Hybrid Pricing and Pricing with AI with Steven Forth

This one is the 9 of Spades from the Impact Pricing card deck.  There are two major rules in pricing that are hugely valuable to your organization. The first one is value-based pricing, which simply means charge what your customers are willing to pay. The second one is to adopt price segmentation. Think about this for just a second. No two buyers actually are willing to pay the same price. Which means every buyer has a different willingness to pay. If we really want to adopt value-based pricing, at its best, then what we're doing is trying to figure out, how do we get individual people to pay us what they're willing to pay? Of course, this is impossible to do perfectly, but it's not impossible to say, hey, this type of person, this type of customer, gets more value from our product. They're willing to pay more because they get more value. We see this all the time. For example, it could be that when we sell to Asia, they're more price sensitive so they end up with a better price. And when we sell in the US or Europe, we end up charging higher prices. This is price segmentation and that's where the value is. There are several ways to do price segmentation. Those include understanding the characteristics of your customer. What information can you collect at the time of the transaction? And then, are there behaviors or hurdles you could put in their way so that those who are price sensitive are willing to jump that hurdle in order to get a better price? So, my advice, think very hard about, how do you do price segmentation? How can you charge different customers different amounts based on their willingness to pay? We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. 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/

7 Helmi 20242min

Alex Costa is a Specialist in Strategic Pricing, statistical analysis, market intelligence, sales finance (P&L) statistical analysis, acting as a Sales Business Partner to guide the best pricing strategies, which increases revenues and margins (EBITDA). In this episode, Alex discusses the importance of both hard and soft skills in achieving success. He also highlights three of the eleven essential skills for pricing professionals and shares his insights on value-based pricing, emphasizing its comprehensive impact on the value process. Why you have to check out today's podcast: Find the optimal skills to prioritize as a pricing professional Discover effective techniques for engaging with salespeople in a manner that fosters collaboration instead of resistance Learn how to share information and knowledge within the company to foster a collaborative effort towards achieving shared objectives "Hard skills and soft skills play a huge impact for you to be effective in your career in pricing." - Alex Costa Topics Covered: 01:04 - How Alex pursued pricing 01:54 - Pricing is more than margin 02:47 - What he thinks is the best skill pricing professionals should have 04:16 - Why one has to think logically as a pricing professional 05:05 - Consultative versus reactive when engaging with sales 07:02 - How to invite collaboration rather than resistance from salespeople 08:55 - Discussing on the idea of sharing knowledge and information inside the organization 11:16 - Why emotional control matters 16:22 - What he thinks of value-based pricing 18:16 - Who should take the role of training sales teams for them to understand your product's value 19:26 - Looking at value not just of the product's attribute but the whole chain of it 21:53 - How you can get a hold of Alex's paper with this 11 skills 22:29 - Alex's best pricing advice Key Takeaways: "I think the most important thing to us as pricing professionals is to engage with sales objectives, to understand what the goals of sales teams are. But of course, align with the goals of the organization." - Alex Costa "If you don't control your emotions, your emotions will control your career and your project." - Alex Costa "When you look for the satisfaction from the customer, what their perspective of the value that they will take from your product or services, you can position your pricing better." - Alex Costa "Sometimes they think, value comes just from the aspects of the product, the attributes of the product. But for me, the value in the mind of the consumer and the customers comes from the entire chain of value of the company." - Alex Costa Connect with Alex Costa: LinkedIn: https://www.linkedin.com/in/alexandrecostaoliveira/ Connect with Mark Stiving: LinkedIn: https://www.linkedin.com/in/stiving/ Email: mark@impactpricing.com

5 Helmi 202424min

This is an Impact Pricing Blog published on December 28, 2023, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/three-types-of-b2b-value/ 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/

2 Helmi 20245min

This one is the 10 of Clubs from the Impact Pricing card deck. Face it, when you talk to a customer, what you really want to ask them is, "how much would you pay for them?" The problem is they won't answer that question. First, they probably don't know the answer to that question. But more importantly, in the back of their mind, they're thinking, Hey, I can't tell them the truth because if I tell them it's really valuable to me, they'll end up charging me a higher price. So, I'm going to come up with a number much lower. I'm going to game the system, or play a negotiation game without them even knowing I'm playing. Of course, that hurts us because we're trying to gather real information, how much would they pay? One question I found that works relatively well, I wouldn't call it scientific, but it's a great way to get just a perception of people's pricing. And that is, "how much do you think other people like you would pay for this?" It takes enough indirection in the question that they tend not to think about gaming the system. And instead they think, "Oh, well, that person over there is probably like me, so therefore they would probably pay this much." When you ask that question, what the buyer's thinking in their mind is, how much would I really pay, and that's how much I think other people would really pay. We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. 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/

31 Tammi 20242min

Steven Forth is Ibbaka's Co-Founder, CEO, and Partner. Ibbaka is a strategic pricing advisory firm. He was CEO of LeveragePoint Innovations Inc., a SaaS business designed to help companies create and capture value. In this episode, Steven discusses the growing significance of showcasing economic value to customers and the challenges that companies encounter in accomplishing this, particularly with regard to AI monetization. There is a strong emphasis on the necessity for better understanding and communication of the value delivered by SaaS products to enable more effective value-based SaaS pricing strategies. Why you have to check out today's podcast: Look into the latest AI monetization report for 2024 and gain insights into the strategies for monetizing AI Find out the key trends in SaaS pricing related to AI for the year 2024 Discover the compelling reasons why AI is truly revolutionary and why it's crucial to embrace this transformative technology "Don't panic and cut prices." - Steven Forth Topics Covered: 01:37 - How is AI going to significantly influence SaaS and pricing this 2024 03:38 - The impact AI is going to have on most businesses in the interface, functionality, and internal workflow levels 06:59 - What this AI monetization report is all about 09:46 - Looking on the value of the solution more than just the AI tool 11:05 - Why B2B SaaS companies are under increased pressure to justify their prices based on the value delivered to their customers 13:12 - Quantifying and truly delivering value to customers and product management's critical function in understanding value 16:05 - Significant insights on customer success department's role in value quantification 17:02 - Discussion about using SaaS versus obtaining perpetual license 22:38 - Summarizing the three major trends this 2024 24:47 - Expressing optimism that companies adopt better tool sets to assess, track, document, and communicate economic value 25:38 - Steven's impactful advice Key Takeaways: "Vast new areas of applications are going to be opened by AI and things that we couldn't do, or were too expensive to do in the past become easy to do and very affordable to do, already are today." - Steven Forth "If you can demonstrate value, then you have a lot of weapons that you can use against these [larger competitors]." - Steven Forth "AI is going to be moving rapidly towards monetization, which means it has to be able to demonstrate value." - Steven Forth "There's an overall pressure to better manage SaaS spending, which is going to lead to pressure on SaaS companies to be able to demonstrate that they are actually delivering value, not just happy users." - Steven Forth "Cutting prices is not going to solve your problem. That could just increase your churn. There's no guarantee that cutting your prices will reduce your churn." - Steven Forth "You can't compensate for a lack of value by lowering your price." - Steven Forth People/Resources Mentioned: Open View:https://openviewpartners.com/blog/tagged/research-and-analytics/ Amazon: https://www.amazon.com Google: https://www.google.com/ IBM: https://www.ibm.com/us-en Salesforce: https://www.salesforce.com/ap/?ir=1 Oracle: https://www.oracle.com/ph/ Connect with Steven Forth: LinkedIn: https://www.linkedin.com/in/stevenforth/ Email: steven@ibbaka.com Connect with Mark Stiving: LinkedIn: https://www.linkedin.com/in/stiving/ Email: mark@impactpricing.com

29 Tammi 202429min

This is an Impact Pricing Blog published on December 21, 2023, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/why-your-salespeople-dont-sell-value/ 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/

26 Tammi 20244min

This one is the 10 of Diamonds from the Impact Pricing card deck.  Different buyers value our products differently, hence, what that should mean to us is we get to do price segmentation, we could be charging different prices. But from a sales perspective, once we've got a price set and we need to go out and do prospecting and find which customers we want to go sell to, guess which ones are the easiest ones to win? The ones where they perceive the most value from our product. If somebody is going to use our product and make a million dollars, they care a lot more than someone who's going to use our product and make $10. Can we articulate where's the value of our product, who's going to get the value, and then find those people who really get a ton of value and focus on them. That's where we should be doing our prospecting. That's where we should be doing our marketing. And if we have a list of prospects to go deal with, those are the ones we should be spending our sales effort and energy on. We hope you enjoyed this example of Pricing Table Topics. What you just heard was done without a script. 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/

24 Tammi 20241min

Todd Snelgrove is the Senior Director; Value Advisory at SAP. He is a value advisor who helps companies get paid for the value they create. In this episode, Todd discusses the fundamental importance of value quantification in pricing and emphasizes the need for a structured process to carry it out effectively. Why you have to check out today's podcast: Discover the importance of prioritizing value over solely relying on the behavioral economics of pricing when it comes to pricing strategies Find out the effectiveness of quantifying value over simply offering discounts Learn about what constitutes a value conversation "Have a structured process to quantify customer value. It's not as hard as people think. Even if you're not perfect at it, it's better than nothing." - Todd Snelgrove Topics Covered: 01:05 - How Todd got into pricing 02:19 - Quantifying value in B2C 04:13 - The subconscious way of quantifying value 05:38 - Why behavioral economics matter less in B2B 08:05 - The decoy effect in pricing and how some tricks used in B2C doesn't work in B2B 12:16 - Evolving power dynamics in procurement and how salespeople should navigate dealings with procurement in different scenarios 17:31 - Performance guarantee over discount 20:26 - What transpires in a value conversation 22:20 - The telling versus the asking in a value conversation 25:20 - Tod's one piece of best pricing advice 26:18 - Why not many companies quantify value 27:08 - Todd's book: Value First Then Price 29:09 - Tying cost and benefits to a value conversation Key Takeaways: "When you talk about value, talk about real dollars. It's okay to list benefits and all these other things. But when you say value, show how that's going to be more profitable." - Todd Snelgrove "I spend a lot of my time getting procurement to realize that 10% value per year is better than a 10% price cut." - Todd Snelgrove "Price becomes an issue but only after you've discussed value." - Todd Snelgrove Resources/People Mentioned: Value First then Price by Todd Snelgrove: https://expertsinvalue.com/books AstraZeneca: https://www.astrazeneca.com/ Connect with Todd Snelgrove: LinkedIn: https://www.linkedin.com/in/toddsnelgrove/ Email: todd@expertsinvalue.com Connect with Mark Stiving: LinkedIn: https://www.linkedin.com/in/stiving/ Email: mark@impactpricing.com

22 Tammi 202432min