Impact Pricing

This is an Impact Pricing Blog published on March 2, 2022, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/indirect-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: https://www.linkedin.com/in/stiving/

This one may be intuitive, may not be intuitive, but it turns out that if your fixed costs change, for whatever reason, if they go up, if they go down, it really should have no impact whatsoever on your pricing. For example, let's say you need to buy a new piece of factory equipment, and it's really expensive, and it makes your fixed cost go way up. Did buying that new piece of factory equipment for you change your customer's willingness to pay? No, it didn't. Customers are still willing to pay the same amount. They still can choose between you and a competitor. Well, did you changing your fixed costs changed the way your competitor prices for whatever reason? No, it doesn't. The only thing that matters to us when we're doing pricing is thinking about how our customers are making decisions and how we can make optimal decisions based on that. And I can assure you that your fixed costs have absolutely nothing to do with how much your customers are willing to pay. For that reason, your fixed costs never matter t

Reginald Tomas Lee is a Professor of Business Analytics at Xavier University in Cincinnati, Ohio. He has a PhD in Mechanical Engineering, and he's been involved in supply chain since ’96. Reginald’s most recent book is called Project Profitability. And one fun thing, he can't go on vacation, because he has two killer dogs. In this episode, Reginald shares wisdom with regards to the modeling he’s been making as he talks about the power of helping people understand more clearly how what it is that they do impacts cash.   Why you have to check out today’s podcast: Understand why you should start seeing things from a cash perspective in relation to knowing what it is that it enables you to save Learn about the difference of cash cost and non-cash cost through situational examples from real life experiences Find out how your actions and decisions impact how you generate cash in a business   “Don’t focus on accounting margins.”  – Reginald Tomas Lee   Topics Covered: 01:17 – How Reginald shifted from being a mec

This is an Impact Pricing Blog published on February 23, 2022, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/direct-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: https://www.linkedin.com/in/stiving/  

It's true, pricing can have an instantaneous response. I often think of it as the nuclear bomb of marketing mix variables because you can change it today, impact the market immediately, and it's really hard to take it back. Now, compare that to the other marketing mix variables. If you've taken a marketing class, you know the four P's. You know the other three besides price, or your product, your place, and your promotion. Product is obviously, what are we building? The place is, what's the distribution channel look like? And then the promotion is, how are we marketing it? How are we talking about it in the marketplace? We could change our marketing. We could change our product. We could change our distribution channel. And each one of those would have an impact on our revenue, on our sales. But it takes a long time for that impact to ripple through. On the other hand, if I change price today, people will change their mind today. Some people will choose to buy, some people will choose not to buy, simply becau

Pedro Piccoli Soares is currently Senior Executive Manager of AI Pricing at SIXT, a travel arrangement / car rental company that’s known to be a provider of high-quality mobility services. He mentors startups, and has an Engineering degree. He also has a purple belt in Brazilian jiu-jitsu. In this episode, Pedro shares his knowledge when it comes to behavioral economics as he and Mark talk about how it works in relation to mental accounting and pricing.   Why you have to check out today’s podcast: Discover why it’s important for companies to understand why they’re doing pricing and why they’re having a price change Understand why you should still be relative to your competitors’ price change even when they’ve already made the mistake of decreasing their prices Learn more about behavioral economics, its tactics, and its relationship with mental accounting and pricing   “So, we've mentioned several different effects of behavioral economics and several different examples of how they can be applied on real busi

This is an Impact Pricing Blog published on February 16, 2022, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/another-netflix-price-increase/ 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/  

The whole point of pricing, value-based pricing, is to charge what customers are willing to pay. And almost by definition, loyal customers like us more, they would be willing to pay us more. This is the big exception to the rule of charge what a customer is willing to pay. My intent when I do price segmentation and charge different customers different prices is I also want to think about the lifetime value of a customer. If you have a customer who loves you, they're very loyal to you, and yet they find out that you are charging them more than anybody else, it will upset them. You have a really high probability of losing them as a customer. And if you do, you lost the lifetime stream of value. So, my advice, treat loyal customers really, really well, and don't charge them more than other people. We hope you enjoyed this memecast. 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.

Duane Dufault is currently a Fractional CRO at Forward and is a Strategic Advisor at Abaqus Inc. Before this, he was Fractional VP of Sales at The RockED Company Inc. Duane is a dad of four lovely daughters. In this episode, Duane shares the power behind having all departments in a company understand value in order to help the customer see and understand value as well in accordance with their reasons for buying a product.   Why you have to check out today’s podcast: Discover why it’s important for you to teach your sales reps to unpack value and not create it Find out why it’s a must for you to help people understand what it is that they’re actually paying for upon purchasing your product Understand the reason behind having clients voice out their problem and a salesperson being able to connect the product as a solution to what a client needs to be solved   “Just make it easy, seriously. The easier you can make it for people to figure out the pricing on your product, the easier it is for them to buy. Simple

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