Blogcast: Pricing AI: Buyers Buy Inherent and Relative Value

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.com.  Now go make an impact. Connect with Mark Stiving:  Email: mark@impactpricing.com LinkedIn

2 Feb 20221min

Damien Robert is currently the Chief Solution and Delivery Officer at Pricemoov. He's been at Simon-Kucher & Partners (SKP) for 17 years of his career so he actually understands pricing really well. Damien also took a three-year stint at Disneyland Resorts Paris. Damien develops and implements tailor-made pricing solutions, ensuring easy price steering across the organization. In this episode, Damien talks about Machine Learning and how it helps optimize inputs in the pricing work as he shares insights in relation to Pricemoov’s models.   Why you have to check out today’s podcast: Find out what Machine Learning (ML) and Artificial Intelligence (AI) are all about and how these two are used in pricing Discover simple and advanced pricing strategies you can implement to reach a bigger market Understand why looking at price in the perspective of your client is a good move towards success   “Look at your prices with the client view.” – Damien Robert   Topics Covered: 01:32 – How Damien got into pricing 02:34 – What does pricing mean for Damien 04:28 – Damien’s pricing story when he was still in Disneyland 06:25 – What makes Pricemoov different in the pricing market and how Damien got involved with them 08:50 – Simple and advanced pricing strategies people can implement 10:57 – Collecting competitive pricing information with car rental companies 13:00 – Defining Machine Learning (ML) and Artificial Intelligence (AI) alongside the things they do 16:45 – Using ML to forecast the effects of the decisions made for pricing 19:54 – Mark’s Amazon story: his $20 book reaching a price $225 in Amazon 22:00 – Damien working in a theme park, the existence of black box 24:57 – The things Pricemoov considers when making pricing models 27:00 – Damien’s pricing advice for today’s listeners   Key Takeaways: “Pricing is not only a price, but also the way you message it and what you can achieve.” – Damien Robert “Our software is allowing you to configure the rules that we provide. So, you have a set of rules, you, yourself, decide which one you want to use and implement for your product portfolio, because you may want to use one or another one, and we can basically train you on which one you want to use.” – Damien Robert “That's what people misunderstand. Sometimes in machine learning and artificial intelligence, they think that the model by itself can be smart. The reality is that the model is not smart, but the model can be much more granular and fit much more kind of situations because his granularity and the computer allows, basically, to have so many computations and so many different alternatives.” – Damien Robert “Somehow, machine learning can be used to optimize part of the dimension, some of the inputs, but basically, at the end of the day, you need a skeleton of decision making, which is important to have. Otherwise, you do not take the long-term impact of price changes. You do not take the potential competition reaction. So, you're missing a lot of the points.” – Damien Robert “Very frequently, you just optimize, set a price, but you do not check the consistency, you do not realize some of the price points, and you won't even realize that the way your prices are featured on the web is sometimes a catastrophe. So really, just look at the end of the tunnel and look at it because you will have a lot of surprise, especially on promotion. 50% of promotional faders are usually related to execution. It's not at all related to the design of the promotion itself.” – Damien Robert   People / Resources Mentioned: Pricemoov: https://pricemoov.com/ Simon-Kucher & Partners: https://www.simon-kucher.com Tesla: https://www.tesla.com/   Connect with Damien Robert: LinkedIn: https://www.linkedin.com/in/damienrobertpricemoov/# Email: robert@pricemoov.com   Connect with Mark Stiving: LinkedIn: https://www.linkedin.com/in/stiving/ Email: mark@impactpricing.com

31 Jan 202228min

This is an Impact Pricing Blog published on December 22, 2021, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/the-art-of-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

28 Jan 20223min

Real value comes from real differentiation. Real value is turned into perceived value through marketing.  When we're up against the competition, which most of the time we all. Our customers are buying perceived differentiation. They look at our product or competitors' products. What's the difference in price and is it worth it? And the, ‘is it worth it’  has everything to do with the difference in capability, the product differentiation, the features that are different.  “Build real differentiation, but we have to make sure our customers know it.” - Mark Stiving Now we may have built the best product in the world. We may have built a product that is much, much better than our competitors, but if our buyers don't know that. If they don't believe that, then they're not going to choose our product buyers.  Aren't buying based on real differentiation? They're buying on their perceptions or what we'll call perceived differentiation. Our job as a company should be to build products that are truly better than our competitors.  In other words, build real differentiation, but we have to make sure our customers know it. And that comes through marketing. It comes through sales efforts. We have to make sure we're communicating the fact that our product is better/different than our competitors.  We hope you enjoyed this podcast. If you see 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

26 Jan 20221min

Ebrahim El-Ebiary is a Pricing Manager at Goodyear Tires. He’s been with Goodyear for six years now, having worked in Revenue Management at FedEx before that. Ebrahim is a Professional Certified Coach and he's genuinely interested in people and how they think. In this episode, Ebrahim talks about the importance of curiosity and good relationship to your pricing practice as you continue to make money through helping your customers do the same.   Why you have to check out today’s podcast: Learn about what revenue management is and the relationship it has with pricing Understand why it’s important that pricing people understand their customers’ future while having the customers take part in the creative process Find out about the benefits of having a good relationship with your customer and keeping that relationship until it lasts   “Before launching a very detailed analysis, ask the question, ‘how will this be used?’” – Ebrahim El-Ebiary   Topics Covered: 01:11 – How Ebrahim got into pricing 01:59 – Revenue management’s relationship with pricing and yield management 03:48 – Does Goodyear have revenue management? 04:40 – Defining a coach and what a coach does; Is Mark a coach? 06:05 – Pricing and coaching as different sides of the same coin 07:50 – Why curiosity is important in keeping relationships with customers 09:27 – Questions to ask in order to better understand a customer’s future 11:53 – Why it’s important for tires to be talking to each other 14:26 – Where the idea of communicating tires came from 15:42 – Having the customers take part in the creative process and keeping that relationship with them 19:08 – Being in a zero-sum game situation of price negotiation 23:12 – Expressing complex analysis into simple statements to not lose your customers 26:32 – Pricing advice for today’s listeners   Key Takeaways: “A coach is someone that supports people getting from where they are to where they want to get to, not where he or she wants to get, where they want to get to. A coach does not tell you or does not impose their point of view.” – Ebrahim El-Ebiary “Making money is “the easy part” of it (doing business). Having the story and the vision, now that's where moneys truly made in a sustainable manner.” – Ebrahim El-Ebiary “Discovering the future comes from asking about the legacy that they want to build mixed with free flow working sessions where we pick on each other's ideas jointly.” – Ebrahim El-Ebiary “One thing remains at the heart of business is people. Once we lock in that relationship of trust and joint creativity, then we come back to do business together. That relationship then grows and flourishes, and with that, profits grow and creativity grows and the demand for new products that didn't exist or new services from existing products come to life.” – Ebrahim El-Ebiary “Know the question you're trying to answer before jumping into a detailed analysis or investing in a pricing system software, hiring more people. Just know what question you're answering.” – Ebrahim El-Ebiary   People / Resources Mentioned: Goodyear Tires: http://www.goodyear.com/   Connect with Ebrahim El-Ebiary: LinkedIn: https://www.linkedin.com/in/ebrahim-elebiary/ Email: ebiary@gmail.com   Connect with Mark Stiving:  LinkedIn: https://www.linkedin.com/in/stiving/ Email: mark@impactpricing.com

24 Jan 202228min

This is an Impact Pricing Blog published on December 15, 2021, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/the-best-attitude-for-a-great-value-conversation/ 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

21 Jan 20222min

Costs don't drive pricing, willingness to pay drives prices.  I remember 1989. Yes. I'm that old? I was selling automatic test equipment to the semiconductor industry, and I heard this story on the radio that changed the way. I thought about pricing and costs forever. Intel built the 46 DX, which is the very first dual-core microprocessor in the world. Very expensive.  Of course, AMD decided they were going to create a single core version and they charged a much lower price. So they've taken a lot of business away from it. Yeah. Intel's thinking ‘Hey, we better do something’. So Intel creates a single-core version of their microprocessor and they charge a price more competitive with AMD. And so now they're not losing quite as much business. Now, this story makes all the sense in the world until you learn how Intel made the SX. They first made a DX, a dual-core processor, and then they took an extra manufacturing step with a laser to disable the coprocessor. It actually costs them more to build an SX, a single-core version than it did to build the dual-core version. And yet they sold it at a much lower price. Well, how does that possibly make sense? It makes sense because. Our costs. Aren't what drives our customer's willingness to pay? It's the value to the customer that drives their willingness to pay. We should stop overemphasizing our costs, especially when we're trying to set pricing. It's really about customer value.  We hope you enjoyed this podcast. If you see 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

19 Jan 20222min

Mark Stouse is the Chairman and CEO of Proof Analytics. He was 2020’s Top 10 Most Influential Analytics Leaders. He was also CMO/CCO at Honeywell Aerospace, so he has tons of experience. Mark also hosts his own podcast called “Accelerating Value”, a weekly podcast aimed at guiding people in creating, defending, and proving value with the help of experts. In this episode, Mark discusses how analytics lead SaaS businesses to success as he shares insights most SaaS entrepreneurs need to know about the relationship between analytics and pricing.   Why you have to check out today’s podcast: Discover how a different way of consulting like analytics can help SaaS businesses to become profitable nowadays; Know how much of a game changer analytics is in terms of keeping the relationship between customer loyalty and pricing intact; Find out how the scientific sense of inquiry helps pricing people reach greater heights in relation to sales and pricing with clients   “It isn't that you say, ‘Hey, what are you willing to pay for this?’ That's not the question. You've got to say, ‘tell me about what you're really trying to solve for here and how big a problem is this to you. What would make you feel spectacular?’ Then let's talk about the technical realities, and then let's talk about a price.” – Mark Stouse   Topics Covered: 02:02 – Getting exposed to pricing and learning things through failures with Mark’s experience in Honeywell Aerospace and Proof Analytics 04:06 – Diving into the world of pricing with the help of advisors he trust 06:41 – Starting out in a SaaS company and initially doing consulting: a good way for one to be profitable 09:02 – A different consulting model – analytics – for a better, faster, and cheaper reality nowadays 13:16 – Business and the gap it has with data scientists due to the lack of contextual understanding in both concepts 18:23 – What does Proof Analytics charge for and why is that the right thing for them to charge for? 20:20 – Talking about the concept of 10 models equals 10 questions and how COVID affected the business industry in the past two years 26:05 – The differences in the opportunity costs of small and large companies 30:23 – A model as an indicator of customer success and people’s obsession with margins 33:25 – What makes SaaS beautiful is that it concerns value at all times 35:30 – Mark’s pricing advice for the listeners   Key Takeaways: “If you want to talk about a lesson in the reality of economics, start a SaaS company and you will learn more than you ever dreamed was out there.” – Mark Stouse “The problem has been not the math and not even the data. It has been the issue of how do we operationalize analytics so that everybody is able to make a better decision today than they were making before when they didn't have analytics. It really is taking the existing reality and making it better, faster, cheaper.” – Mark Stouse “Data scientists really don't typically have much subject matter expertise about any part of the business, so as the business person, you have to be very prescriptive with the data scientist in terms of laying out the non-mathematical equation.” – Mark Stouse “If you're a very large enterprise and you're spending $150-$200 million on marketing, what you are really after is maximizing the upside and minimizing the negative impact EPS from bad investments. That's what you're really after. If you are a much smaller company, you're really trying to avoid, among other things, being a two-time loser.” – Mark Stouse “The intersection of customer loyalty and pricing is also a piece that is usually ignored, because pricing is seen in a very short cycle sense rather than something that's a longer time.” – Mark Stouse “The human being has become key to the success of set which probably really and truly always was or should have been. There was just this unhealthy obsession with 90% profit margins.” – Mark Stouse   People / Resources Mentioned: Proof Analytics:https://www.proofanalytics.ai/ Honeywell Aerospace:https://aerospace.honeywell.com/   Connect with Mark Stouse: LinkedIn:https://www.linkedin.com/in/markstouse Email: stouse@proofanalytics.ai   Connect with Mark Stiving:    LinkedIn: https://www.linkedin.com/in/stiving/ Email: mark@impactpricing.com

17 Jan 202238min