Impact Pricing

Mark Stiving is a widely recognized pricing expert and marketing pro who teaches companies how to boost revenues and realize their true value. He is the host of the Impact Pricing podcast, helping people win more business at higher prices through value, and has authored three books which all revolve around pricing.

Ron Baker is the Founder of VeraSage Institute, dedicated to helping professional knowledge firms bury the billable hour and trash timesheets. He has published seven books around the topics of business and pricing, and also is a radio talk-show host for The Soul of Enterprise.

In this episode, Ron engages in a pricing metric discussion with Mark as they share their insights on cost-plus, hourly pricing, and subscriptions.

Why you have to check out today's podcast:

• Deep dive into discussions about different pricing metrics, focusing on cost-plus, hourly, and subscriptions
• Find out why putting time in your service and charging by the hour isn't an ideal way to charge clients
• Understand why providing value is better than charging hourly or using cost-plus pricing

"There's always going to be people and businesses that use cost-plus and other inferior methods like hourly. They're going to be out there, but they're just not where my focus is. My focus is on the other end, trying to help people price and create more value so they can capture more value. I'm not interested in working for people that want to price in an inferior manner, because I think that means they're not providing enough value to you."

– Ron Baker

Topics Covered:

01:17 – Mark's five top reasons/times when cost-plus pricing makes sense

04:36 – Reacting to Mark's five reasons / doing value-based pricing along with cost-plus pricing

08:13 – Pricing in micro and macro level businesses: cost-plus vs value-based

11:37 – Why Ron refuses to pay by hourly billing + how auto mechanics price their work

16:24 – Talking about Ron and Colin's difference in perspectives

18:04 – How Mark charges clients 'hourly' and what Ron has to say about it

23:04 – Discussion around subscription + today's topic in general: pricing metric

27:25 – Mark's tax guy + why hourly billing isn't ideal for Ron

31:17 – On announcing a price increase: Do something nice for your customers

Key Takeaways:

"If I could categorize everything I just said, I'd categorize it in two categories. One is sometimes, customers demand it – so that would be Apple and government, and sometimes, it's just more efficient as a business to do cost plus than it is to do value-based pricing." – Mark Stiving

"In the world of cost plus and efficiencies, one could make the argument. I'm not saying this is true by any means, but one could make the argument. If I was in a very low margin, highly competitive business, it might be less expensive and more efficient to just do cost plus than to spend time trying to figure out what each customer's willing to pay me." – Mark Stiving

"One of my favorite sayings is customers hate price increases, but they'll hate it a little bit less if you blame increasing costs." – Mark Stiving

"The billable hour is what I'm crusading against, but on a larger perspective, the billable hour is cost-plus pricing." – Ron Baker

"At a macro level, there's no way that costs justify price or determine price. Can't be. Otherwise, no business would ever go bankrupt." – Ron Baker

"If somebody really did abuse you, then why would you ever work with that person?" – Ron Baker

People / Resources Mentioned:

• The Soul of Enterprise:https://www.thesoulofenterprise.com/
• Colin Jasper:https://www.linkedin.com/in/colin-jasper-7a401213/
• Win Keep Grow:https://www.amazon.com/Win-Keep-Grow-Accelerate-Subscription/dp/1631954784
• Time's Up:https://www.amazon.com/Times-Up-Subscription-Business-Professional/dp/1119893526
• Marco Bertini:https://marcobertini.com/
• The Ends Game:https://marcobertini.com/book/

Connect with Ron Baker:

• LinkedIn:https://www.linkedin.com/in/ronbaker1/

Connect with Mark Stiving:

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

This is an Impact Pricing Blog published on July 20, 2022, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/subscribe-to-heated-seats-in-a-bmw/

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 meme is the Ace of Spades from the Selling Value card deck.

Selling value really is the skill of increasing customer perceived value.

If you think about it, our customers don't really know how much value they're going to get from our products. And yet we as salespeople, product people, pricing people, we've seen other customers use our products. We've seen all the different places where they get value from our products. And if we've done a really nice job, we've been able to quantify some of that value that some of our previous clients have gotten.

Doesn't it make sense then that in a sales situation we find a way to help this buyer, someone who's evaluating our current product, to learn about and understand all the different ways our product might be able to add value to them. And once we can do that were increasing the amount of value that customer perceives for our product.

This is how we win more deals at higher prices. So, selling value really is the skill of increasing customer perceived value.

We hope you enjoy this memecast. This is also an example of how Pricing Table Topics works. Grab a deck of our cards, pull out a random card and read the saying. 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/

John Moss is the CEO of Flintfox International, a pricing software company with world class IP in the areas of pricing and revenue management. He's previously worked as the Chief Strategy Officer and also General Manager of MYOB. John is also trained to use explosive and radioactive devices.

In this episode, John talks about the work they do at Flintfox. He explains why pricing models should change in line with the updates constantly happening at present on software. Additionally, Mark and he discuss the complexity of pricing, especially in these days of high inflation.

Why you have to check out today's podcast:

• Discover why pricing models in software businesses should change from time to time
• Understand the current situation and complexities in pricing, especially in this time of high inflation
• Find out how much of a game-changer it will be to have organizations focus more on pricing and not just in cost reduction

"For many organizations, pricing has been off to the side and somebody who's got a quantitative bent will do that and look into it. I think there's an increasing need to employ experts in the organization that understand pricing, that understand pricing models, how you create value, and can help you manage through the current period of uncertainty."

– John Moss

Topics Covered:

01:18 – How John got into pricing

02:37 – Lessons learned as they transitioned from transactional to subscription pricing

04:14 – Talking about the work Flintfox does

06:51 – What makes Flintfox different from other pricing software companies?

09:40 – Discussion about the complexity of pricing nowadays

11:20 – Avoiding channel conflict and posting things for the public to see

13:25 – The challenge of increasing prices during this period of inflation

18:02 – John, business software, and value-based pricing

22:36 – Pricing table topics: "Fixed costs never matter to pricing. Never, never, never."

25:04 – John's pricing advice

Key Takeaways:

"Software is no longer build something, release it, and it stays stable and constant forever. Software nowadays is constantly evolving and changing, and so the pricing model for that product had to change as well." – John Moss

"It's increasingly important, I think, to have a good data set and an integrated data set to be able to understand exactly how your product portfolio is performing and what margins you're making." – John Moss

"We're seeing more people have the confidence to put through a higher increase in the expectation that they do it once and maybe it lasts for 9-12 months, as opposed to putting through 3% now and then come back in two or three months' time for another 3%, which that sort of attritional increase is probably less well received by customers than a big bang." – John Moss

"It's a consequence of software. What young people and you and I now expect is that software gets better all the time. I mean, we all see it every day. Every app we have on our phone gets updated all the time incrementally. But some of these applications do improve functionality quite significantly over a number of years. And so that's what you're paying for, effectively – the fact that the developers are still working on this product." – John Moss

People / Resources Mentioned:

• Flintfox International: https://www.flintfox.com/
• MYOB: https://www.myob.com/
• Microsoft: https://www.microsoft.com/

Connect with John Moss:

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

Connect with Mark Stiving:

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

This is an Impact Pricing Blog published on July 13, 2022, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/ballet-football-pricing-and-sales/

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/

Possibly my single favorite KPI in the world of pricing is average selling price. Are we managing average selling price per product, average selling price overall across the portfolio.

If you have a single product that has a price on it and you can monitor that average selling price, that gives you a great indication of what's going on in your marketplace, how well we're selling value.

If you can monitor average selling price by salesperson, now we're getting a great indicator of which salespeople do a good job at selling value and which ones don't.

If you can't manage average selling price, maybe you're going to have an average deal size. How big are the opportunities that we're facing, that we're being able to bid on? And which ones of those are we winning or not?

But my recommendation, find some KPI, maybe two or three, that are a great indicator of how well our customers are perceiving our value, which means their willingness to pay and how well our salespeople are selling value. Track them over time. Watch for the anomalies. Watch for the changes. And use those as indicators to see if you can figure out what's going on in your marketplace.

We hope you enjoyed this memecast. This impactful insight came from the book, Selling Value, which I wrote to help salespeople win more deals at higher prices. 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/

Gabriel Dabi-Schwebel is the Founder and CEO of SalesDeck, an online sales communication tool. He is also the Founder and CEO of 1min30, a French inbound marketing agency. He is an entrepreneur, speaker, and author of eight marketing and sales methodologies books. Gab hosts the Virtual Selling podcast.

In this episode, Gabriel talks about service packaging as he shares how they do it in his marketing company, 1min30.

Why you have to check out today's podcast:

• Find out how to get your product packaging and pricing right
• Learn good, better, best service packaging through the way a marketing company does it
• Understand why pricing is at the heart of entrepreneurship

"If you are in service, the idea of packaging what you sell is very important."

– Gabriel Dabi-Schwebel

Topics Covered:

01:29 – Growing up with French fonctionnaire parents while wanting to become an entrepreneur

02:19 – How Gabriel got into pricing; Gabriel realizes how important pricing is

04:36 – Talking about service packaging in line with his marketing company, 1min30

08:34 – The difference between the three price points

09:54 – Where he got the idea of his good, better, best strategy

10:36 – Did Gab learn how to have value conversations with clients?

12:06 – Gabriel's pricing advice

14:51 – Pricing table topics: "Be strategic. Focus on lifetime value."

Key Takeaways:

"I think pricing is really at the heart of entrepreneurship, because at one time, you need to price what you do, what you sell, what you create, and it's really a marketing aspect that is very interesting, because with pricing, you can make your revenue even bigger without working too much." – Gabriel Dabi-Schwebel

"It's really important to find the right price and to be sure that the price you choose is really the closest to what a customer is ready to pay and the ones that make you the more value and the more money in your pocket." – Gabriel Dabi-Schwebel

"Really thinking about lifetime value is really thinking about what is the price being acceptable by your customer and the value you bring him, and also the fact that you keep bringing value and keep in loyal to your product." – Gabriel Dabi-Schwebel

People / Resources Mentioned:

• SalesDeck: https://salesdeck.io/
• 1min30: https://www.1min30.com/
• Acquisition Strategy Design: https://www.amazon.co.uk/gp/product/2377740324/ref=dbs_a_def_rwt_bibl_vppi_i2
• Blair Enns' The Win Without Pitching Manifesto: https://www.winwithoutpitching.com/the-manifesto/

Connect with Gabriel Dabi-Schwebel:

• LinkedIn: https://www.linkedin.com/in/gabrields/
• LinkedIn: https://www.linkedin.com/in/gabriel-dabi-schwebel/

Connect with Mark Stiving:

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

This is an Impact Pricing Blog published on July 6, 2022, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/a-good-case-for-cost-plus-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/

Pricing decisions can always help us achieve our goals. We need to make sure we understand what those goals are.

I would start with understanding what the corporate objectives are. Oftentimes those are things like we need to raise our average selling price. We need to gain more market share. We need to have more margin.

Typically, these goals, these corporate goals, are established by our CEO and our executive team, and they're there to drive increased market capitalization.

However, your product may have a different set of goals than what your corporate goal is. So, what is the goal of your product?

The goal of your product may be to bring more people into the platform so that we then have more people we can sell upgrades to. That's a great goal. We need to understand that as we're setting our pricing.

Your goal may be we need to generate more revenue, more profit, so that we can fund other projects. That's a great goal. We just need to know what our goals are. As we're making these pricing decisions.

We hope you enjoyed this memecast. This impactful insight came from the book, Selling Value, which I wrote to help salespeople win more deals at higher prices. 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/

John Chisholm was a US lawyer. For 15 years, he's been in law firms, using value-based pricing, and now subscription pricing. John swims in the ocean every morning with his Speedo around his neck.

Pricing for law firms or even major consultancy firms is not easy. Price your final client contracts too high, and you'll lose some of your most high-value clients. Price them too low, and you'll be forced to work too few staff to the bone to cut costs.

In this episode, John shares how law firm should approach their pricing strategy.

Why you have to check out today's podcast:

• Discover how to create a pricing revenue model that funds a thriving firm while generating real value for clients
• Learn how to make your law firm and consultancy clients understand the value of your service and the risks they are avoiding by hiring you compared to your competitors by communicating the value you provide
• Discover why a pricing expert is essential to the profitability of any law firm

"Just don't price your own work."

– John Chisholm

Topics Covered:

01:06 – How John got into pricing: His late father's story in relation to legal service fees

03:06 – Doing timesheet free billing as a law firm in the 1970s to '80s

05:25 – The old law business model of billing by the hour

06:38 – How things led him to his aha moment in relation to the practice of pricing

10:37 – Changing the mindset around pricing: Possible or not?

15:48 – "The true indication of a really good professional is not so much the answers they give; it's the questions they ask"

19:24 – Having a value conversation around $500 vs. $270's worth

22:15 – John's pricing advice

23:31 – Pricing table topics: "Sunk costs don't matter to pricing or any business decision"

Key Takeaways:

"Now it's very, very ingrained – the whole profession, I'm afraid. There has been a lot of movement, but they've been mainly in smaller, innovative firms. But the large firms, despite what they say, when you peel back the onion, the measurements, their rewards, their whole internal systems still work around time, and it's hard to change, and they're very successful." – John Chisholm

"I know I'll get into trouble for saying this, but lawyers buying and selling to each other is not a great recipe for innovation or change or taking risk." – John Chisholm

"Those that perceive they have the most to lose will be the last to change, and that will be the big end of town worldwide." – John Chisholm

"I try and get the lawyers that I work with my clients to stop thinking like lawyers, because often, the solution is not a legal solution; it really isn't, or the objectives are not a legal solution. It may be that what we're going to do has legal input, and that's the skills that the lawyers have that someone else doesn't have. But it's turning the conversation on its head. It's asking the right questions. And I think the true indication of a really good professional is not so much the answers they give; it's the questions they ask." – John Chisholm

"I work more with my client lawyers focusing on what additional benefits can you give to clients, many of which don't cost anything to the law firm but add value to the client; the price just follows. I think also, if you can focus on increasing the client's profit, our profit will follow as a profession." – John Chisholm

"I think even though it might be for short term profitability, there's just so many good lawyers that just do underestimate the value that they're providing to their clients, and that's their fault, not their client's fault." – John Chisholm

People / Resources Mentioned:

• Ron Baker: https://www.linkedin.com/in/ronbaker1/
• VeraSage Institute: https://www.verasage.com/
• John Chisholm Consulting: https://www.chisconsult.com/

Connect with John Chisholm:

• Email: [email protected]
• Website: https://www.chisconsult.com/
• LinkedIn: https://www.linkedin.com/in/chisholmjohn/

Connect with Mark Stiving:

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