Impact Pricing

Is subscription a business model or payment model? Probably the easiest example to think through is Porsche. 

Yes, you can subscribe to a Porsche. 

But before I describe that to you, let me talk about buying a Porsche. Let's say you want to go buy one, there are four different payment models that you could use. 

You could pay cash, you could take out a loan from a bank, you could take out a loan from the dealership who's selling you the car, and you could lease the vehicle.  

“Subscription is a business model, not a payment model. ” - Mark Stiving  

Now, leasing may not be exactly ownership, but it acts almost exactly like owning the vehicle. In each of these four cases, the experience from the consumer is almost identical when it comes to the product. The only thing that's different is how we ended up paying for it.  

But now let's jump to the subscription. In Atlanta for sure, you can subscribe to a Porsche for a measly 2000 or $3,000 a month, you can drive any Porsche you want, any day you want. That's pretty cool. They'll even cover all the maintenance fees, they'll pay for the insurance, you're simply paying for the right to drive a Porsche whenever you want.  

Notice that's a very different experience than owning a Porsche.  

Can you think through what are the benefits that your buyers are expecting when they buy your product and use your product?

And is it possible that we could, we can take that product and that series of benefits that they're truly looking for, and deliver the benefits to them without requiring them to own our product?  

And then could we deliver those benefits so it's a stream of benefits?

And the stream of benefits never ends, it goes on forever. In that case, maybe our buyers will pay us forever. 

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

Jon Jennings is the Founder and Managing Partner of Jennings Executive Search, LLC. He began his career with a boutique recruiting firm, building relationships with C-Level accounting and finance professionals utilizing a research-based approach of study and analysis to best serve his clients. 

In 2012, Jon took this approach to a larger firm where he worked with several CFOs to build entire accounting and finance departments and gain a large firm perspective in how to build a successful practice. This experience led to the creation of Jennings Executive Search, LLC. 

In this episode, Jon talks about how he matches pricing talents depending on a strategy the company uses and each company’s preferences, what screening process he uses when looking for pricing people.  He also shares how he guides companies in choosing the best pricing leader they can get as sometimes they don’t know what they are looking for. He also emphasizes on skill sets a pricing person should develop and acquire early on as he starts to elevate his career along the way. 

Why you have to check out today’s podcast: 

• Learn how to build out your skillset as a pricing person so you get more relevant in today’s competitive world of pricing
• Find someone who knows Pricing people if you are looking to hire Pricing leaders
• Discover how to find Pricing people that match your company’s strategies to get a good fit to impact the business

“Think about what you're leaving on the table. If you're not trying to be creative around pricing, you're losing. If you're not thinking about ways to add some sort of dynamic element in trying to find ways to increase profitability from that standpoint, then someone else is.” 

- Jon Jennings 

Topics Covered: 

01:39 - How he got into Pricing 

03:15 - What do they focus on when hiring Pricing people 

03:50 - How the company’s strategy matter when hiring Pricing people 

05:42 - Delineation of roles among Pricing analyst, the VP, and the middle level 

07:03 - HIs screening when looking for Pricing leaders 

08:37 - How they provide guidance to companies when looking for Pricing leaders 

09:39 - Building off of the job description, value-based principles, and the roadmap of the company to find potential Pricing leaders 

11:53 - How he helps clients find Pricing people 

13:49 - Starting with questions to convince a company to hire a pricing person 

15:10 - Suggesting to companies to listen to Impact Pricing   

15:32 - How value-based pricing makes sense in the world of recruitment 

16:48 - Skillset you need to build as a pricing person early on in your career 

18:16 - What more you can do to expand your capabilities as a Pricing person 

19:40 - Beg, borrow and steal 

20:44 - Be a driver and not a whiner 

21:06 - Are pricing people well compensated 

22:37 - Setting differentiators for Pricing persons to match with client companies preferences 

23:48 - Setting expectations for yourself and executing it 

25:20 - The strengths and weaknesses of a consulting talent 

27:15 - HIs impactful advice to help you in your business 

Key Takeaways: 

“Our job is to find people who make impacts with fitting culturally and have a history of really impacting the business.” - Jon Jennings 

“It's really about me kind of telling them [client companies] a story, and asking questions to see if I can guide them to a more dynamic solution if they're not already there.”  - Jon Jennings 

“I always start with questions. Because I can't give advice without context.”  - Jon Jennings 

“If I'm advising someone, I have to build out their skill set. There's a couple of elements that you want especially nowadays. Get into as much data science as you can, teach yourself coding. It doesn't matter, as you get to higher levels, obviously, you're not going to utilize that as much, but you're going to still use that a little bit.”  - Jon Jennings 

“As you move up the organization, it's about reaching out across company lines, and not being afraid to go talk to the marketing person, pick people's brains. Try to expand that knowledge as much as you can and just always be learning. That's how you can elevate your career.”  - Jon Jennings 

“Be a driver. Don't be afraid to challenge above you. If you believe in your concept, just be the squeaky wheel until you get some traction.”   - Jon Jennings 

“Being mindful of constantly trying to improve your strategy and looking at competitive advantage and all different elements is 100% key.”  - Jon Jennings 

Resources / People mentioned: 

• Professional Pricing Society
• McKinsey
• BCG

Connect with Jon Jennings: 

• www.jenningsexec.com
• LinkedIn
• Email: [email protected]

Connect with Mark Stiving: 

• Email: [email protected]   
• LinkedIn

Jon Jennings is the Founder and Managing Partner of Jennings Executive Search, LLC. He began his career with a boutique recruiting firm, building relationships with C-Level accounting and finance professionals utilizing a research-based approach of study and analysis to best serve his clients. 

In 2012, Jon took this approach to a larger firm where he worked with several CFOs to build entire accounting and finance departments and gain a large firm perspective in how to build a successful practice. This experience led to the creation of Jennings Executive Search, LLC. 

In this episode, Jon talks about how he matches pricing talents depending on a strategy the company uses and each company’s preferences, what screening process he uses when looking for pricing people.  He also shares how he guides companies in choosing the best pricing leader they can get as sometimes they don’t know what they are looking for. He also emphasizes on skill sets a pricing person should develop and acquire early on as he starts to elevate his career along the way. 

Why you have to check out today’s podcast: 

• Learn how to build out your skillset as a pricing person so you get more relevant in today’s competitive world of pricing
• Find someone who knows Pricing people if you are looking to hire Pricing leaders
• Discover how to find Pricing people that match your company’s strategies to get a good fit to impact the business

“Think about what you're leaving on the table. If you're not trying to be creative around pricing, you're losing. If you're not thinking about ways to add some sort of dynamic element in trying to find ways to increase profitability from that standpoint, then someone else is.” 

- Jon Jennings 

Topics Covered: 

01:39 - How he got into Pricing 

03:15 - What do they focus on when hiring Pricing people 

03:50 - How the company’s strategy matter when hiring Pricing people 

05:42 - Delineation of roles among Pricing analyst, the VP, and the middle level 

07:03 - HIs screening when looking for Pricing leaders 

08:37 - How they provide guidance to companies when looking for Pricing leaders 

09:39 - Building off of the job description, value-based principles, and the roadmap of the company to find potential Pricing leaders 

11:53 - How he helps clients find Pricing people 

13:49 - Starting with questions to convince a company to hire a pricing person 

15:10 - Suggesting to companies to listen to Impact Pricing   

15:32 - How value-based pricing makes sense in the world of recruitment 

16:48 - Skillset you need to build as a pricing person early on in your career 

18:16 - What more you can do to expand your capabilities as a Pricing person 

19:40 - Beg, borrow and steal 

20:44 - Be a driver and not a whiner 

21:06 - Are pricing people well compensated 

22:37 - Setting differentiators for Pricing persons to match with client companies preferences 

23:48 - Setting expectations for yourself and executing it 

25:20 - The strengths and weaknesses of a consulting talent 

27:15 - HIs impactful advice to help you in your business 

Key Takeaways: 

“Our job is to find people who make impacts with fitting culturally and have a history of really impacting the business.” - Jon Jennings 

“It's really about me kind of telling them [client companies] a story, and asking questions to see if I can guide them to a more dynamic solution if they're not already there.”  - Jon Jennings 

“I always start with questions. Because I can't give advice without context.”  - Jon Jennings 

“If I'm advising someone, I have to build out their skill set. There's a couple of elements that you want especially nowadays. Get into as much data science as you can, teach yourself coding. It doesn't matter, as you get to higher levels, obviously, you're not going to utilize that as much, but you're going to still use that a little bit.”  - Jon Jennings 

“As you move up the organization, it's about reaching out across company lines, and not being afraid to go talk to the marketing person, pick people's brains. Try to expand that knowledge as much as you can and just always be learning. That's how you can elevate your career.”  - Jon Jennings 

“Be a driver. Don't be afraid to challenge above you. If you believe in your concept, just be the squeaky wheel until you get some traction.”   - Jon Jennings 

“Being mindful of constantly trying to improve your strategy and looking at competitive advantage and all different elements is 100% key.”  - Jon Jennings 

Resources / People mentioned: 

• Professional Pricing Society
• McKinsey
• BCG

Connect with Jon Jennings: 

• www.jenningsexec.com
• LinkedIn
• Email: [email protected]

Connect with Mark Stiving: 

• Email: [email protected]   
• LinkedIn

On April 20, 2021, the Wall Street Journal published an article titled  Procter & Gamble Will Raise Prices in September.

Here are the first three sentences:  

Procter & Gamble Co. this fall will start charging more for household staples from diapers to tampons, the latest and biggest consumer-products company to announce price hikes.  The maker of Gillette razors and Tide detergent cited rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods.  The announcement, which came as P&G disclosed its quarterly financial results, follows a similar move last month by rival Kimberly-Clark Corp.

“Blame costs. Announce your price increases. And watch your competitors.”- Mark Stiving

In these three sentences are three incredible lessons on raising prices.  

Lesson 1: Blame costs

Costs probably did go up, but I would bet the costs went up much less than the price.  Costs are pretty much the only reason customers accept for price increases.  The truth is probably closer to this sentence.  “P&G will raise prices so they can make more profit because they believe their customers are willing to pay more.”  It’s probably true, but they could never say that.  

Lesson 2: Announce your price increases

Notice that last month Kimberly-Clark announced a price increase (and they blamed increasing costs).  Their price increase isn’t due to take effect until late June.  Since I’m writing brutally honest news copy, this is what their news release could have said, “KC is announcing a price increase for late June, but they will only implement it if competitors like P&G also agree to a price increase.”  To say this out loud is a violation of the law.  It is illegal to collude with competitors.  But the implication is there.  

Lesson 3: Watch for competitor price increases – Decide carefully

P&G likely saw the KC announcement and thought, “we could raise prices or we could keep prices low and take some additional market share.”  But what would happen if they didn’t raise their prices?  KC likely would not have gone through with their price increase and market shares don’t change.  However, if P&G raises their prices, KC goes through with their price increase, market shares still don’t change, and everyone makes more money.  This is called implicit collusion.  Nobody talked to anybody, they just made assumptions about how the other company would act.  

It is possible that I am completely wrong on this.  It is possible that costs really did go up.  That both KC and P&G independently and myopically decided to raise their prices for the sole purpose of covering their costs. But that doesn’t negate the lessons.  Blame costs, announce your price increases and watch your competitors.  

Resource Mentioned:

• Procter & Gamble Will Raise Prices in September

Read Full Article Here: impactpricing.com/blog/three-lessons-from-a-pg-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

On April 20, 2021, the Wall Street Journal published an article titled  Procter & Gamble Will Raise Prices in September.

Here are the first three sentences:  

Procter & Gamble Co. this fall will start charging more for household staples from diapers to tampons, the latest and biggest consumer-products company to announce price hikes.  The maker of Gillette razors and Tide detergent cited rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods.  The announcement, which came as P&G disclosed its quarterly financial results, follows a similar move last month by rival Kimberly-Clark Corp.

“Blame costs. Announce your price increases. And watch your competitors.”- Mark Stiving

In these three sentences are three incredible lessons on raising prices.  

Lesson 1: Blame costs

Costs probably did go up, but I would bet the costs went up much less than the price.  Costs are pretty much the only reason customers accept for price increases.  The truth is probably closer to this sentence.  “P&G will raise prices so they can make more profit because they believe their customers are willing to pay more.”  It’s probably true, but they could never say that.  

Lesson 2: Announce your price increases

Notice that last month Kimberly-Clark announced a price increase (and they blamed increasing costs).  Their price increase isn’t due to take effect until late June.  Since I’m writing brutally honest news copy, this is what their news release could have said, “KC is announcing a price increase for late June, but they will only implement it if competitors like P&G also agree to a price increase.”  To say this out loud is a violation of the law.  It is illegal to collude with competitors.  But the implication is there.  

Lesson 3: Watch for competitor price increases – Decide carefully

P&G likely saw the KC announcement and thought, “we could raise prices or we could keep prices low and take some additional market share.”  But what would happen if they didn’t raise their prices?  KC likely would not have gone through with their price increase and market shares don’t change.  However, if P&G raises their prices, KC goes through with their price increase, market shares still don’t change, and everyone makes more money.  This is called implicit collusion.  Nobody talked to anybody, they just made assumptions about how the other company would act.  

It is possible that I am completely wrong on this.  It is possible that costs really did go up.  That both KC and P&G independently and myopically decided to raise their prices for the sole purpose of covering their costs. But that doesn’t negate the lessons.  Blame costs, announce your price increases and watch your competitors.  

Resource Mentioned:

• Procter & Gamble Will Raise Prices in September

Read Full Article Here: impactpricing.com/blog/three-lessons-from-a-pg-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

Pricing metrics really should be correlated with your customer's value metrics.

First off, what's a pricing metric?

A pricing metric is what you charge for. If you're salesforce.com, you are charged by the person.

If you're Dropbox, you might charge by the terabyte of storage. You might charge by the click, you might charge by the view or the exposure. There are lots of things we can choose to charge by, you have to make a decision, what are you going to charge for? That's your pricing metric.  

“The best pricing metrics are highly correlated with users’ value metrics. ” - Mark Stiving  

Well, how do you make that decision? One really important thing to think about is, is it correlated with your customers value metric? A value metric then, is how does your customer measure the value of your product. 

I like to play a little game with my clients and I say, "Fill in the following blanks. My customers love me because they're blank went from blank to blank." That could be their turnover went from 8% to 6%. That could be their productivity went from 1000 units per hour to 1200 units per hour. There's some metric they're using that they're saying, "Hey, when we use your product, it really helps us in this area, and here's how we measure that."  

The great thing about having a pricing metric that somehow highly correlated with our buyers value metric is as our buyers get more and more value, we end up getting paid more, and our buyers don't mind because they're getting all that value.  

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

Pricing metrics really should be correlated with your customer's value metrics.

First off, what's a pricing metric?

A pricing metric is what you charge for. If you're salesforce.com, you are charged by the person.

If you're Dropbox, you might charge by the terabyte of storage. You might charge by the click, you might charge by the view or the exposure. There are lots of things we can choose to charge by, you have to make a decision, what are you going to charge for? That's your pricing metric.  

“The best pricing metrics are highly correlated with users’ value metrics. ” - Mark Stiving  

Well, how do you make that decision? One really important thing to think about is, is it correlated with your customers value metric? A value metric then, is how does your customer measure the value of your product. 

I like to play a little game with my clients and I say, "Fill in the following blanks. My customers love me because they're blank went from blank to blank." That could be their turnover went from 8% to 6%. That could be their productivity went from 1000 units per hour to 1200 units per hour. There's some metric they're using that they're saying, "Hey, when we use your product, it really helps us in this area, and here's how we measure that."  

The great thing about having a pricing metric that somehow highly correlated with our buyers value metric is as our buyers get more and more value, we end up getting paid more, and our buyers don't mind because they're getting all that value.  

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

Matt Johnston is the Founder and CEO of EPIC Conjoint. As a highly motivated seasoned commercial marketing professional possessing 25 years Pricing, Product and Segmentation experience with Tier 1 brands in Europe, North America, MENA and Southeast Asia, he is a huge fan of conjoint analysis but massively frustrated with the time, effort and cost barriers to conducting a conjoint study. So, instead of grumbling about its limitations, he designed and developed his own rapid conjoint platform EPIC Conjoint.

In this episode, Matt talks about the confidence and reassurance conjoint study provides in coming up with crucial pricing decisions. And how it helps you differentiate from competitors. He also shares how he started EPIC Conjoint to provide a simple, fast, and inexpensive conjoint study.

Why you have to check out today’s podcast:

• Find out a more cost-effective conjoint analysis to help in your company’s pricing decisions
• Find out how conjoint analysis not only help in pricing decisions on new products and services but also on the existing product context
• Discover how close to the truth you can get in terms of assurance that is statistically significant to your pricing decisions

“It's always very important to look at the transactional data, the behavioral data, the previous data that will inform your assumptions. But then cap it off by asking the customer.” 

- Matt Johnston

Topics Covered:

00:57 - How it was like starting his pricing career at Comedy Central

01:26 - An Impact partner in the course creation

03:03 - A funny story of how Matt started in Pricing

04:43 - How most pricing people never started with a pricing role

05:45 - What made start EPIC Conjoint

07:13 - The budget and the investment involved in designing conjoint analysis

08:41 - What drove the timing to put up EPICConjoint

10:18 - Bringing automation and rigor into the pricing process

14:31 - What do you need EPIC conjoint for

18:04 - How EPIC conjoint gives you an amazing capability to differentiate yourself based on value

19:32 - How conjoint captures price sensitivity

19:57 - Conjoint analysis being a big help in B2B companies

21:38 - How close to the truth can you get with conjoint analysis

22:15 - Matt’s impactful pricing advice on your business

Key Takeaways:

“The point I'm trying to make is, actually there are a lot more use cases that you can apply conjoint to because it is a trade-off methodology.” - Matt Johnston

“We capture that price sensitivity as well, in conjoint, at a segment level so you do see it, you can see that change.” - Matt Johnston

“It [Conjoint] can keep the middlemen honest even within your organizations, the sales folks, it can keep them on as to where you can leapfrog them and actually check and see what exactly the customers are saying.” - Matt Johnston

“The comfort and the confidence of launching them - new products or making price changes. Having done a conjoint, having been in that situation, is priceless.”  - Matt Johnston

Resources Mentioned:

• Van Westendorp
• O2 plc
• Telefonica
• Vodafone
• Sky News
• New York Times Company
• Tribune Company

Connect with Matt Johnston:

• Epicconjoint.com
• LinkedIn
• Email: [email protected]

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn

Matt Johnston is the Founder and CEO of EPIC Conjoint. As a highly motivated seasoned commercial marketing professional possessing 25 years Pricing, Product and Segmentation experience with Tier 1 brands in Europe, North America, MENA and Southeast Asia, he is a huge fan of conjoint analysis but massively frustrated with the time, effort and cost barriers to conducting a conjoint study. So, instead of grumbling about its limitations, he designed and developed his own rapid conjoint platform EPIC Conjoint.

In this episode, Matt talks about the confidence and reassurance conjoint study provides in coming up with crucial pricing decisions. And how it helps you differentiate from competitors. He also shares how he started EPIC Conjoint to provide a simple, fast, and inexpensive conjoint study.

Why you have to check out today’s podcast:

• Find out a more cost-effective conjoint analysis to help in your company’s pricing decisions
• Find out how conjoint analysis not only help in pricing decisions on new products and services but also on the existing product context
• Discover how close to the truth you can get in terms of assurance that is statistically significant to your pricing decisions

“It's always very important to look at the transactional data, the behavioral data, the previous data that will inform your assumptions. But then cap it off by asking the customer.” 

- Matt Johnston

Topics Covered:

00:57 - How it was like starting his pricing career at Comedy Central

01:26 - An Impact partner in the course creation

03:03 - A funny story of how Matt started in Pricing

04:43 - How most pricing people never started with a pricing role

05:45 - What made start EPIC Conjoint

07:13 - The budget and the investment involved in designing conjoint analysis

08:41 - What drove the timing to put up EPICConjoint

10:18 - Bringing automation and rigor into the pricing process

14:31 - What do you need EPIC conjoint for

18:04 - How EPIC conjoint gives you an amazing capability to differentiate yourself based on value

19:32 - How conjoint captures price sensitivity

19:57 - Conjoint analysis being a big help in B2B companies

21:38 - How close to the truth can you get with conjoint analysis

22:15 - Matt’s impactful pricing advice on your business

Key Takeaways:

“The point I'm trying to make is, actually there are a lot more use cases that you can apply conjoint to because it is a trade-off methodology.” - Matt Johnston

“We capture that price sensitivity as well, in conjoint, at a segment level so you do see it, you can see that change.” - Matt Johnston

“It [Conjoint] can keep the middlemen honest even within your organizations, the sales folks, it can keep them on as to where you can leapfrog them and actually check and see what exactly the customers are saying.” - Matt Johnston

“The comfort and the confidence of launching them - new products or making price changes. Having done a conjoint, having been in that situation, is priceless.”  - Matt Johnston

Resources Mentioned:

• Van Westendorp
• O2 plc
• Telefonica
• Vodafone
• Sky News
• New York Times Company
• Tribune Company

Connect with Matt Johnston:

• Epicconjoint.com
• LinkedIn
• Email: [email protected]

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn

Understanding your customers' decisions is fundamental to value based pricing, especially in subscriptions.  

When we think about our customers' decisions, especially in subscriptions, we want to break it up into those three different revenue buckets we talk about - Win, Keep, and Grow.

When we're trying to win a customer, a customer's making those "Will I and which one" decisions, you've probably heard me talk about those two topics or those two decisions on ad nauseum. And if you haven't, you'll find tons of content, and one of these days I'll do a memecast on those as well.  

But keeping, if we want to keep customers, what's the decision they're making? Most often, they're actually not making a decision at all. They're just using our product, they're just writing us checks or letting the credit card go through. 

“Understanding your customers' decisions is fundamental to value-based pricing, especially in subscriptions. ” - Mark Stiving  

The last bucket, grow, has a ton of different decisions that we need to focus on. Because maybe we want to raise prices on them, that's drawing attention and making them rethink. But, have we provided enough value that we're pretty confident they're not going to turn out?  

What about usage, maybe we can get them to use more? As they use more, they're willing to pay us more, and they say, "Hey, that seems fair." That's a decision that they have to make. Maybe we want them to buy more from us. Maybe we want them to upgrade into a new product or buy a different product from us. This is us thinking about the decisions our buyers are making.  

Value-based pricing is always putting yourself in the mind of your buyer. In subscriptions, there are several different decisions your customers have to make in that relationship lifecycle. And we want to think about each one of those decisions.  

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, or if you have any feedback, please email me, [email protected]. Now, go make an impact. 

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn