How to Benchmark Your Pricing Like AI Models with Steven Forth

Steven Forth is the Co-founder and Chief Value Officer at Ibbaka, a leading value and pricing consulting firm. With deep expertise in AI applications for pricing and value modeling, Steven is at the forefront of developing intelligent agents that help businesses understand and communicate value more effectively. His work focuses on the intersection of artificial intelligence, pricing strategy, and value creation, making him a pioneer in applying AI to solve complex pricing challenges.

In this episode, Steven shares his insights on how benchmarking is revolutionizing both AI development and pricing strategy. Drawing parallels between how AI models are improved through benchmarking and how pricing models should be evaluated, he introduces a framework for measuring pricing effectiveness that could transform how we approach pricing decisions. Together with Mark, they explore the challenges of establishing "truth" in pricing, the role of synthetic data, and the future of AI-powered pricing tools.

Why you have to check out today's podcast:

• Discover how AI benchmarking principles can revolutionize pricing model evaluation.
• Understand how to evaluate pricing models from both buyer and seller perspectives.
• Explore the future of AI-powered pricing tools and what it means for pricing professionals.

"We don't start with the truth. We have to work our way towards truth through multiple iterations and applications."

– Steven Forth

Topics Covered:

02:15 – How Intercom's FinAI agent uses daily benchmarking to improve ticket resolution performance

05:30 – Why AI's success is built on benchmarking and how it emerged from the ImageNet competition

08:45 – The critical problem: pricing lacks standardized benchmarking like AI models have

11:20 – Michael Mansard's 12-factor pricing model assessment and its potential as an industry standard

14:10 – Why pricing models must be evaluated from both buyer and seller perspectives

17:25 – How market segmentation and use cases complicate pricing model benchmarking

20:40 – The role of synthetic data in pricing research and model validation

24:15 – Why "vibe coding" could disrupt traditional pricing consulting within 3 years

27:30 – The search for truth in pricing: hedonic pricing models and market assumptions

31:45 – Introduction to ValueIQ: Ibbaka's new AI agent for value-based selling

Key Takeaways:

"Anyone who says that they're data centric or data driven is actually before that they have to be model driven because they're using some form of model to organize the data." – Steven Forth

"We should have done this 20 years ago. What were we thinking? Well, we weren't thinking. And we didn't have ways to do this for us anyway." – Steven Forth (on developing pricing benchmarks)

"Benchmarking every day, I think, is going to be critical to the success of agents that do important business things." – Steven Forth

"You can always improve your measurement, but at some point the return of improving the measurement is lower than the cost of increasing the validity of the measurement." – Steven Forth

Resources and People Mentioned:

• Douglas Hubbard's How to Measure Anything (book): https://www.amazon.com/How-Measure-Anything-Intangibles-Business/dp/1118539273
• ImageNet: https://image-net.org/
• Michael Mansard's 12-Factor Pricing Model: https://www.insead.edu/bio/michael-mansard-0
• Intercom's FinAI: https://www.intercom.com/help/en/articles/8205718-fin-ai-agent-resolutions
• Lovable, Replit, Bolt: https://linkblink.medium.com/bolt-vs-cursor-vs-replit-vs-lovable-ai-coders-comparison-guide-3b9d41e75810
• ValueIQ: https://www.ibbaka.com/ibbaka-market-blog/get-ready-for-valueiq-sign-up-now-for-beta-access

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