Impact Pricing

This is an Impact Pricing Blog published on February 9, 2022, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/you-must-lose-on-price/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

Salespeople love them to death, however, it's more important to them to close the deal than to close it at the highest possible price. In fact, if they stay and negotiate a little bit harder, they're at risk of losing the deal. And if they lose the deal, they lose their commission. They lose the ability to reach their quotas. So, for them, their incentives are a little bit askew from what our incentives should be. And when I say our, let's say the company, the owners of the company, or us as pricing people, where we want to try to win deals at the highest possible price. So, although salespeople are really selling value and they're doing their best, in the end, price is just one of the many tools they have to try to close a deal and they're going to use every tool they have. So, I don't think salespeople should own pricing. Sure, we should give them a little bit of flexibility, a little bit of price authority to help them move deals along quicker, but to give them complete authority, probably a big mistake. W

Ray Ranga is currently the VP of Product Management at Momentive AI. Before working in Momentive, Ray was the Senior Director of Product Management at Splunk. Ray is an instructor at UC Berkeley and he also conducts a pricing class at Stanford. In this episode, Ray discusses the power behind involving the people who know the product’s value when making pricing decisions as he specifically points out the benefits of having pricing teams connect with people from the product management department.   Why you have to check out today’s podcast: Discover which team should own pricing in a company in relation to the value the product has; Find out how to effectively package products in a way that resonates best with what your customers want; and Understand why pricing and product management people should be one when making pricing decisions towards their product   “Understand your customers to a deep, deep level. See what gets your customer ticking, and then I'm sure everything else follows.” – Ray Ranga   Topics C

This is an Impact Pricing Blog published on February 2, 2022, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/losing-on-price-2/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

This is an Impact Pricing Blog published on January 26, 2022, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/a-perspective-on-rfps/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

Jon Lucas started as an Accounting Manager before working as the Strategic Pricing & Business Development Manager of Cornerstone Building Brands Inc. Jon loves hiking, and he is loving it even better since he moved out of Ohio. In this episode, Jon engages in a discussion with Mark Stiving about making price changes in relation to the importance of value and volatility of costs in the market nowadays.   Why you have to check out today’s podcast: Discover the importance of differentiating your business with the general market when thinking about value and making price changes; Learn how you can manage cost volatility and even add value when deciding on your products’ prices; and Find out why a safe and sound relationship with the sales team is a must when you’re doing pricing   “To experienced pricing managers, structure your department, borrow what everybody else in the organization is doing and have an org chart. Put some procedures around it. It kind of sounds like common sense, but I honestly don't s

This is an Impact Pricing Blog published on January 19, 2022, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/dont-confuse-your-buyers/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact.   Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

I'm going to try to do a little math with you on this podcast, and imagine we have a company that normally makes a hundred million dollars in revenue. They've got costs of $90 million all in. So, they're making $10 million in profit. And that's not unrepresentative, that seems pretty reasonable for a lot of companies. But what happens if we could increase or improve our pricing by 1%? So instead of a hundred million, what if we got 101 million in revenue? Our costs don't really change so instead of 10 million in profit, now we're making 11 million in profit. That 1 million in improved pricing went straight to the bottom line. And in the example I just gave you then, a 1% improvement in pricing can lead to a 10% increase in profitability. This is huge. We should be looking for small places where we can increase pricing because every dollar, when we improve our pricing, goes straight to profitability. We hope you enjoyed this memecast. If you have any questions or feedback, please email me mark@impactpricing.co

Anne Warren is the Senior Director of Global Pricing at Shure – an appliances, electrical, and electronics manufacturing company that produces best-in-class audio products with high-quality performance, reliability, and value. Anne started out as an accountant and an auditor. She's been leading pricing teams for about 20 years now. In this episode, Anne shares the power behind pricing people working with sales, finance, and marketing departments in order to better market a product in a competitive market.   Why you have to check out today’s podcast: Discover why pricing people serve as the connector between the finance, marketing, and sales departments of a company; Understand why rapport with those internally involved in the business is essential in marketing a product; and Know how you can establish an effective rapport with other teams aside from yours through tips from an expert   “Establishing the rapport, especially with the sales and leadership team, treating your sales leaders as business partners,

This is an Impact Pricing Blog published on January 12, 2022, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/willingness-to-accept/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/

When we think about pricing, typically we have a product in hand and we say, how much does our customer value this? How much are they willing to pay? Now, we're going to put a price tag on that. And that's really important. We want to be able to do that well. And that's typically what we think of when we think of pricing. But if we take a step or two backwards in the business process, the fact that we as pricing people understand value, we understand how customers perceive value. Imagine if the product managers or developers or whoever's defining the products that we're going to build, imagine if they understood this concept of value the way we understand the concept of value. Because then they could be creating products that our customers actually value. “The less obvious but more powerful part of pricing is creating value.”  - Mark Stiving If we think about the products or the features that we create and how they drive value, we'll end up creating better products, products that our customers love more, pr

Shantanu Basu is currently the Senior Director of Go-To Marketing Strategy and Operations at Tanium. He was Director of Strategy and Operations at Intel for a long time, and he's part of an organization called RevGenius. Shantanu got his MBA from the University of Michigan. In this episode, Shantanu discusses value chain alignment alongside the importance of knowing what your value is and understanding what your customers think what your value is.   Why you have to check out today’s podcast: Discover why knowing your company’s value and understanding how your customer sees value in you when doing pricing; Understand the importance of doing things one at a time, especially when communicating about the company’s value chain; and Find out why it’s necessary for you to be able to ask the right value chain alignment questions   “When you think of yourself as a pricing professional, you're doing your pricing jobs so to speak, don't limit yourself to what somebody else might consider the definition of your job. A

We all know that price is a signal of quality, but what ends up happening is, over time people learn what the true quality is, and they realize if the prices match that true quality or not. If we're able to price relative to our true quality, then all is right with our customers in their minds and they're not going to change their purchase decisions. They're more likely to stick with us. Now, what happens if we deliver a ton of quality and we charge a low price? Well, first off, maybe a lot of people aren't going to find out because they're using our price as an indicator of quality. And they say, oh, that's way too inexpensive. It's not a product that would fit my needs. So, they never learned that yours is great. Once of course, someone buys in and they start using it, then sure, they say, hey, this is a fantastic deal. Maybe they talk about it, word of mouth. The question becomes, can you get people to buy it because it's such a low price. On the other hand, let's say you charge a really high price for som

There's a concept in economics, behavioral economics, called reference prices. And reference prices really say our customers have some expectation about what they think they're going to pay. And if our price is below that expectation, they get a good feeling they're getting a good deal. And the fact that they're getting a good deal provides them an incentive or the good feelings that say I'm actually going to buy. Richard Thaler broke this up into two different types of utility. There's transaction utility and there's functional utility. The functional utility is the utility that someone gets from our product. It's the reason they're buying it. But transactional utility is the feelings you get when you're going to buy something. And if you walk into a store expecting to pay $20, and you find it on sale for 15, you're thinking, Hey, that's a really neat deal, I'm going to buy that. Or you're more likely to buy it. "We should be paying attention to our customer's expectations." - Mark Stiving If we have a way t

José Vela is the Director of Pricing at Spandex Barcelona, known as one of the leading suppliers of graphics and digital materials worldwide. He is a strategic and business savvy leader who empowers business development and profitability improvements for global businesses, with an expertise in directing international trade, manufacturing, and services operations. José moved into pricing after having a General Manager's role. In this episode, José talks about the importance of getting the right price in selling your services as he relates it to the change and value you’re providing to your customers.   Why you have to check out today’s podcast: Understand why it’s a must for you to be able to price your products and services right in relation to winning more deals even at a high price; Discover how experience adds up to a pricing person’s credibility, therefore, resulting to high rates of success in sales; and Find out how necessary it is for you to think like your customers in order to provide the best value

This is an Impact Pricing Blog published on January 5, 2021, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/opportunity-costs-and-pricing/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn

As pricing professionals, we really need to be the logical part of the business. Our product lines, they really want higher prices. Sometimes they become emotionally involved with their products and they think that they're worth a ton - and they probably are.   Have we explained the value to the customers? Are we able to capture all those higher prices?   "We pricing professionals are the fulcrum of the business. Product lines want higher prices, sales want lower prices. " - Mark Stiving And what we want to do as pricing people is make sure we understand whether or not we're communicating value well to the marketplace. And if we're not communicating value, maybe we're discounting so that we can at least win some business.   So we're almost like the dispassionate referee. We're trying to say, hey, it makes more sense for us to price this way if we want to maximize profits.   On the other hand, salespeople, customers too, what lower prices. Salespeople have prices, one of their tools to close a deal. When a cus

Paul Orlando is the Founder of Startups Unplugged and is the author of the book “Growth Units”, a book that makes unit economics straightforward. He builds incubator/accelerator programs around the world, getting companies to solve problems that they couldn’t in other ways, which allows the building of autonomy and skills that keeps employee retention high and maintains the company’s top talent. Paul is an adjunct professor and runs the incubator at USC. In this episode, Paul talks about calculating lifetime value as he shares why it is important to think about pricing in relation to the LTV.   Why you have to check out today’s podcast: Understand the relationship lifetime value has with pricing and why it’s better to learn early and often than to fail fast Find out why overpricing and underpricing are present in various companies Discover why your lifetime value isn’t and will never be limited to one number   “People are really afraid of raising prices. I think it was Marc Andreessen who said, 'a lot of pr

This is an Impact Pricing Blog published on December 29, 2021, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/call-it-customer-impact/  If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com. Now, go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn

As far as loving you is concerned, obviously, they love low prices; they love discounts. But the real love happens when we can deliver a ton more value than what they expected, what they actually have to pay for. These are the raving fans, the people who really value our products. And yet we couldn't capture all of that value even if we wanted to.  “Pricing has the power to make your customers love you, hate you, or anything in between.” - Mark Stiving As to hating you, customers will absolutely hate you when you raise their prices without some reasonable explanation, without doing something nice for them, because customers hate price increases. And of course, if our pricing is just ridiculous; if it's horrible, for whatever reason, they will learn to hate us. So pricing really is very powerful, it causes emotions inside our customers. We want to make sure we're managing those emotions carefully.  We hope you enjoyed this podcast. If you see have any questions or feedback please email me mark@impactpricing.co