Impact Pricing

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

Lindsay Duran is the Chief Marketing Officer at Zilliant. Over the course of her career, she focused on uncovering inefficient and sub-optimal processes and actively worked to solve those challenges with creativity, whether it's developing a new go-to-market methodology, revamping a marketing organization, or, in her current role, helping clients realize better financial results through artificial intelligence and sales rep enablement.

In this episode, Lindsay talks about what Zilliant does in terms of providing a pricing system that helps you how to price your products, more effectively manage your customer price agreements, and point your salespeople to the actions that are going to drive the most revenue and margin growth and systematically do that.

Why you have to check out today’s podcast:

• Learn how Zilliant’s pricing system can calculate and measure price elasticity for the different segments to come up with price optimization for the goal you are trying to achieve for the said price
• Find out how to pinpoint the best selling price to charge given the complexity of pricing decision in every selling circumstance
• Find out the problems Zilliant can help you with to effectively and efficiently deal with pricing decisions that drive revenue growth

“Stop relying on spreadsheets. Spending your time manipulating data in spreadsheets and trying to execute price changes in spreadsheets is underselling the value of pricing professional.”

- Lindsay Duran

Topics Covered:

01:30 - What led Lindsay into pricing

02:00 - The mix of roles she held at Zilliant

02:46 - Thoughts about ‘product marketing and product management people

03:06 - The bias to over discount

04:06 - What does Zilliant do?

07:45 - Elaborating on segmentation and willingness to pay of customers

10:27 - Giving her thoughts on price elasticity

14:48 - What is the digital transformation of sales

18:36 - Why do we still need salespeople in the online sales setting

21:07 - Salespeople and price negotiations

24:24 - Helping customers’ handling of thresholds and rules

30:03 - The problems Zilliant solves

30:42 - Lindsay’s one piece of pricing advice that will greatly impact your business

Key Takeaways:

“What we do at Zilliant, as we help companies using software and using data, and Data Science, figure out what is the best price that they should charge in every selling circumstance. And then we help companies figure out how to manage all of the processes that go along with setting, updating, executing prices in the market.” - Lindsay Duran

“For those that like to argue that price elasticity can't be measured, I would encourage everyone to raise their prices by 50, 100, 200% and see what happens to their volume. There is a point at which you are past the profit-maximizing price, and that your volume is going to drop off and go to zero if you are too far out of the market.”  - Lindsay Duran

“Digital transformation is seeing it on two fronts. It's the shift to e-commerce and the need to provide salespeople with more Data-Science-driven guidance, to help them be more effective at their job and ultimately meet customer expectations.” - Lindsay Duran

“It's really up to the strategy of the company as to how they want to handle those thresholds and rules and we're simply there to not tell them how to approach that but make that work systematically so that the outcome is what they've requested.” - Lindsay Duran

“As much as you can rely on data and technology to do some of that very heavy lift, often not value add, but critical steps. You can spend more of your time on the actual pricing strategy portion of it and figuring out the opportunities where you have the biggest areas of impact and where you need to focus your time that isn't on all of that kind of manual data manipulation that so many people get mired in.” - Lindsay Duran

Connect with Lindsay Duran:

• LinkedIn
• E: [email protected]

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn

Lindsay Duran is the Chief Marketing Officer at Zilliant. Over the course of her career, she focused on uncovering inefficient and sub-optimal processes and actively worked to solve those challenges with creativity, whether it's developing a new go-to-market methodology, revamping a marketing organization, or, in her current role, helping clients realize better financial results through artificial intelligence and sales rep enablement.

In this episode, Lindsay talks about what Zilliant does in terms of providing a pricing system that helps you how to price your products, more effectively manage your customer price agreements, and point your salespeople to the actions that are going to drive the most revenue and margin growth and systematically do that.

Why you have to check out today’s podcast:

• Learn how Zilliant’s pricing system can calculate and measure price elasticity for the different segments to come up with price optimization for the goal you are trying to achieve for the said price
• Find out how to pinpoint the best selling price to charge given the complexity of pricing decision in every selling circumstance
• Find out the problems Zilliant can help you with to effectively and efficiently deal with pricing decisions that drive revenue growth

“Stop relying on spreadsheets. Spending your time manipulating data in spreadsheets and trying to execute price changes in spreadsheets is underselling the value of pricing professional.”

- Lindsay Duran

Topics Covered:

01:30 - What led Lindsay into pricing

02:00 - The mix of roles she held at Zilliant

02:46 - Thoughts about ‘product marketing and product management people

03:06 - The bias to over discount

04:06 - What does Zilliant do?

07:45 - Elaborating on segmentation and willingness to pay of customers

10:27 - Giving her thoughts on price elasticity

14:48 - What is the digital transformation of sales

18:36 - Why do we still need salespeople in the online sales setting

21:07 - Salespeople and price negotiations

24:24 - Helping customers’ handling of thresholds and rules

30:03 - The problems Zilliant solves

30:42 - Lindsay’s one piece of pricing advice that will greatly impact your business

Key Takeaways:

“What we do at Zilliant, as we help companies using software and using data, and Data Science, figure out what is the best price that they should charge in every selling circumstance. And then we help companies figure out how to manage all of the processes that go along with setting, updating, executing prices in the market.” - Lindsay Duran

“For those that like to argue that price elasticity can't be measured, I would encourage everyone to raise their prices by 50, 100, 200% and see what happens to their volume. There is a point at which you are past the profit-maximizing price, and that your volume is going to drop off and go to zero if you are too far out of the market.”  - Lindsay Duran

“Digital transformation is seeing it on two fronts. It's the shift to e-commerce and the need to provide salespeople with more Data-Science-driven guidance, to help them be more effective at their job and ultimately meet customer expectations.” - Lindsay Duran

“It's really up to the strategy of the company as to how they want to handle those thresholds and rules and we're simply there to not tell them how to approach that but make that work systematically so that the outcome is what they've requested.” - Lindsay Duran

“As much as you can rely on data and technology to do some of that very heavy lift, often not value add, but critical steps. You can spend more of your time on the actual pricing strategy portion of it and figuring out the opportunities where you have the biggest areas of impact and where you need to focus your time that isn't on all of that kind of manual data manipulation that so many people get mired in.” - Lindsay Duran

Connect with Lindsay Duran:

• LinkedIn
• E: [email protected]

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn

The secrets to a successful subscription really are to win, keep, and grow. Traditional companies meaning those that are typically transaction-oriented, know about winning. And in fact, subscription companies have to win customers as well.  

Now, subscription companies also relatively quickly learn what it's like to keep a customer.

Because if they're not focused on keeping customers, that customer retention piece, they quickly go out of business, their customer acquisition costs exceed the amount of revenue or profit they can get from any individual new customer.  

“The secrets to a successful subscription business - Win, Keep, and Grow.”

- Mark Stiving

Subscription companies get the key part of win, keep, and grow, as well. However, most companies overlook the grow part. And grow means, "Can you get a customer to pay you more next year than they paid you last year?"

And that doesn't necessarily mean raise prices. It may mean that they use more, it may mean that they upgraded, it may mean that they added more capabilities, it may mean that they bought something else. And yes, it may mean that you raised prices. 

Zoom, when they went public if you took the set of customers they had a year before they went public, that exact same set of customers paid them 40% more the following year. This is amazing. And that's really the goal. If you want to be a real successful subscription company, you need to grow, and you need to keep, and you need to win. The secrets then, win, keep, and grow. You need to focus on all three of these revenue buckets, but you need to focus on each one individually.  

If you've seen any of our memes that you'd like to 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

The secrets to a successful subscription really are to win, keep, and grow. Traditional companies meaning those that are typically transaction-oriented, know about winning. And in fact, subscription companies have to win customers as well.  

Now, subscription companies also relatively quickly learn what it's like to keep a customer.

Because if they're not focused on keeping customers, that customer retention piece, they quickly go out of business, their customer acquisition costs exceed the amount of revenue or profit they can get from any individual new customer.  

“The secrets to a successful subscription business - Win, Keep, and Grow.”

- Mark Stiving

Subscription companies get the key part of win, keep, and grow, as well. However, most companies overlook the grow part. And grow means, "Can you get a customer to pay you more next year than they paid you last year?"

And that doesn't necessarily mean raise prices. It may mean that they use more, it may mean that they upgraded, it may mean that they added more capabilities, it may mean that they bought something else. And yes, it may mean that you raised prices. 

Zoom, when they went public if you took the set of customers they had a year before they went public, that exact same set of customers paid them 40% more the following year. This is amazing. And that's really the goal. If you want to be a real successful subscription company, you need to grow, and you need to keep, and you need to win. The secrets then, win, keep, and grow. You need to focus on all three of these revenue buckets, but you need to focus on each one individually.  

If you've seen any of our memes that you'd like to 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

Jon Manning is the Head of Pricing / Chief Economist at MYOB and Author of "Overcoming Floccinaucinihilipilification: Valuing and Monetizing Products and Services". His career has been a journey through the most commonly used pricing methodologies: the cryptic world of oil industry pricing, cost-plus pricing in catering & consumer packaged goods, revenue/yield management in aviation, travel & tourism, and dynamic pricing in internet cafes on the High Streets of the EU and USA.

In this episode, Jon shares that more than relying on Twitter and Facebook likes, especially with startup companies, it's essential to have a pricing model at the start, so you provide and create value at the onset. He talks about the book and how it tackles the end-to-end journey in the world of value creation, understanding, monetization, and communication of value.

Why you have to check out today's podcast:

• Discover and understand the value-based pricing canvas so you can provide value even at the start of your business
• Learn to identify the sources of value in your product and services to define your value proposition clearly
• Find out how you can be focused on value creation but making it more powerful with behavioral economics in consideration

"It's all about value, really. So, just make sure you understand the value. And if you're monetizing value you just can't go wrong."

- Jon Manning

Topics Covered:

01:25 - Talking about Jon's book: Overcoming Floccinaucinihilipilification

03:40 - How does a crowdsourcing website work for Pricing Prophets?

06:35 - What is a value-based pricing canvas as the main gist of Jon's book

08:30 - How each cell in a canvas work

10:34 - Talking about the internal pricing processes and customer-facing processes in the pricing canvas

13:18 - Where creating value appears in the book

15:28 - Talking about the second half of the book about customer value analysis

16:43 - Why Jon put behavioral economics at the last part of the book

20:24 - Sharing an exciting experience where behavioral economics is concerned

21:36 - What got Jon started in Pricing

22:38 - The best pricing advice Jon shares that can have a significant impact in your business

Key Takeaways:

“What's really been interesting is that sort of six, seven years down the track, when I go into those workshops now, nine out of 10 businesses do have a pricing model when they start. They realize they provide value from day one.” - Jon Manning

“The first part of the book is to make use of the canvas to identify the sources of value in your product or service. And that's a collection of approximately about 15 quadrants which will help you be able to clearly define your value proposition, the economic value you provide, how you stack up against the competition and things like that.” - Jon Manning

“The second half of the book then says, okay, let's take your understanding of value now. And let's actually strike a price point for you based on one of four value-based pricing methodologies. So, it's a sort of end-to-end journey.” - Jon Manning

“One of the methodologies I walked through in the second half of the book is customer value analysis. And I only talk about a very basic version of customer value analysis, but just through that exercise, and other methodologies that other authors have written about, you can quickly identify features that should be included or excluded from a package if you're asking the right questions to customers.” - Jon Manning

“I like behavioral economics, it is useful. I agree that it should be value first, behavioral economics second, but it can also be powerful at the same time.” - Jon Manning

People/Resources mentioned:

• Overcoming Floccinaucinihilipilification: Valuing and Monetizing Products and Services by Jon Manning
• Zen Ore
• 99 Designs

Connect with Jon Manning:

• https://pricingprophets.com/
• LinkedIn

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn

Jon Manning is the Head of Pricing / Chief Economist at MYOB and Author of "Overcoming Floccinaucinihilipilification: Valuing and Monetizing Products and Services". His career has been a journey through the most commonly used pricing methodologies: the cryptic world of oil industry pricing, cost-plus pricing in catering & consumer packaged goods, revenue/yield management in aviation, travel & tourism, and dynamic pricing in internet cafes on the High Streets of the EU and USA.

In this episode, Jon shares that more than relying on Twitter and Facebook likes, especially with startup companies, it's essential to have a pricing model at the start, so you provide and create value at the onset. He talks about the book and how it tackles the end-to-end journey in the world of value creation, understanding, monetization, and communication of value.

Why you have to check out today's podcast:

• Discover and understand the value-based pricing canvas so you can provide value even at the start of your business
• Learn to identify the sources of value in your product and services to define your value proposition clearly
• Find out how you can be focused on value creation but making it more powerful with behavioral economics in consideration

"It's all about value, really. So, just make sure you understand the value. And if you're monetizing value you just can't go wrong."

- Jon Manning

Topics Covered:

01:25 - Talking about Jon's book: Overcoming Floccinaucinihilipilification

03:40 - How does a crowdsourcing website work for Pricing Prophets?

06:35 - What is a value-based pricing canvas as the main gist of Jon's book

08:30 - How each cell in a canvas work

10:34 - Talking about the internal pricing processes and customer-facing processes in the pricing canvas

13:18 - Where creating value appears in the book

15:28 - Talking about the second half of the book about customer value analysis

16:43 - Why Jon put behavioral economics at the last part of the book

20:24 - Sharing an exciting experience where behavioral economics is concerned

21:36 - What got Jon started in Pricing

22:38 - The best pricing advice Jon shares that can have a significant impact in your business

Key Takeaways:

“What's really been interesting is that sort of six, seven years down the track, when I go into those workshops now, nine out of 10 businesses do have a pricing model when they start. They realize they provide value from day one.” - Jon Manning

“The first part of the book is to make use of the canvas to identify the sources of value in your product or service. And that's a collection of approximately about 15 quadrants which will help you be able to clearly define your value proposition, the economic value you provide, how you stack up against the competition and things like that.” - Jon Manning

“The second half of the book then says, okay, let's take your understanding of value now. And let's actually strike a price point for you based on one of four value-based pricing methodologies. So, it's a sort of end-to-end journey.” - Jon Manning

“One of the methodologies I walked through in the second half of the book is customer value analysis. And I only talk about a very basic version of customer value analysis, but just through that exercise, and other methodologies that other authors have written about, you can quickly identify features that should be included or excluded from a package if you're asking the right questions to customers.” - Jon Manning

“I like behavioral economics, it is useful. I agree that it should be value first, behavioral economics second, but it can also be powerful at the same time.” - Jon Manning

People/Resources mentioned:

• Overcoming Floccinaucinihilipilification: Valuing and Monetizing Products and Services by Jon Manning
• Zen Ore
• 99 Designs

Connect with Jon Manning:

• https://pricingprophets.com/
• LinkedIn

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn

How do you determine how much to charge for a product? Figuring out how much somebody's willing to pay for a product seems like a really simple question, but in practice, it's not that easy.

The problem with asking people what they're willing to pay is you have to ask them at the exact moment when they are ready and able and motivated enough to give you an answer. 

"The most profitable pricing decision really is to adopt value-based pricing."- Mark Stiving

By value-based pricing. I always charge what a customer is willing to pay. If you think about it, that's perfect pricing. It's not possible to get a price higher than what a customer's willingness to pay. If I could always charge whatever any customer is willing to pay.

I have absolutely maximized the amount of revenue and profit that I can get for my company. By now you figured out that that's not really possible. I can't read somebody's mind. I don't know how much they're going to be willing to pay me. But instead of thinking about this as, 'Oh, we have to be perfect at value-based pricing.'

Let's accept it as a goal or as an attitude. And when we think about doing price execution and the daily tasks that we do, or the strategies we create in every decision that execution should be all about, how do we get closer to this idea of charging? What a customer is willing to pay. And that is the most profitable pricing decision you can make.

If you've seen any of our memes that you'd like to move to the top of our memecast list, or if you have any feedback, please email me [email protected]. 

Now, go make an impact.

How do you determine how much to charge for a product? Figuring out how much somebody's willing to pay for a product seems like a really simple question, but in practice, it's not that easy.

The problem with asking people what they're willing to pay is you have to ask them at the exact moment when they are ready and able and motivated enough to give you an answer. 

"The most profitable pricing decision really is to adopt value-based pricing."- Mark Stiving

By value-based pricing. I always charge what a customer is willing to pay. If you think about it, that's perfect pricing. It's not possible to get a price higher than what a customer's willingness to pay. If I could always charge whatever any customer is willing to pay.

I have absolutely maximized the amount of revenue and profit that I can get for my company. By now you figured out that that's not really possible. I can't read somebody's mind. I don't know how much they're going to be willing to pay me. But instead of thinking about this as, 'Oh, we have to be perfect at value-based pricing.'

Let's accept it as a goal or as an attitude. And when we think about doing price execution and the daily tasks that we do, or the strategies we create in every decision that execution should be all about, how do we get closer to this idea of charging? What a customer is willing to pay. And that is the most profitable pricing decision you can make.

If you've seen any of our memes that you'd like to move to the top of our memecast list, or if you have any feedback, please email me [email protected]. 

Now, go make an impact.

Kevin Mitchell is the President of The Professional Pricing Society (PPS), the worldwide professional organization dedicated to pricing training, education, and networking. 

In this episode, Kevin shares what a pricing professional should be -- one that is not only adept at pricing strategies but can articulate, communicate, and negotiate in and outside the organization.  

He also talks about the pricing career path that the Professional Pricing Society provides in its pricing education. He doubles down on saying that every money that goes into what the company spends on and the revenue generated ties back to a pricing decision at one point in time.  

That’s why it is best to learn and understand pricing so we can make the best decisions. Because this would impact the organization and the people who work hard to create value in the products and services available to the consumers. 

Why you have to check out today’s podcast:

• Find out how to be a great pricing professional with pricing leadership
• Learn about the pricing education Professional Pricing Society provides for someone in terms of forging a pricing career path
• Hear about the future of pricing considering the uncertainty that concerns us at this time

“Everything in your company, all the profitability, all of your salaries, all of your bosses' salaries, every Dollar, Yen, Euro, Won that comes into your organization has a pricing decision attached to it.”

- Kevin Mitchell

Topics Covered:

01:49 - What made Kevin start a Pricing career

04:54 - Professional Pricing Society being a subscription company

06:19 - Who joins the Professional Pricing Society

08:09 - What is a pricing professional

11:22 - Two things that a company does in terms of R&D, product development, marketing

15:56 - How does PPS does education on pricing leadership

18:06 - Thoughts on the pricing landscape COVID and post COVID

25:19 - Changing names but keeping the value

26:43 - Best pricing advice that could impact your business

Key Takeaways:

“For a lot of individuals, pricing people, it's our job to make sure that we keep the lights on and keep everything running. And we do that because a lot of people invest a lot of resources in creating whatever it is that our company does, it's our job to make sure that we are adequately compensated for that.” - Kevin Mitchell

“The price is often the first impactful thing about a product or service. And it is our job to manage that.” - Kevin Mitchell

“To be a great pricing professional, you have to be an artist and also a scientist at certain levels. Certainly, you do need the mathematical, data, analysis background. But I think sometimes we can be lacking in communication, on the negotiation with others inside and outside of our company. I think both are very, very important about what we're trying to get across.” - Kevin Mitchell

“All of the money that comes into any organization, and therefore all of our salaries, all of the benefits that we get, that's all tied to a pricing decision at one point, and it's just a matter of, are we going to have our influence in it or are we going to let the marketplace decide?” - Kevin Mitchell

“It's so important that we should all be in the mind-frame that we're going to learn as much about it as we can to make the best decisions for ourselves, for our companies, and for all of the people in our organizations who work so hard to create the value in the products and services that we deliver to the marketplace.” - Kevin Mitchell

People/ Resources mentioned:

• Ford
• Xerox
• IBM
• Tom Nagel
• Reed Holden
• Eric Mitchell

Connect with Kevin Mitchell:

• LinkedIn
• pricingsociety.com

Connect with Mark Stiving: 

• Email: [email protected]
• LinkedIn