Impact Pricing – Details, episodes & analysis

This is an Impact Pricing Blog published on July 11, 2024, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/high-prices-and-lost-deals/

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/

Christine Nicholson has a 25-year experience of running companies in multiple sectors. She started, built, and exited multiple successful businesses. She took a business from £0-£4.5m turnover in 15 months. And she also rescued a bankrupt company from millions in debt to an eight-figure exit in under 18 months. More than just experience, she studied hard to become a Chartered Management Accountant with a law degree, a postgraduate degree in Information Systems Management - and a Professionally Accredited and Experienced Business Mentor. 

In this episode, Christine shares valuable insights on several key topics related to business valuation and pricing like the owner's emotional attachment, preparing a business for sale and customer feedback for pricing strategies. She provides a balanced view of how to strategically prepare a business for sale, emphasizing the importance of logical pricing decisions and understanding customer value perceptions.

Why you have to check out today’s podcast:

• Gain insights on emotional influence in business decisions to help you make more informed, rational decisions that enhance your company's value.
• Discover actionable tips on how to boost a company's valuation by implementing effective pricing strategies. 
• Learn the importance of customer engagement to understand their perception of value for better pricing decisions.

"Go and ask your customers what they think of your service. If you were no longer providing this service, what would they be willing to pay for the level of service that they get from someone else?"

- Christine Nicholson

Topics Covered:

01:02 - How did she get involved in pricing

03:20 - Discussing a common misconception among business owners regarding the value of their businesses

03:51 - Highlighting a scenario of the emotional complexities and the challenges business owners face when selling their businesses

12:22 - The psychological dynamics involved when business owners try to value their businesses and their services

14:37 - Explaining the key factors that sophisticated buyers look for when purchasing a company

17:22 - Deeper motivations tied to personal beliefs and values other than price when selling a business

19:40 - How adjusting pricing is one of the quickest and easiest ways to improve a business

22:05 - Christine's approach to helping companies fix their pricing strategies which involves more than simply raising prices

24:07 - Addressing the emotional and logical aspects of business decision-making

25:36 - Christine's best pricing advice

Key Takeaways:

"When you're talking directly to your customers, you have to talk with your heart because you're dealing with one human being typically to another. " - Christine Nicholson

"...if you get your pricing right, then you're going to make more profits; you're going to generate more positive cash flows." - Christine Nicholson

"When it comes to selling your business, all the heart is with the seller, and all the logic is with the buyer." - Christine Nicholson

"When people put their soul into something, they attach a value to it when they're selling their business; ironically, and completely paradoxically, they don't attach the value of the effort that they put into the business to their customers." - Christine Nicholson

"One of the biggest problems that I see from a selling business is where somebody is mentally associating the value of the business by the effort they've put in, but they're not reflecting that correctly in the way that their pricing to their customers." - Christine Nicholson

"You need to believe the value that you are giving to your client." - Christine Nicholson

"Buyers do not want to buy a job. They are buying an investment that has a hard return on capital. And the more certain they are about the return on capital, the higher the money that they will pay and the faster you'll get the cash in your bank." - Christine Nicholson

Connect with Christine Nicholson:

• LinkedIn: https://www.linkedin.com/in/christine-nicholson/
• Website: https://getexitready.co.uk/

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: mark@impactpricing.com

This is an Impact Pricing Blog published on June 13, 2024, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/collusion-vs-implicit-collusion-navigating-legal-and-profitable-pricing-strategies/

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/

Mark Chussil is the founder of Advanced Competitive Strategies, Inc. He is an expert in qualitative and quantitative business war games, custom strategy simulators, executive education and management development programs. Highly rated speaker, published books and dozens of articles on business and competitive strategy.

In this episode, Mark shares how simulating pricing strategies before actually implementing them can do away with costly outcomes thereby improving one's bottom line. 

Why you have to check out today’s podcast:

• Discover the essence of the Top Pricer Tournament
• Enhance your pricing strategy by utilizing simulation techniques to mitigate potential risks and minimize losses
• Find out fascinating insights and findings from the 'Top Pricer Tournament' and learn what to expect when participating in this exciting event

"If we choose a good strategy that turns out to be bad, what we have actually encountered is a false positive. And what we need to do a whole lot better in business is to be able to distinguish the false positives from the true positives. And that's what these simulations are about."

- Mark Chussil

Topics Covered:

02:59 - Differentiating decision rules versus decisions

05:31 - Mark Chussil agreeing to what Mark Stiving says in reference to Axelrod's 'tit for tat' and 'tit for tat with forgiveness'

07:16 - Drawing inspiration from Axelrod's work, Mark describes his own contribution

09:51 - Mark Chussil's perspective on Mark Stiving's assertion that companies prioritizing profit outperform those aiming for market share

11:15 - Findings about 'tit for tat' on why it doesn't work

12:17 - What is 'Top Pricer Tournament' and how it relates to or differ from 'Prisoner's Dilemma'

16:07 - Surprising findings from his own 'Top Pricer Tournament'

21:37 - Things to expect when you join Top Pricer Tournament

24:58 - Mark's best pricing advice

27:12 - Relating strategy to a decision

Key Takeaways:

"Strategy is a bet." - Mark Chussil

"In the Top Pricer Tournaments, and in life in general, we have situations where we can make great decisions, but somebody else has made a better decision or somebody else has come up with something that we didn't think about." - Mark Chussil

"I have seen people come up with strategies that I know I never would have thought of. And there's also a few that are in the Top Pricer Tournament that no human has selected yet, and that would outperform any of the ones that humans have selected so far." - Mark Chussil

People /Resources Mentioned:

• The Evolution of Cooperation by Robert Axelrod: https://www.amazon.com/Evolution-Cooperation-Revised-Robert-Axelrod/dp/0465005640

Connect with Mark Chussil:

• LinkedIn: https://www.linkedin.com/in/markchussil/
• Email: mchussil@competing.com

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: mark@impactpricing.com

This is an Impact Pricing Blog published on October 5, 2023, turned into an audio podcast so you can listen on the go.

Read Full Article Here: https://impactpricing.com/blog/rules-of-thumb-for-price-increases/

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 one is the Queen of Hearts from the Impact Pricing card deck.

 Value-based pricing has many different meanings. Different people use it differently. Oftentimes, it's used to say, what's the value of each individual feature that's different between your product and your competitors, and add that to your competitors price. And by the way, that's a great way to think about value and value-based pricing. 

But the easiest definition I've heard of for value-based pricing is, charge what your customers are willing to pay.  And I love this definition because sure, it takes into account the fact that we sometimes have competitors. And we want to know what's the value of our differentiation relative to our competitors' products.

Absolutely, these are crucial things for us to know. But we also get to discover, what happens if they're not considering competition at the time?  Or, what happens if it's raining and we want to sell an umbrella? So, these differences in time, differences in use cases, these things all have impact in how our customers value our products.  And likewise, how much they would be willing to pay for our solutions to their problems. 

So, I love this concept or this idea that says, look, we all want to charge based on how much value our customers are getting. That would be value-based pricing.  But the way to think about it is, how much is a customer willing to pay because that's how much they value your product.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. If you want to get better at speaking about pricing and value, grab a deck of our playing cards, pick a card, read the saying, then talk for one to two minutes about what that card says. You'll become a better speaker and expert. By the way, you can also play card games.

If you have any questions or feedback, please email me, mark@impactpricing.com.

Now, go make an impact.

Connect with Mark Stiving: 

• Email: mark@impactpricing.com
• LinkedIn: https://www.linkedin.com/in/stiving/

John Mansour founded Product Management University to unlock one’s full growth potential by making quantifiable customer outcomes the starting point for everything.

In this episode, John explains the concept of buyers trading money for value. Therefore, it is crucial to consider the quantifiable value aspect, as it forms the basis for developing effective pricing strategies.

Why you have to check out today’s podcast:

• Understand why it is crucial to prioritize providing value to customers when a company's sustainability is on the line
• Learn the difference in measuring quantitative value in B2C and B2B contexts in order to effectively deliver the value and achieve the desired outcomes for your customers, and price your offer accordingly
• Discover how to identify the most straightforward quantifiable value component and use it as a foundation to develop the optimal pricing strategy

"The quantifiable value piece is so important in what we do, which is, if you can quantify a unit of value to the customer for what your products are doing, that is a good starting point to figure out your pricing."

- John Mansour

Topics Covered:

01:31 - Reading a snippet from John's LinkedIn About Section

02:04 - What prompted him to conceive that idea in his LinkedIn About section?

04:56 - Why often customer value comes only secondary to most companies

06:49 - A matter of a discovery journey and digging down the customer's why

09:28 - One key thing to understand when dealing with your customers' key decision makers for your questions to be relevant to them

11:17 - Quantifying value in B2C versus B2B

12:52 - Ways to measure quantitative value

15:03 - Measuring quantitative value other than in dollars

19:26 - A process for identifying quantifiable value [case studies illustrating this]

22:43 - John's best pricing advice

Key Takeaways:

"If you deliver quantifiable value to the customer, it's going to come back to you in spades to your own organization and support whatever your strategic goals are." - John Mansour

"It's a matter of just understanding what their priorities and their agenda is. Because if they're going to trade value for money, we have to understand what's valuable to them and how it can be quantified." - John Mansour

"The dollars aren't always at the forefront. It's the impact that you have on things that are important." - John Mansour

"The more you can quantify those units of value, the easier it is to come up with a price that you can sell because you're selling the value." - John Mansour

Connect with John Mansour:

• LinkedIn: https://www.linkedin.com/in/johnmansourproductmanagementuniversity/

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: mark@impactpricing.com

This one is the Queen of Spades from the Impact Pricing card deck.

We really should be competing on value, not on price. We often think we're in a price war with our competition. We think our competitors are competing on price because we watch them give deep discounts to customers when we're in negotiations and we're wondering, why are they competing on price? But if you think about it, we responded with deep discounts on our products, and they look at us and they say, why are they competing on price? 

What we really need to do is hold our price, try to maintain that price at a nice high level, and instead explain why our product is worth so much more money than our competitors. If our competitors are going to lower their price, it's probably because their product isn't as valuable as our product. We need to learn what does value truly mean to our customers and help them understand how much value they're going to get. 

When we learn to create, communicate, value better, we'll be able to capture more of it in the way we price and the deals we close.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. If you want to get better at speaking about pricing and value, grab a deck of our playing cards, pick a card, read the saying, and talk for one to two minutes about what that card says. You'll become a better speaker and expert. By the way, you can also play card games.

If you have any questions or feedback, please email me, mark@impactpricing.com.

Now, go make an impact.

Connect with Mark Stiving: 

• Email: mark@impactpricing.com
• LinkedIn: https://www.linkedin.com/in/stiving/

This one is the King of Clubs from the Impact Pricing card deck. 

Sadly, too many companies still use cost-plus pricing. We take the cost of manufacturing or creating something, we add a margin, and there's our price. It's easy. We know we're making margin, but are we maximizing our profit? Maybe we're pricing so high that we miss out on some customers, or maybe we're pricing so low that we're missing out on what some customers would be willing to pay us.

Think about it this way. Imagine that it costs you $10 to build something, all in. Whatever costs you want to consider, great. And you have a buyer out there that's willing to pay you $100 for it. What's the profit-maximizing price that you could charge? Well, it's a hundred dollars. If you charge 99, you left a dollar on the table. If you charge a hundred and one, that buyer's not going to buy. And so, a hundred dollars is the best you could possibly do with that buyer. 

But what if instead of costing you ten dollars, what if it cost you twenty-five dollars to make it? Same buyer. What price would be the profit maximizing price? Well, obviously it's still a hundred dollars. Mind you, we make less money because our costs are higher. But the best we can do price-wise is the $100 because that's what our customer is willing to pay. 

When we think about pricing this way, we're not saying costs don't matter to business. What we are saying is costs don't really matter to us setting our price. Yes, we want to make sure our prices are above our costs. We want to make sure we're making money. So, think of it as a limit. But it isn't the thing that drives our price levels.

We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. If you want to get better at speaking about pricing and value, grab a deck of our cards, pick a card, read the saying, and then talk for one to two minutes about what that card says. You'll become a better speaker and expert.

If you have any questions or feedback, please email me, mark@impactpricing.com. 

Now, go make an impact.

Connect with Mark Stiving: 

• Email: mark@impactpricing.com
• LinkedIn: https://www.linkedin.com/in/stiving/

Nikhil Kalla is a Global Pricing Manager at Ingersoll Rand who collaborates closely with regional pricing and global cross functional teams to drive projects that build pricing governance, create value propositions, align pricing with the market by applying segmentation, harmonization, rationalization and market research.

In this episode, Nikhil shares the significance of customer segmentation in developing a product that caters to different pricing tiers - top, middle, and low. This approach ensures that the product aligns with customers' willingness to pay based on the value they receive.

"If we had known our customer more or the most, you would have been able to segment your market and gain maximum on your profitability."

- Nikhil Kalla 

Why you have to check out today’s podcast:

• Learn how customer segmentation drives different pricing points while still attracting customers from various segments
• Gain insights into the significance of customer segmentation in shaping product design and establishing pricing strategies that cater to customers' varying levels of willingness to pay
• Find out how proper communication of your product's value can help you gain the most advantage in pricing

Topics Covered:

01:46 - What's all this obsession of Nikhil over mastering Rubik's cube 

02:52 - How he found himself in pricing

04:31 - Defining customer segmentation

07:09 - Customer segmentation by way of price segmentation

08:59 - What goes into approving different price points for different customers and even for the same ones

11:20 - What drives different pricing mix

17:18 - Market segmentation as a way to sell your products more intelligently

19:40 - How this works: Two different products targets two different market segments with two different price points

26:42 - Explaining what real-life scenario versus assumptions when talking about value to price ratio[how packaging works as part of customer segmentation]

30:23 - Nikhil's best pricing advice

Key Takeaways:

"Customer segmentation is all about deriving value, the maximum value from your customer base." - Nikhil Kalla 

"Other than just being value and pricing, I feel there's more about communication of that value and then convincing part to be able to fetch maximum price so that the ratio of value by price is least as a win for me if I'm the supplier. And it has to be maximum so that the buyer gets to gain the most out of that transaction." - Nikhil Kalla 

"When it comes to having the ability to sell to a slightly non elastic market where the demand is going to be expected to stay the same, you would always want to rely on pricing as a lever. Because everything that comes through pricing just goes to your pocket." - Nikhil Kalla 

Connect with Nikhil Kalla:

• LinkedIn: https://www.linkedin.com/in/nikhil-kalla

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: mark@impactpricing.com