Impact Pricing

Damien Robert is currently the Chief Solution and Delivery Officer at Pricemoov. He's been at Simon-Kucher & Partners (SKP) for 17 years of his career so he actually understands pricing really well. Damien also took a three-year stint at Disneyland Resorts Paris. Damien develops and implements tailor-made pricing solutions, ensuring easy price steering across the organization.

In this episode, Damien talks about Machine Learning and how it helps optimize inputs in the pricing work as he shares insights in relation to Pricemoov's models.

Why you have to check out today's podcast:

• Find out what Machine Learning (ML) and Artificial Intelligence (AI) are all about and how these two are used in pricing
• Discover simple and advanced pricing strategies you can implement to reach a bigger market
• Understand why looking at price in the perspective of your client is a good move towards success

"Look at your prices with the client view."

– Damien Robert

Topics Covered:

01:32 – How Damien got into pricing

02:34 – What does pricing mean for Damien

04:28 – Damien's pricing story when he was still in Disneyland

06:25 – What makes Pricemoov different in the pricing market and how Damien got involved with them

08:50 – Simple and advanced pricing strategies people can implement

10:57 – Collecting competitive pricing information with car rental companies

13:00 – Defining Machine Learning (ML) and Artificial Intelligence (AI) alongside the things they do

16:45 – Using ML to forecast the effects of the decisions made for pricing

19:54 – Mark's Amazon story: his $20 book reaching a price $225 in Amazon

22:00 – Damien working in a theme park, the existence of black box

24:57 – The things Pricemoov considers when making pricing models

27:00 – Damien's pricing advice for today's listeners

Key Takeaways:

"Pricing is not only a price, but also the way you message it and what you can achieve." – Damien Robert

"Our software is allowing you to configure the rules that we provide. So, you have a set of rules, you, yourself, decide which one you want to use and implement for your product portfolio, because you may want to use one or another one, and we can basically train you on which one you want to use." – Damien Robert

"That's what people misunderstand. Sometimes in machine learning and artificial intelligence, they think that the model by itself can be smart. The reality is that the model is not smart, but the model can be much more granular and fit much more kind of situations because his granularity and the computer allows, basically, to have so many computations and so many different alternatives." – Damien Robert

"Somehow, machine learning can be used to optimize part of the dimension, some of the inputs, but basically, at the end of the day, you need a skeleton of decision making, which is important to have. Otherwise, you do not take the long-term impact of price changes. You do not take the potential competition reaction. So, you're missing a lot of the points." – Damien Robert

"Very frequently, you just optimize, set a price, but you do not check the consistency, you do not realize some of the price points, and you won't even realize that the way your prices are featured on the web is sometimes a catastrophe. So really, just look at the end of the tunnel and look at it because you will have a lot of surprise, especially on promotion. 50% of promotional faders are usually related to execution. It's not at all related to the design of the promotion itself." – Damien Robert

People / Resources Mentioned:

• Pricemoov: https://pricemoov.com/
• Simon-Kucher & Partners: https://www.simon-kucher.com
• Tesla: https://www.tesla.com/

Connect with Damien Robert:

• LinkedIn: https://www.linkedin.com/in/damienrobertpricemoov/#
• 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 22, 2021, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/the-art-of-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

Real value comes from real differentiation.

Real value is turned into perceived value through marketing.

When we're up against the competition, which most of the time we all. Our customers are buying perceived differentiation.

They look at our product or competitors' products. What's the difference in price and is it worth it? And the, 'is it worth it' has everything to do with the difference in capability, the product differentiation, the features that are different.

"Build real differentiation, but we have to make sure our customers know it." - Mark Stiving

Now we may have built the best product in the world. We may have built a product that is much, much better than our competitors, but if our buyers don't know that.

If they don't believe that, then they're not going to choose our product buyers.

Aren't buying based on real differentiation?

They're buying on their perceptions or what we'll call perceived differentiation. Our job as a company should be to build products that are truly better than our competitors.

In other words, build real differentiation, but we have to make sure our customers know it.

And that comes through marketing. It comes through sales efforts. We have to make sure we're communicating the fact that our product is better/different than our competitors.

We hope you enjoyed this podcast. If you see have any questions or feedback please email me [email protected].

Now go make an impact.

Connect with Mark Stiving:

• Email: [email protected]
• LinkedIn

Ebrahim El-Ebiary is a Pricing Manager at Goodyear Tires. He's been with Goodyear for six years now, having worked in Revenue Management at FedEx before that. Ebrahim is a Professional Certified Coach and he's genuinely interested in people and how they think.

In this episode, Ebrahim talks about the importance of curiosity and good relationship to your pricing practice as you continue to make money through helping your customers do the same.

Why you have to check out today's podcast:

• Learn about what revenue management is and the relationship it has with pricing
• Understand why it's important that pricing people understand their customers' future while having the customers take part in the creative process
• Find out about the benefits of having a good relationship with your customer and keeping that relationship until it lasts

"Before launching a very detailed analysis, ask the question, 'how will this be used?'"

– Ebrahim El-Ebiary

Topics Covered:

01:11 – How Ebrahim got into pricing

01:59 – Revenue management's relationship with pricing and yield management

03:48 – Does Goodyear have revenue management?

04:40 – Defining a coach and what a coach does; Is Mark a coach?

06:05 – Pricing and coaching as different sides of the same coin

07:50 – Why curiosity is important in keeping relationships with customers

09:27 – Questions to ask in order to better understand a customer's future

11:53 – Why it's important for tires to be talking to each other

14:26 – Where the idea of communicating tires came from

15:42 – Having the customers take part in the creative process and keeping that relationship with them

19:08 – Being in a zero-sum game situation of price negotiation

23:12 – Expressing complex analysis into simple statements to not lose your customers

26:32 – Pricing advice for today's listeners

Key Takeaways:

"A coach is someone that supports people getting from where they are to where they want to get to, not where he or she wants to get, where they want to get to. A coach does not tell you or does not impose their point of view." – Ebrahim El-Ebiary

"Making money is "the easy part" of it (doing business). Having the story and the vision, now that's where moneys truly made in a sustainable manner." – Ebrahim El-Ebiary

"Discovering the future comes from asking about the legacy that they want to build mixed with free flow working sessions where we pick on each other's ideas jointly." – Ebrahim El-Ebiary

"One thing remains at the heart of business is people. Once we lock in that relationship of trust and joint creativity, then we come back to do business together. That relationship then grows and flourishes, and with that, profits grow and creativity grows and the demand for new products that didn't exist or new services from existing products come to life." – Ebrahim El-Ebiary

"Know the question you're trying to answer before jumping into a detailed analysis or investing in a pricing system software, hiring more people. Just know what question you're answering." – Ebrahim El-Ebiary

People / Resources Mentioned:

• Goodyear Tires: http://www.goodyear.com/

Connect with Ebrahim El-Ebiary:

• LinkedIn: https://www.linkedin.com/in/ebrahim-elebiary/
• 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 15, 2021, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/the-best-attitude-for-a-great-value-conversation/

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

Costs don't drive pricing, willingness to pay drives prices. 

I remember 1989. Yes. I'm that old? I was selling automatic test equipment to the semiconductor industry, and I heard this story on the radio that changed the way.

I thought about pricing and costs forever. Intel built the 46 DX, which is the very first dual-core microprocessor in the world. Very expensive. 

Of course, AMD decided they were going to create a single core version and they charged a much lower price.

So they've taken a lot of business away from it.

Yeah. Intel's thinking 'Hey, we better do something'.

So Intel creates a single-core version of their microprocessor and they charge a price more competitive with AMD. And so now they're not losing quite as much business. Now, this story makes all the sense in the world until you learn how Intel made the SX.

They first made a DX, a dual-core processor, and then they took an extra manufacturing step with a laser to disable the coprocessor. It actually costs them more to build an SX, a single-core version than it did to build the dual-core version.

And yet they sold it at a much lower price. Well, how does that possibly make sense?

It makes sense because. Our costs. Aren't what drives our customer's willingness to pay?

It's the value to the customer that drives their willingness to pay.

We should stop overemphasizing our costs, especially when we're trying to set pricing. It's really about customer value. 

We hope you enjoyed this podcast. If you see have any questions or feedback please email me [email protected]. 

Now go make an impact.

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn

Mark Stouse is the Chairman and CEO of Proof Analytics. He was 2020’s Top 10 Most Influential Analytics Leaders. He was also CMO/CCO at Honeywell Aerospace, so he has tons of experience. Mark also hosts his own podcast called “Accelerating Value”, a weekly podcast aimed at guiding people in creating, defending, and proving value with the help of experts.

In this episode, Mark discusses how analytics lead SaaS businesses to success as he shares insights most SaaS entrepreneurs need to know about the relationship between analytics and pricing.

 

Why you have to check out today’s podcast:

• Discover how a different way of consulting like analytics can help SaaS businesses to become profitable nowadays;
• Know how much of a game changer analytics is in terms of keeping the relationship between customer loyalty and pricing intact;
• Find out how the scientific sense of inquiry helps pricing people reach greater heights in relation to sales and pricing with clients

 

“It isn't that you say, ‘Hey, what are you willing to pay for this?’ That's not the question. You've got to say, ‘tell me about what you're really trying to solve for here and how big a problem is this to you. What would make you feel spectacular?’ Then let's talk about the technical realities, and then let's talk about a price.”

– Mark Stouse

 

Topics Covered:

02:02 – Getting exposed to pricing and learning things through failures with Mark’s experience in Honeywell Aerospace and Proof Analytics

04:06 – Diving into the world of pricing with the help of advisors he trust

06:41 – Starting out in a SaaS company and initially doing consulting: a good way for one to be profitable

09:02 – A different consulting model – analytics – for a better, faster, and cheaper reality nowadays

13:16 – Business and the gap it has with data scientists due to the lack of contextual understanding in both concepts

18:23 – What does Proof Analytics charge for and why is that the right thing for them to charge for?

20:20 – Talking about the concept of 10 models equals 10 questions and how COVID affected the business industry in the past two years

26:05 – The differences in the opportunity costs of small and large companies

30:23 – A model as an indicator of customer success and people’s obsession with margins

33:25 – What makes SaaS beautiful is that it concerns value at all times

35:30 – Mark’s pricing advice for the listeners

 

Key Takeaways:

“If you want to talk about a lesson in the reality of economics, start a SaaS company and you will learn more than you ever dreamed was out there.” – Mark Stouse

“The problem has been not the math and not even the data. It has been the issue of how do we operationalize analytics so that everybody is able to make a better decision today than they were making before when they didn't have analytics. It really is taking the existing reality and making it better, faster, cheaper.” – Mark Stouse

“Data scientists really don't typically have much subject matter expertise about any part of the business, so as the business person, you have to be very prescriptive with the data scientist in terms of laying out the non-mathematical equation.” – Mark Stouse

“If you're a very large enterprise and you're spending $150-$200 million on marketing, what you are really after is maximizing the upside and minimizing the negative impact EPS from bad investments. That's what you're really after. If you are a much smaller company, you're really trying to avoid, among other things, being a two-time loser.” – Mark Stouse

“The intersection of customer loyalty and pricing is also a piece that is usually ignored, because pricing is seen in a very short cycle sense rather than something that's a longer time.” – Mark Stouse

“The human being has become key to the success of set which probably really and truly always was or should have been. There was just this unhealthy obsession with 90% profit margins.” – Mark Stouse

 

People / Resources Mentioned:

• Proof Analytics:https://www.proofanalytics.ai/
• Honeywell Aerospace:https://aerospace.honeywell.com/

 

Connect with Mark Stouse:

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

 

Connect with Mark Stiving:   

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

 

Every single customer touchpoint customers are evaluating us. They're saying that was a good experience. That was a bad experience. If we mess up an invoice and they have to call to fix it, that's a bad experience.

And that destroys. But if our invoices are super easy to understand, and they tie back to all the previous paperwork and they make it easy for our customers to do their job, like, oh, pay the bill, then we're adding value. Even if it isn't our main product. Every customer touchpoint adds or subtracts value.

“Everybody in your company that your customer touches either adds or subtracts value, make sure they add value.” - Mark Stiving

This is obvious. When we think about the products we build and our customers touch our products, our products, great products, high quality products. It may be obvious when we think about marketing departments, because marketing is putting out communications and are those communications truly resonating?

Or are they just falling flat or maybe even offending? What about customer service? When someone calls to our customer service line or our customer service people are delighting our customers, or are a little bit annoyed and feeling bothered that a customer bothered to call everybody in our company creates or destroys value, we need to make sure they know they should be creating that.

We hope you enjoyed this podcast. If you see have any questions or feedback please email me [email protected]. 

Now go make an impact.

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn

 

This is an Impact Pricing Blog published on December 8, 2021, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/the-power-of-procurement-matters/

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

Vikas Pal Boaddh is the Senior Strategic Marketing and Pricing Leader at Honeywell. He started out as a Software Engineer but has switched careers after getting an MBA in Marketing and General Management. His pricing journey in Honeywell was a happy accident for him. His startup in Food Tech wasn’t working in his early years, so he was introduced to Honeywell’s pricing team. Now, he’s been with them for 10 years. 

In this episode, Vikas discusses why value-based pricing is the right thing to do and shares why understanding how your customer thinks is a must in dealing with pricing.

 

Why you have to check out today’s podcast:

• Discover how important it is for you to understand the customer’s business first before making them understand how much money they’re going to make once they buy your product;
• Understand the four pillars of pricing frameworks in organization; and
• Find out how you can become more efficient in pricing through tips that will help you avoid repeatedly doing the same thing with progress.

 

“When you have an opportunity to price something, first, go and try to talk to the customers.”

– Vikas Pal Boaddh

 

Topics Covered:

01:44 – The happy accident that led to Vikas joining Honeywell

02:48 – What’s in the cost plus model that made Vikas passionate about it?

04:35 – Two things to take note of when implementing value-based pricing

05:51 – How Honeywell understands customers and their business

09:37 – Where should pricing sit in an organization?

10:53 – The difference in the roles of a pricing person and a product manager

12:32 – The first pillar in pricing frameworks for an organization

14:03 – The three other pillars of pricing organization

16:19 – The competition of having the credit for the price

18:36 – Where does Vikas put the focus when trying to become more efficient?

21:35 – Vikas’ pricing advice for listeners

 

Key Takeaways:

“Know the customers inside out. Understand your customer base. If someone doesn't know [their customers], they will find it difficult to implement value-based [pricing].” – Vikas Pal Boaddh

“It’s the pricing person's job to talk to the customers. Ask them about all the things which goes in their business, understand them, model them, dollarize them, and then set the price.” – Vikas Pal Boaddh

“As a pricing person, I have a key say in what the price should be, but I just said, the people who own the product – for example, operating managers – they are the people who are kind of holding the price for that. They should be doing a final sign off on that. As a pricing person, it's my role to provide all kinds of inputs and guidance to help them reach there.” – Vikas Pal Boaddh

 

People / Resources Mentioned:

• Food Tech:https://www.foodtech.com/
• Honeywell:https://www.honeywell.com/us/en

 

Connect with Vikas Pal Boaddh:

• LinkedIn: https://www.linkedin.com/in/vikas-boaddh-673a896/?originalSubdomain=my
• Email: [email protected]

 

Connect with Mark Stiving:

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