Impact Pricing

Larry Walsh is the leading go-to-market advisor to technology executives, channel leaders, and solution providers around the world. Widely known for his ability to cut through problems and challenges facing vendors, distributors, and solution providers, Walsh is sought for his advice, counsel, insights, and consultation on channel strategies and technology market trends.

In this episode, Larry shares how to determine channel profitability and the economic equation that goes with it. He talks about how brand presence is one of the determining factors to persuade channels to take the risk of selling your product. He also differentiates how you can make money or compensate channel partners for selling a product directly versus selling a subscription for a product. He also shares what his company, Channelnomics, does.

Why you have to check out today's podcast:

• Learn how to structure your process in terms of relationships you want to create with your channel partners in order to meet the types of need you have
• Understand the pricing strategy that goes with having channel partners, so you get them to convince to sell your product instead of the competitors'
• Find out the sales motion [sales model] you want to operate on so you determine how to set the compensation and who sets the price

"Once you fall out of that zone where there's none of the endemic margin in your pricing to support yourself plus your partners, then stop selling to your partners."

- Larry Walsh

Topics Covered:

01:38 - How he transitioned from being the newspaper editor to a channel guy

03:22 - What he thinks of channels

05:17 - A channel being a sales motion

06:08 - Talking about parallel channels and channel strategy

07:20 - Pricing strategy for channel partners

11:15 - What he thinks as a mistake when dealing with channel partners

11:57 - Determining channel profitability and the economic equation associated with it

14:57 - How brand presence affects channel partners' decision to sell a product

15:57 - When can you go shallower on the margin

16:30 - First mover advantage in terms of consideration

17:30 - Selling a SaaS through a channel versus selling a physical product through a channel

21:53 - How to compensate a channel partner for a subscription type of sales

22:56 - How do you make money on a sell-through-sell on a more consumption-based model

24:19 - Differentiating the subscription and consumption-based models

25:03 - Talking about lock-in terms and renewal rates

25:44 - Larry's pricing advice that has a great impact on your business

26:57 - What is Channelnomics and what does it do

Key Takeaways:

"What we look at when somebody comes to us looking for a channel strategy, the first thing we want to know is, who's the customer? What does the customer need from you, or what does the customer need to be successful with your product? And that will then define the chain or the channel that it goes through." - Larry Walsh

"To me, a channel is a sales motion. And that can include direct relationships; it can include automated relationships. So, it's not the ‘what’ that's doing, it's the ‘how’ it's being done." - Larry Walsh

"Often, a mistake that's made when dealing with channel strategies is thinking about this as what do I have to pay versus what do I have to do to enable? Or what do I have to do to engage with a partner to be a good go-to-market, have a good go-to-market relationship?" - Larry Walsh

"When I think about channels, what I'm thinking about is selling relationships." - Larry Walsh

Resources Mentioned:

• HP: https://www8.hp.com
• Cisco: https://www.cisco.com
• Microsoft: https://en.wikipedia.org/wiki/Microsoft
• IBM: https://www.ibm.com

Connect with Larry Walsh:

• LinkedIn: https://www.linkedin.com/in/lmwalsh2112/
• Email: [email protected]

Connect with Mark Stiving: 

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

This is an article published on March 31, 2021, turned into an audio podcast so you can listen on the go.

Read Full Article Here:  https://impactpricing.com/blog/why-you-need-to-price-before-during-and-after/ 

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

You've heard it, you've probably said it, your company probably says it. Everybody thinks they're gonna land and expand. But what I want you to do is take a moment and think about all of the efforts, initiatives you have inside your company. 

What is sales people work on what marketing people work on what products people work on. And I will bet you that most of the effort that you have goes on winning new customers, how do I win new customers? Surely we focus a lot on land. And by the way, we probably also focus on retention. But the thing companies rarely focus on putting true effort and energy behind is the expanding part of land and expand. 

"Growth in subscriptions comes from land and expand, you focus on land already, focus more on expand." - Mark Stiving

What does expanded mean? It means I want a customer and they're paying me some amount of money, let's say it's $100 a month, how do I get them up to $125 a month, or up to $200 a month? Think about growing individual customers or individual buyers. 

And that's what expand really means. If you're curious, there's only four ways I know to get more money from a current customer, we can raise their prices, we can convince them to use more of our product. And if we have the right pricing metric, then we get paid more. We could upsell them into a bigger package. Think good, better, best. 

We get them to go from good to better. We could cross sell them into a different related package. But in the end, if we're not focusing on how we get more money from our current customers, we're ignoring the expand part of land and expand. That's probably where most of your opportunities for growth. 

We hope you enjoyed this memecast. If you see any of our memes that you'd like move to the top of our memecast list, please let me know. If you have any feedback, definitely send it. You can reach me at [email protected]. Now, go make an impact.  

Connect with Mark Stiving:  

• Email: [email protected] 
• LinkedIn 

Anshu Jalora is the Founder and Managing director of Sciative Solutions Private Ltd., used to be a Director of Pricing Strategy at Starbucks, Pricing Scientist at PROS, and Director of Pricing at Overstock. 

In this episode, Anshu talks about how true price elasticity brings about change in customers behavior and creates great impact in business. He shares about what his company, Sciative does at optimizing pricing, simplifying solutions from massive data to generate insights in lightning-fast speed necessary for decision making needed to make a maximum impact to the business. 

Why you have to check out today’s podcast: 

• Find out what Sciativedo to help businesses maximize value in the massive data available to them 
• Find out the two crucial things that make a huge impact in a customer's traffic pattern
• Learn how to achieve bringing in customers from low-end products to high-end products with the understanding of price elasticity and consumer behavior

“Focus on three V’s - Value, Variety, and Velocity. As you're looking at your pricing processes, focus on these three V's.” 

- Anshu Jalora 

Topics Covered: 

02:17 - An interesting story related to his Ph.D. story 

03:30 - How he got into Pricing 

04:07 - What made him like Pricing 

06:09 - Success stories in B2C in terms of applying scientific models for pricing 

08:52 - Capturing value through individual customer level or collection of customers together 

09:32 - Talking about the coined word Sciative 

10:39 - How can Sciative help businesses truly find value in the massive data that they have 

13:36 - Price elasticity and consumer behavior 

15:26 - Two things that basically make a huge impact on a customer's traffic pattern 

21:20 - His thoughts on the criticism against price elasticity 

23:55 - Playing with different types of mathematical models in coming up with true price elasticity 

24:58 - What are Walmart parking lot products 

28:26 - A pricing advice he shares that would have a great impact to one’s business 

Key Takeaways: 

“Pricing is a very powerful tool. It's educational for customers. Sometimes we guide customer behavior, we help customers figure out what is right for them. We make a direct impact on the business.” - Anshu Jalora 

“What we found used to work best was that you don't have to take a blanket pricing approach everywhere, there will be some products where you will have more opportunities of increasing pricing without affecting customer sentiments and in some others you will not increase customer prices. You may even decrease prices to make the entire portfolio look competitive enough.”  - Anshu Jalora 

“I fundamentally believe that if you change prices, customer behavior will change and that is elasticity for me.”  - Anshu Jalora 

“Some very misleading information also get picked up by simplistic models, if we do not get into the nitty gritties and details and separate out seasonality effects, separate out cannibalization effects, cross price elasticity effect, we won't be able to compute the true price elasticity. And this is where elasticity gets criticized a lot. And that's what we try to avoid when you're educating customers.”  - Anshu Jalora 

People / Resources Mentioned: 

• Andy Boyd: https://www.linkedin.com/in/andy-boyd-9760945/

Connect with Anshu Jalora:

• LinkedIn: https://www.linkedin.com/in/anshujalora
• Website: https://www.sciative.com/

Connect with Mark Stiving: 

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

This is an article published on April 7, 2021, turned into an audio podcast so you can listen on the go.

Read Full Article Here:  https://impactpricing.com/blog/how-to-price-hardware-like-its-software/

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

It's true subscription buyers are looking to exchange money for benefits. But what's funny is I so often hear from executives and companies, we need to go subscription, we need to find a way to turn our business model into a subscription. I got to tell you that's very inside-out type thinking. 

That's a company thinking about themselves and what they want. Now mind you, it's a great idea because of valuations for subscription companies are huge compared to more traditional or transactional type businesses.

"Subscription buyers are looking for a clear and easy exchange of money for benefits." - Mark Stiving

But yet, if they want to go subscription, instead of saying, how do we go subscription, we need to flip the script and say, What are the benefits our buyers are buying from us? What are the benefits they expect? And is there this periodic delivery or receipt of benefits that they're getting?

Because that's what we really want to do. Think about Porsche, again, is a great example of this. What are the advantages or benefits to owning a Porsche itself? 

Well, I own a Porsche Well, actually, I don't, but I could own a Porsche because I want the fun of driving one. Or maybe I like the ego of being seen driving one. Or maybe it's because it's in my garage, and it's ready to go.

Anytime I want it. It's right there. And I probably drive it every day or every other day, I drive it a lot. So these are benefits you get when you own a Porsche.

But what about if you subscribe to a Porsche, could you still deliver all those same benefits, we're sure we can deliver the fun of driving one, you can still have the same ego stroke, when you're when you're seeing driving one, you can hold it in your garage and be ready, you can drive it every single day.

All those are great. And in addition to that, they can add even more benefits to the subscription. 

For example, they cover the maintenance, they cover the insurance, you can change out cards, right? If you own your own car, you can't change a 911 for a career up or a 911.

For a Boxster, you've got to have whichever card is that they've got that you bought. And by the way, there's no real commitment. you commit a month at a time. I could go try it, I can see if I like the plan, I can cancel someday. 

Think how hard it is to sell a car and switch cars. If you're really thinking about going to subscription, then what you want to do instead of saying how do we go subscription? Instead ask the question, what are the benefits that my customers expect on a periodic regular basis?

And by the way, what are the hassles that they have on a periodic or regular basis? And can we solve those using a subscription as well.

We hope you enjoyed this memecast. If you see any of our memes that you'd like move to the top of our memecast list, please let me know. If you have any feedback, definitely send it. You can reach me at [email protected]. Now, go make an impact.  

Connect with Mark Stiving:  

• Email: [email protected] 
• LinkedIn 

Jim Broderick is a seasoned Pricing Professional with 20+ years’ experience across Marketing, Product Management/Product Development, Finance, Operations, Data Analysis and Sales; he has a unique ability to view Pricing from all dimensions. He also created and led the Pricing Function at a $500M Manufacturer/Distributor and a $100M Professional Services Company. He works cross functionally to achieve support in building the pricing function, pricing initiatives and overall strategy at the same time he is responsible for price uplift in excess of $50M over a 15-year career. 

In this episode, Jim shares how the different roles he tackled helped him work his way up to being a Pricing executive. How he greatly impacted his business in just over three years is one area he details the process in achieving it. He talks about how value pricing and value selling is at the heart of providing solutions to customers and impacting businesses. 

Why you have to check out today’s podcast: 

• Learn how you can institute a value-selling process with your salespeople so you know your customer’s pain points and find solutions to their problems
• Find out how to see price as a proactive lever rather than a reactive pain point
• Discover the pricing skills and action steps you ought to have and implement to massively impact a business

“You have to talk to your customers. You have to be out from behind the desk, work with the sales people, figure out what makes them tick. How can they drink the Kool Aid that you are pouring in? Because if you can't get to that level, again, all the analysis in the world, if you can't get it in front of the salespeople, in front of the customers, it's a waste of time.” 

- Jim Broderick 

Topics Covered: 

01:20 - From being a carpenter to a VP of Pricing 

02:39 - The affordability of school back then compared to this time 

03:30 - How he started consulting with small businesses 

04:12 - The role he started out in and how he worked his way up to an executive-level Pricing position 

06:03 - How does Excel fare from all the other BI tools around today 

06:55 - The same but different way of writing Math in Tableau or Excel 

08:13 - How changing jobs is like learning a new language and how he uses that idea to solve problems 

09:58 - More than value-based pricing, it’s value-based selling 

11:05 - Seeing value-based pricing years before and how it was achievable 

13:12 - Value drivers are not internal - they have to be external from customers 

15:15 - What he does around value drivers in his own company 

15:58 - Instituting a value-based pricing 

16:51 - How he made a $125 million impact 

20:02 - Instances where you leave money on the table by not communicating your value 

21:09 - Thoughts on compensating salespeople for price increase 

22:53 - Impacting business for over just three years 

Key Takeaways: 

“I like to say when I'm talking to people about Pricing, I'm in the middle of the Rubik's Cube. Everything else is rolling around me. And I'm in the middle of the Rubik's Cube keeping it all together and making sure that the colors are lining up.” - Jim Broderick 

“I think I had the benefit of coming from a Sales background. Because you know, part of what we do is we have to sell our story. We have to sell to the business, why is it important to do things the way we do.” - Jim Broderick 

“If you want to advance to the level of director, or above in the Pricing world, you have to put yourself in front of the business, you have to.” - Jim Broderick 

“I have a saying that I repeat all the time to anyone who will listen to me, we can create the most Math-based, value-based, algorithmic-based price you can come up with, if Sales can't translate that and sell it, it's a waste of time.” - Jim Broderick 

“Identifying value drivers, in a business, quantifying the value drivers, and then training your sales people to change the conversation from price to the value drivers that are important to that customer.” - Jim Broderick 

“Value drivers cannot be internal; value drivers have to be external from the customer.” - Jim Broderick 

“I think that the most important thing [impacting business] is that you have an executive team that sees price as a proactive lever, and not a reactive pain point.” - Jim Broderick 

People/Resources Mentioned: 

• Reed Holden: https://www.holdenadvisors.com/about/leadership/ 

Connect with Jim Broderick: 

• LinkedIn: https://www.linkedin.com/in/jimbroderick1/
• Email: [email protected]

Connect with Mark Stiving:   

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

This is an article published on May 21, 2021, turned into an audio podcast so you can listen on the go.

Read Full Article Here:  https://impactpricing.com/podcast/blogcast-4-pricing-consultant-vs-pricing-advisor-whats-the-difference/

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

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

Think about Netflix for a second. My guess is if you're a Netflix subscriber or Hulu or wherever you get your video, you probably pay the bill every month, and you rarely ask yourself, should I stay with Netflix or not? 

And yet, what do you think happens? When Netflix announces $1 a month price increase? You suddenly ask yourself? 

Is Netflix really worth it? Am I getting the value? Now it's not to say that it's not worth another dollar. But it's to say that you rethink the decision. Were prior to them raising the price. 

You never even thought about that decision. 

"When you raise prices on your current subscribers, you cause them to rethink their decision. Be careful." - Mark Stiving

Now, if you're anything like me, in my old days, I used to pay for a gym membership.

And one of the things I found is even though I paid for a gym membership, I rarely went to the gym, I certainly did not get my money's worth. 

And yet, if they never raise prices, I just keep paying the bill. Don't even think about it, because it's a decision that I had already made someday in the past. 

But imagine what happens the day they say, “Hey, we're gonna raise your prices.”

Oh, now I have to say, you know, “I'm not really using it that much. I'm not getting my value out of it.” 

I think I'll go ahead and unsubscribe or cancel my membership. In other words, when we raise prices on people who are subscribing, we forced them to rethink their purchase decision, where they're not going to rethink it regularly.

Probably not a bad situation. In fact, in many times in subscription businesses, we have the opportunity to raise prices, because we're delivering so much value to our customers. But what about those customers we're not delivering a lot of value to maybe it makes sense to not raise prices on them. 

We hope you enjoyed this memecast. If you see any of our memes that you'd like move to the top of our memecast list, please let me know. If you have any feedback, definitely send it. You can reach me at [email protected]. Now, go make an impact.  

Connect with Mark Stiving:  

• Email: [email protected] 
• LinkedIn 

Steve Rosvold is the founder at CFO.University, a global professional development community dedicated to growing finance leaders by providing tools and learning opportunities suited to individual needs. Its focus is on delivering practical, convenient, performance enhancing learning, economically. Its community is made up of Member-Scholars, Companies, and Trusted Advisors committed to the development of finance leaders. 

In this episode, Steve shares what CFO University hopes to help CFOs in terms of value-based pricing and not just setting the margin, and tapping its influence on the entire company to give more value to the organization. 

Why you have to check out today’s podcast: 

• Find out about CFO University and the education they provide around value-based pricing for CFOs so they become more creative and innovative in providing a more positive influence on pricing to the company
• Learn how Sales, Marketing, and Finance can create a cooperative and collaborative dynamic that boosts value to the company
• Find out where CFOs can find opportunity to learn more value in discrete products and product portfolios that work

“Learn the language of your sales and marketing teams and use that to help define what they need, and go out and get the data for that.”

- Steve Rosvold 

Topics Covered: 

02:17 - What do CFOs generally think about Pricing 

03:30 - CFOs’ reaction to an article published about value-based pricing 

04:53 - The hard work that goes into educating CFOs about value-based pricing 

05:54 - The reason why CFOs don’t emphasize pricing 

08:20 - Learning how to test the value rather than just setting the margin 

09:32 - How the cost part is the CFOs domain in the past 

11:04 - The whole strength of the CFO 

13:16 - What CFOs do a really good job of 

14:46 - Creating a collaborative effort among Sales, Marketing, and Finance 

17:13 - Not doing it the way they should be doing it 

18:32 - What scares people of the CFO 

20:26 - Where CFOs have to learn more about value in pricing 

21:56 - Steve’s pricing advice that will impact your business 

23:27 - When do financial transformation takes place 

Key Takeaways: 

“We're frankly learning about how to test the value, rather than set the margin.” - Steve Rosvold 

“I think that whole customer journey, the Finance teams can help a lot with the data they have, and help influence and really give insight to the marketing, the pricing, and marketing teams.” - Steve Rosvold 

“There's been a kind of a contentious dynamic where it really should be very cooperative and collaborative. And then if we get to that point, now we've got this super power being created between Finance and Sales, and Marketing that boost value in companies.”  - Steve Rosvold 

“The whole idea of looking at net present values and future cash flows, we're great at that, but that's the big picture, looking at other companies. When it comes to these discrete products that we're selling, and trying to put a portfolio of products together that works, I think CFOs aren't very strong in that generally. And there's an opportunity there.” - Steve Rosvold 

“Transformation takes place when value goes up, and costs go down. It's two levers and both have to happen. So, we're really forcing Finance people to really get on the value side of things, whether that's products or their services or systems or whatever.” - Steve Rosvold 

People/Resources Mentioned: 

• Andrew Codd

Connect with Steve Rosvold: 

• Website: https://cfo.university/ 
• LinkedIn: https://www.linkedin.com/in/steverosvold/

Connect with Mark Stiving: 

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