Impact Pricing

This is an Impact Pricing Blog published on Sept 16, 2021, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/value-propositions-vs-value-selling/ 

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

Robert Tinterov is a CEO at Atenga Insights Group. He is a serial entrepreneur, investor, Advisor, and his expertise are also in Sales, Marketing, General Management, Product development, and disrupting digital media.

In this episode, Robert talks about how you can explore your pricing walls and use it to increase demand for your business and scale your growth.

Why you have to check out today's podcast:

• Learn to identify your price walls so you can map prices according to your target audience and maximize profits
• Find out how to ask the right question about a person's willingness to pay
• Learn why pricing potential needs to be raised in the boardroom and how it can be done

“Learn and explore your price walls. Instead of avoiding them, work with them, use them and create higher demand for your products or services.”

- Robert Tinterov

Topics Covered:

01:38 - How he got into pricing

02:45 - What does Atenga focuses on

04:00 - Three levels of potential users of Atenga

05:01 - People purchasing from Atenga versus Atenga selling to them

05:38 - A process they developed to help clients

07:36 - Reasons why price walls exist

08:19 - What usually is the last digit for pricing walls

09:08 - Asking a question on someone’s willingness to pay without being obvious about it

11:08 - How to arrive at the last digit that is nine and can they tell the difference in demand on 350 versus 359

12:17 - Ways Atenga finds customers

13:01 - Robert’s biggest concern

14:34 - Why is pricing not yet in the boardroom’s agenda and what can be done to

Improve on this aspect

19:03 - Pricing advice that can create great impact in one’s business

19:46 - Starting small and doing the easiest but has the most impact to the company

Key Takeaways:

“Our secret sauce (knowing one’s willingness to pay) is like enhancing well-known processes, and then combining that with accessible, firsthand survey data, instead of looking at transactional data.” - Robert Tinterov

“I think the pricing question as such, is not being treated as it should in a lot of businesses, and hence why people don't really take care of this. That's why people are leaving money on the table. They're developing features and functions that people don't want to buy. And that won't create sustainable companies.” - Robert Tinterov

“You can't do everything, but you need to do something, just start doing more about your pricing in your business, and you will see effects and results quicker than you can expect.” - Robert Tinterov

Connect with Robert Tinterov:

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

Connect with Mark Stiving: 

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

To be a pricing leader, you must be a value-based business. 

Welcome to the Impact Pricing Memecast, where I take one of our daily memes and provide a little bit more insight behind the word. 

In general, a company is either a pricing leader or a pricing follower. A pricing leader is someone who looks at the steady-state of pricing and says, we're going to change our prices first.

“If you want to be a pricing leader, you really need to be focused on value, not on cost plus.” - Mark Stiving 

And typically the rest of the market is going to follow that pricing leader. However, if you want to be a pricing leader, you really need to be focused on value, not on cost plus. 

Especially not on competitive pricing. Once you, as a company can focus on value, you have the ability to see that the market is willing to pay more than what you are currently charging.

You have the ability to see that your products are highly differentiated from your competitors or that you've got very loyal customers who are going to stay with you. Even if you raise prices above where they are relative to your competition. 

When you adopt this concept of truly understanding how customers perceive value, then you have this ability to say, we're going to lead the price change because even if nobody ever follows, we're going to be better off.

We understand the way our buyers are making decisions. But the great news is if you're a pricing leader and you choose to increase prices because you know, you can get away. The odds are really good. 

Your competition is going to follow anyway, which simply raises industry profits, which also means your profits.

So if you want to be a pricing leader, you need to be focused on 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

For a change, Mark doesn't have a guest for today. Instead, he answers questions he would have liked interviewers to ask him. And part of that is, he highlights some important ideas and insights inside his new book with the title of 'Win Keep Grow: How to Price and Package to Accelerate Your Subscription Business.'

Join us in this episode as we get to preview some of the golden nuggets in Mark's newest book.

Why you have to check out today's podcast:

• Find out the important revenue buckets you must manage in subscriptions, so you maximize revenue
• Find out the three essential value levers that companies who are running subscriptions should have to manage and think about to arrive at a good pricing decision
• Discover four ways to grow your customers, so you increase revenue

"One of many things I find fascinating about subscriptions is that many subscription companies have figured out I have to go win customers, and I have to go keep customers. But far too few have figured out, hey, I really should spend time growing customers. And the real reason for that is it's not urgent."

 - Mark Stiving

Topics Covered:

01:05 - Why Mark wrote the book 'Win Keep Grow'

02:13 - The three key parts he considered when he wrote the book

03:05 - What he would do if he would rewrite the book and why

04:10 - How traditional businesses differ from subscription type ones

04:42 - Important three value levers that he built into the book

08:56 - Four ways to grow a customer

11:09 - Something fascinating about subscriptions

12:11 - Mark's recommendation to companies

Key Takeaways:

"What I found fascinating about these three value levers is they seemed obvious to me as I'm working on subscriptions. And then you step back and say, Well wait, all three of those value levers are crucial for every business, we just don't stop and think about them that way." - Mark Stiving

"If we can target a really clear market segment, and we can build a product around that market segment, we can create the right packaging for it; we could have the right pricing metrics for it, then that market segment might have a higher willingness to pay. We'll be able to keep them longer, and we'll be able to grow more revenue from them. So, it just makes a ton of sense for us to be focusing a lot on market segments in our subscription world. But we should be doing that in our traditional business as well." - Mark Stiving

"The fact that we're constantly in contact with and helping and delivering value to our current customers gives us the ability to package our products in a way that we can continue to grow our revenue." - Mark Stiving

"If we charge for the right things, and our customers use more of our product because we're charging for the usage of our product, they end up paying us more. But what's really important about that is, as our customers use more of our product, they're getting more value. It's okay that they pay us more. It isn't like we're trying to gouge them; we're simply saying to them, hey, as you get more value, you pay us more money. And that seems really reasonable." - Mark Stiving

Connect with Mark Stiving: 

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

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

Read Full Article Here: https://impactpricing.com/blog/messaging-a-price-increase/

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

The best pricing metrics are highly correlated with users value metrics. 

A pricing metric is what do we charge for McDonald's charges for hamburgers? That's a simple pricing metric, PayPal charges a percentage of the revenue that we collect.

That's a pricing metric. There are many different types of pricing metrics, especially in the world of SaaS. We have the ability to choose many, many different possible pricing metrics. We could choose the number of clicks we could choose. The number of leads we could choose, the amount of data that somebody downloads or the number of gigabytes.

Someone has access to there's many, many different possible. Pricing metrics. Probably the most common is users. How many users are there or a per seat basis, we get to choose what pricing metric we want to use. And what we want to do is choose a pricing metric that is highly correlated with a value metric and a value metric is how is it that a customer perceives value from the product.

“Choose a pricing metric that is highly correlated with a value metric.”- Mark Stiving

Now, if you think about Netflix a long, long time ago when they first came out, they put Blockbuster out of business. Well, how did they do that? They did that by changing the pricing metric metric. Blockbuster was charging rentals of a movie by the night plus late fees. If you forgot to return it, Blockbuster changed the entire pricing model.

And instead of charging a rental per night, They charged a monthly subscription, which said how many DVDs you were allowed to have at your house at any one point in time. They just changed the pricing metric. And because people love that pricing metrics so much more than they loved paying late fees to blockbuster.

Netflix took off. What you want to do is think really hard about how is it that your customers perceive value. And then see if you can find a pricing metric, what is it that we're going to charge for that is highly correlated with how your customers perceive that. PayPal is probably the most perfect example of this possible as a salesperson, as a selling company, I may X except revenue using PayPal.

So somebody pays me money using PayPal, and I love getting more money. The more money I make, this is just awesome. This makes me happy. Well, PayPal takes a small percentage of that. Well, I don't like giving PayPal a small percentage of the money I make, but I like making money. I hope someday I pay PayPal a million dollars in a year because that meant I made $50 million.

If they're taking 2%, you can see how their pricing metric is highly correlated with how I perceive value. That's what you want to be thinking about your best pricing metrics are highly correlated with users, value metrics. 

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

With over 20 years of software experience, Ryan Glushkoff provides pricing and product marketing expertise for business-to-business (B2B) software companies. This includes offer packaging, pricing, market research, and pricing strategy and organization.

Prior to founding Fraction8, Ryan cut his teeth in both the pre-sales and post-sales world for both mass-marketing and custom-enterprise software companies, which gives him a unique perspective on how SaaS companies need to price and market themselves for success.

In this episode, Ryan shares what important data set his qualitative and quantitative interviews and surveys uncover to arrive at a pricing decision.

Why you have to check out today’s podcast:

• Find out the three types of competitive research you can use to understand your competitors’ offer structure so you come up with the right pricing decision
• Learn about what different companies are using in their pricing structure
• Find out what is of utmost reason for putting your price online

“Pricing is a team sport. All of those different groups need to be part of the decision. So, it's incumbent upon the product team to steward the rest of the organization through that decision making process.”

- Ryan Glushkoff

Topics Covered:

01:36 - What he does as a B2B technology pricing consultant

03:32 - Doing qualitative interviews and quantitative surveys

04:17 - Aha moments when it comes to clients saying what they claim customers value versus what customers say they value

05:16 - Important data points uncovered with qualitative and quantitative interviews

05:57 - What is competitive research and its different types

07:44 - Times when you consider pricing as part science and part art

08:46 - Going the same pricing metric as the competitor versus charging with better options

09:56 - Sharing his concern about using different pricing metrics

10:38 - Perpetual license of moving to SaaS

11:23 - Touching on usage-based pricing

12:43 - Outcome-based pricing being a version of user-based pricing

13:47 - PayPal and tollbooth pricing

14:41 - Are Lyft and Uber subscription-based companies

15:06 - Price structure of AWS and how it’s different from Uber

18:48 - Regularly buying diet Coke compared to subscription-based

19:37 - What he thinks of putting pricing online

21:42 - When it’s not proper to pricing online

23:28 - His thoughts to a recommendation of putting a price range versus none at all

24:35 - Which way to go -- put price online or not

26:14 - When do companies miss part of their pricing research

26:44 - Where should pricing lives in a company

30:24 - How pricing is screaming for a center of excellence type of approach

31:58 - His best pricing advice that can have a great impact on one’s business

32:27 - Does he actually ask, ‘What are you willing to pay’

33:33 - Mark’s answer to Ryan’s question on why he asks, ‘What are you willing to pay’

Key Takeaways:

“Competitive research is something that is really good to know, but since every company has their own unique value proposition that they bring to market, just copying a competitor, you're probably leaving something on the table by doing that, or you're selling yourself short.” - Ryan Glushkoff

“If you'd ask which side of the fence I would come on, or land on for, whether to put your pricing online or not, I would err on the side of putting it online. The idea of maintaining positive control of the sales conversation is paramount. Especially if you do your homework and you're confident in the research that you've done that informs the value of your solution, the price that people are willing to pay.” - Ryan Glushkoff

“I really think it [Pricing] should live in the product organization because the product owner is really the CEO of the product; the product team has the deepest understanding of the problems that the buyer and the user are facing. They have the deepest understanding of how to go about solving those problems, through the features and capabilities that the solution is offering.”  - Ryan Glushkoff

People/Resources Mentioned:

• PayPal: https://www.paypal.com/ph/home
• Lyft: https://www.lyft.com/
• Uber: https://www.uber.com/tw/en/
• AWS: https://aws.amazon.com/

Connect with Ryan Glushkoff:

• LinkedIn: https://www.linkedin.com/in/glushkoff/
• 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 Sept 1, 2021, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/the-cost-of-win-keep-grow/ 

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

There's really only two basic types of value that customers can get. And that's real value and perceived value. Real value is after they've bought the product they're using it.

How does it truly impact their life? How does it really make a difference or solve their problems or yield results? 

That's real value in the world of B2B. We could think of real value as economic value. How much more money does it make or save the customer? That's real value. However, before somebody buys the product, they don't really know the real value.

“Perceived value is the only value that matters in price.” -Mark Stiving

In fact, nobody really knows how much value any specific customer is going to be able to get from any specific product. What that means is that before somebody purchases our product, it's all about perceived value.

What does a customer believe they're going to get after the fact? What we need to be thinking of in terms of setting prices or communicating value to our marketplace is making sure our buyers maintain the highest level of perceived value possible from our product. 

Now I'm a huge proponent of creating products that have real value and then making sure we communicate that value to our customers. So their perceptions are really close to reality. 

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

Jeff Robinson is the CEO at Revolution Pricing LLC and Author of Price for Growth!

In this episode, Jeff shares how pricing should be a strategic effort in driving a company's growth. He talks about how pricing executives should think in terms of long-term margin, having growth precedes profit.

Why you have to check out today's podcast:

• Find out why pricing people should be at the front and center in driving value conversations for strategizing a company's growth
• Learn how to look at the customers' value long-term and generating profit for life rather than looking out for profit for a year and ruining your long-term profit
• Discover the two macro goals of pricing so you think of it as a long-term profit-generating engine

"Think about the growth aspect of your business before you think about the profit aspect of your business. Think about the engine of growth before you think about harvesting profits." - Jeff Robinson

Topics Covered:

01:31 - How he started his pricing career

02:34 - Sharing his story of why he stayed with PROS for almost two decades

04:46 - What happens when salespeople have discount authority

06:20 - Different pricing models

07:36 - Are salespeople the best ones to determine pricing strategy?

10:18 - What he thinks of price differentiation

11:53 - Fairness in pricing - what it really means

15:19 - It's almost never really about pricing; it's about value

17:58 - Can pricing people make or add more value as an internal consultant?

20:40 - What he'd like to see happen at the level of Pricing Director

23:06 - Pricing's two different kinds of macro goals

26:14 - What growth strategy should look like

27:40 - Win, keep, grow - what does it refer to

29:42 - Jeff's pricing advice that can greatly impact one's business 

Key Takeaways:

"Price differentiation is not only fine, I think it's desirable. But I think you got to do it in a way that you can maintain a good customer experience across your customer base." - Jeff Robinson

"Customers hate that they're getting priced based on their willingness to agree. If it's not fair, you're going to get a lot of blowbacks. If it is fair, then they'll play along. Look at the airline industry; you have tons of differentiated pricing. But I think most people understand the game; they understand there's some objectivity behind where the pricing is coming from." - Jeff Robinson

"Pricing needs to be at the forefront. I think pricing should be integral to the entire growth strategy of the company. And the reason I say that is because I think they have the most data. And I think they theoretically have the capability to understand all these intersections, if that makes sense." - Jeff Robinson

"Can pricing people make or add more value as an internal consultant? Yeah, definitely. Because as an internal consultant, they can operate at a level where they can add a lot of value, and they don't have to go into every minute detail. They can go into the level of detail that's needed." - Jeff Robinson

"The whole idea is if you think about growth precedes profits, then from a pricing perspective, pricing leadership should be thinking about growth first, and then thinking about profits when the time's right." - Jeff Robinson

People/Resources Mentioned:

• Price For Growth by Jeff Robinson: https://www.amazon.com/Price-Growth-Revolutionary-Step-Step-ebook/dp/B08Z5YTGTZ

Connect with Jeff Robinson:

• LinkedIn: https://www.linkedin.com/in/jeffrobinson4/
• Email: [email protected]

Connect with Mark Stiving: 

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