertisements as he relates it to how airlines do pricing for their seats.

Why you have to check out today's podcast:

• Learn how Sinclair does pricing for perishable inventory like ads
• Understand how it's related to how airlines price their seats
• Find out why it's important that your sales people know how to make sure that your service is priced effectively

"It's educating yourself on different industries outside of yours and how you can take those concepts and those ideas and apply them to your business.

– Dominick Latorre

Topics Covered:

02:01 – How Dominick got into pricing

04:12 – Sinclair's goal to improve efficiencies with the local pricing experts and revenue with pricing

06:41 – "It is not what I wanted. It's not what I wanted to buy."

09:25 – Relating and comparing how Sinclair does pricing to how airlines price their seats

14:46 – The factors that affect how Sinclair price the programs

18:38 – Pricing for political campaigns

23:01 – Pricing table topics: "Create real value with differentiation. Create perceived value with marketing."

25:36 – Dominick's pricing advice

Key Takeaways:

"I'm very happy with the choice I made back in 2007-ish to get into pricing, because as obviously as you know, it's the biggest driver of profit if you're priced correctly, so much more than sales volume or anything else." – Dominick Latorre

"With the various choices for marketing dollars these days, you can't be upsetting clients and pulling multi-million-dollar deals because we weren't priced effectively and given them a rate that from day one it should have been a premium program; obviously, the demand is there. We should be charging it based upon that." – Dominick Latorre

"You can drive more revenue by lowering your rates, and we've seen that in some cases." – Dominick Latorre

"We talk to our sellers all the time. Sell the value of the program. Don't combine it with other solutions. Don't sell a customer what we call a 9A4P rotator, where basically that customer spot could fall anywhere between that time period. That's not selling value. Look at the value of our solutions and price accordingly to them." – Dominick Latorre

"With so many marketing solutions out there and dollars to be spent, you have to make sure that you're priced effectively. And again, talking about value, making sure that the buyers see the value in your solution." – Dominick Latorre

People / Resources Mentioned:

• Sinclair Broadcast Group: https://sbgi.net/
• Professional Pricing Society: https://www.pricingsociety.com/

Connect with Dominick Latorre:

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

Connect with Mark Stiving:

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

This is an Impact Pricing Blog published on August 3, 2022, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/perfect-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 Ace of Clubs from the Selling Value card deck.

One of my favorite sayings when I'm teaching is, nobody cares about your product. What's fascinating is when you look at a company's website or you look at how somebody wants to talk about what it is they're going to offer you, they want to talk about their product.

I so much want to tell you, oh, I'm a pricing expert and I train people on pricing. But that's the product. What we really need to be doing is talking about the problems that our buyers have and the outcomes or the results they might be able to achieve.

Experts are able to take our features and say, oh yeah, I get what that means to me. But most of our buyers aren't experts. What we need to be able to do is instead of talking about our product, talk about the problems that our buyers might have.

I might go to a VP of sales and say, do your salespeople tend to discount too much too often? Now that's a problem. And if that resonates with this VP of sales, now we have something to talk about. But for me to walk in and say, I'm a pricing expert, and I teach salespeople how to sell value. That's all about me. And it only resonates if that person truly is an expert, and they have the problem.

So, I love to say nobody cares about your product. What we have to be doing always is thinking about our buyers' problems and the results they might achieve.

We hope you enjoyed this memecast. This is also an example of how Pricing Table Topics works. Grab a deck of our cards, pull out a random card, read the saying, and then talk for one to two minutes about what that card says. This will improve your understanding and more importantly, your ability to communicate these important concepts.

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/

Marcos Rivera is the Founder and CEO of Pricing I/O, a training and coaching boutique helping high-growth B2B SaaS companies accelerate ARR growth and market share. Marcos was the Operating Executive for Product Management and Pricing of Vista Consulting Group, and is the author of the book "Street Pricing: A Pricing Playlist for Hip Leaders in SaaS".

In this episode, Marcos shares his insights on some the common problems in the subscription industry. He also talks about the different ways to approach pricing adjustments in relation to software innovations, and discusses the hot topic of usage-based pricing.

Why you have to check out today's podcast:

• Find out what the three biggest pricing problems are when it comes to subscription and know why you shouldn't do those
• Discover why people don't pay much attention on the expansion part of land and expand, and learn how to go for it if you want to
• Understand why it's a good step to raise prices on the subscribers with highest usage first

"Go out there, get data, experiment and raise your confidence, and the pricing problem gets so much easier."

– Marcos Rivera

Topics Covered:

01:32 – How Marcos got into pricing

02:33 – Biggest pricing problems in subscriptions: (1) Pricing without aligning their package of value to their clients

04:00 – Why decoupling pricing and packaging is difficult

04:47 – Enhancing your pricing when introducing software innovations

06:31 – Biggest pricing problems in subscriptions: (2) Underpricing

09:08 – Biggest pricing problems in subscriptions: (3) Overcomplexity in the model

10:55 – People not focusing on the expansion part of the commonly used phrase in SaaS, "land and expand"

14:02 – Understanding usage data in providing better value to your product

16:17 – Getting things to levels of sophistication and sophistication at scale

18:29 – Where, when, and how to utilize usage-based pricing

24:38 – Pricing table topics: "Raise prices on the subscribers with highest usage first."

26:12 – Marcos' pricing advice

Key Takeaways:

"The way to start with pricing, especially if you already have an existing model and you're looking to enhance it, believe it or not, is not where most companies start, which is "how much should I charge with this new thing?" It's the first thing on their mind, the first question on their mind, but that question doesn't get answered until you understand how your value is being changed..." – Marcos Rivera

"There's nothing wrong with land and expand, but what often happens is that it's mostly land and very little expand…. When you place so many of your chips on the land part of it, you start being overly generous with your limits or overly generous of what you're including. What ends up happening is you put so much of your expansion opportunity into the land that your expand opportunities are limited. Overly heavy on the land makes it tougher to expand." – Marcos Rivera

"Be a little bit careful about over indexing on what they're doing in the system because you don't want to inadvertently discourage them from using the product." – Marcos Rivera

"Value is not in the people using it. The value is in the machines doing, and the volume and frequency with which it's doing it." – Marcos Rivera

"Remember, perceived value gets stronger and better with more usage. That correlation works out really well." – Marcos Rivera

People / Resources Mentioned:

• Pricing I/O: https://www.pricingio.com/
• Vista Consulting Group: https://vistacg.com/
• Vista Equity Partners: https://www.vistaequitypartners.com/
• Netflix: https://www.netflix.com/
• Slack: https://slack.com/

Connect with Marcos Rivera:

• LinkedIn:https://www.linkedin.com/in/marcoslrivera/
• Website:https://www.pricingio.com/

Connect with Mark Stiving:

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

This is an Impact Pricing Blog published on July 27, 2022, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/pricing-table-topics/

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 Ace of Hearts from the Selling Value card deck.

Selling value really does do a lot of things. But if you imagine for a second that a buyer has some expectation of how much value they're going to get from our product. That is a good indicator of their willingness to pay, it's a good indicator of how urgent it is that they want to solve the problem or buy the product.

But what if we had the ability to increase the amount of value that person expects to get from our product? For the sake of argument, let's say we 10x it. We make our product really valuable to them. All of a sudden, they're willing to pay more. They want it. They want it now. They want it faster.

And so, we're going to increase our average selling price, we're going to shorten the sales cycles. And of course, if they believe we're going to deliver a 10x, they're going to buy from us instead of from our competition. And once we can recognize those buyers who really are going to get a lot of value from our product, then we get better prospects as well.

So, it turns out when we can sell value, we really do increase win rates and average selling prices.

We hope you enjoyed this memecast. This is also an example of how Pricing Table Topics works. Grab a deck of our cards, pull a random card, read the saying, and then talk for one to two minutes about what the card says. This will improve your understanding and more importantly, your ability to communicate important concepts.

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/