1 00:00:00,200 --> 00:00:02,400 Well, hello and thank you all for joining me on another 2 00:00:02,400 --> 00:00:05,200 episode of the professional pricing Society podcast. 3 00:00:05,700 --> 00:00:08,100 My name is Terrence and have we got a good one in store for you 4 00:00:08,100 --> 00:00:09,900 all today. But before we introduce Our 5 00:00:09,900 --> 00:00:13,000 Guest, I would like to remind all of our listeners that we are 6 00:00:13,000 --> 00:00:15,400 actually going to be in Dallas, Texas, very, very soon. 7 00:00:15,800 --> 00:00:18,200 The 34th annual spring pricing and workshop. 8 00:00:18,200 --> 00:00:21,500 Conference will be held there during the first week of May, 9 00:00:21,600 --> 00:00:23,800 which will be May 2nd through the 5th. 10 00:00:24,000 --> 00:00:26,300 You haven't already done. So, or if you are unaware, you 11 00:00:26,300 --> 00:00:28,800 can learn more about that conference and register by 12 00:00:28,800 --> 00:00:32,000 visiting our website. Rising Society.com. 13 00:00:32,400 --> 00:00:35,800 Now our guest today is Adam ha partner and head of the Silicon 14 00:00:35,800 --> 00:00:38,700 Valley office at Simon cougar for 17 years. 15 00:00:38,700 --> 00:00:42,600 Adams, career has focused on value based sales, he's gained 16 00:00:42,600 --> 00:00:46,000 12 months of focus sales training at the Timken company. 17 00:00:46,400 --> 00:00:48,900 It didn't worked outside in industrial cells were five 18 00:00:48,900 --> 00:00:51,600 years. Adam joined Simon, kouta back in 19 00:00:51,600 --> 00:00:55,100 2012 and is Consulting activities have focused on 20 00:00:55,100 --> 00:00:57,700 sales. Excellence value, definition and 21 00:00:57,700 --> 00:01:00,500 Communication business model. Formation. 22 00:01:00,500 --> 00:01:02,900 And of course. Pricing Adam. 23 00:01:02,900 --> 00:01:05,900 How are you doing today, sir? There's I am doing great. 24 00:01:05,900 --> 00:01:07,200 Thank you. Been looking forward to this 25 00:01:07,200 --> 00:01:09,300 conversation for a while. Good. 26 00:01:09,300 --> 00:01:11,300 Good work. We're very glad to have you glad 27 00:01:11,300 --> 00:01:14,200 you're here with us today. I don't want to waste too much 28 00:01:14,200 --> 00:01:15,400 time. Going to go and just jump right 29 00:01:15,400 --> 00:01:18,800 into our discussion. If you wouldn't mind. 30 00:01:18,800 --> 00:01:21,900 You know, you worked for Simon Kuchar, a global consultancy 31 00:01:21,900 --> 00:01:24,700 that's focused on driving measurable revenue, and profit 32 00:01:24,900 --> 00:01:27,500 for your clients. Now, can you elaborate on what 33 00:01:27,500 --> 00:01:30,400 you exactly do for the company? Company. 34 00:01:30,800 --> 00:01:34,700 Absolutely. So, you know, I think you can't 35 00:01:34,700 --> 00:01:38,000 have a pricing consultancy and not know about the pricing 36 00:01:38,000 --> 00:01:41,200 Society. So, I've been as a partner here, 37 00:01:41,200 --> 00:01:44,600 you know, I work on projects that tub all sorts of different 38 00:01:44,600 --> 00:01:48,600 areas and different Industries and sectors been here for over a 39 00:01:48,600 --> 00:01:52,300 decade now and we're doing pricing for more than 20 years. 40 00:01:52,300 --> 00:01:56,500 I think I was mentioning that my first PPS, I went to in Chicago, 41 00:01:56,500 --> 00:01:59,800 in 2003. Yeah, long time PPS. 42 00:02:00,000 --> 00:02:01,100 Advocate. Yeah. 43 00:02:01,300 --> 00:02:04,200 And so today you know I've had a chance to work across a lot of 44 00:02:04,208 --> 00:02:07,200 different mediums and industries from a pricing perspective. 45 00:02:07,200 --> 00:02:10,500 Most of what I find Most Fascinating right now is having 46 00:02:10,500 --> 00:02:13,400 Industrials background. But sitting in Silicon Valley, 47 00:02:13,700 --> 00:02:15,700 I've learned how to speak Industrials. 48 00:02:15,700 --> 00:02:18,700 I learned how to speak software and I can put those together and 49 00:02:18,700 --> 00:02:21,500 help companies that have Hardware software combinations 50 00:02:21,800 --> 00:02:23,900 and how they think through those monetization challenges. 51 00:02:24,600 --> 00:02:27,900 But yeah, we're at a point here in the company where a lot of 52 00:02:27,900 --> 00:02:31,400 what I do is help companies. Think through their monetization 53 00:02:31,400 --> 00:02:33,900 challenges, whether it's the price level. 54 00:02:34,100 --> 00:02:38,300 Are we charging the right amount or more evolved about a pricing 55 00:02:38,300 --> 00:02:41,200 strategy. What is my metrics? 56 00:02:41,200 --> 00:02:43,900 What's my model? Am I charging the right way? 57 00:02:44,100 --> 00:02:46,300 We'll use the Expression. How you charge is more important 58 00:02:46,300 --> 00:02:49,900 than how much. And so, I have the luxury of 59 00:02:49,900 --> 00:02:52,700 getting to work with different companies and see different 60 00:02:52,700 --> 00:02:55,300 pricing projects, all day, every day, and keep my mind focused on 61 00:02:55,300 --> 00:02:57,200 the top line. Laughs. 62 00:02:57,200 --> 00:02:59,600 That is awesome. Well, you sound like a very, 63 00:02:59,600 --> 00:03:02,700 very important man. And of course, based on your 64 00:03:02,700 --> 00:03:06,500 background you have a lot of experience in this experience 65 00:03:06,500 --> 00:03:09,500 and expertise really, in pricing, really a number of 66 00:03:09,508 --> 00:03:12,800 different Fashions but in price and in particular so much. 67 00:03:12,800 --> 00:03:16,300 So in fact that you decided to write a book and this book is 68 00:03:16,300 --> 00:03:19,900 called beating inflation. Now, what made you write this 69 00:03:19,900 --> 00:03:22,400 but what kind of what was the Catalyst and starting this, 70 00:03:23,000 --> 00:03:24,500 this, this written piece you have? 71 00:03:24,800 --> 00:03:28,700 Yeah, I think you know, when you In a firm like salmon Kuchar, 72 00:03:28,700 --> 00:03:31,800 which, you know, we have published more than 40 books. 73 00:03:31,800 --> 00:03:34,200 Thought leadership is sort of one of the rules that we have in 74 00:03:34,200 --> 00:03:38,100 the marketplace, is where tasked with thinking about where price 75 00:03:38,100 --> 00:03:41,400 is going, where pricing is going next and you know how people can 76 00:03:41,400 --> 00:03:43,600 think about that in advance and get a leg up. 77 00:03:44,900 --> 00:03:47,200 So, when you join you, I guess you kind of think and hope one 78 00:03:47,200 --> 00:03:48,700 day, maybe you'll have a chance to write a book. 79 00:03:48,700 --> 00:03:50,100 So it was always in the back of my mind. 80 00:03:50,100 --> 00:03:54,600 But covid hit. And, you know, you had a handful 81 00:03:54,600 --> 00:03:57,700 of us myself, Herman, Simon, who, Damn affirm and couple of 82 00:03:57,700 --> 00:03:59,700 others who were really interested in just monetary 83 00:03:59,700 --> 00:04:02,600 policies, currency Financial questions, and we thought to 84 00:04:02,600 --> 00:04:05,000 ourselves, man. It's going to have some material 85 00:04:05,000 --> 00:04:08,500 effects on the amount of stuff out there. 86 00:04:08,500 --> 00:04:10,300 You're right. If you can't have as many people 87 00:04:10,300 --> 00:04:13,800 in the factory capacity is going to go down, demand might go one 88 00:04:13,800 --> 00:04:15,300 way or another what's going to happen? 89 00:04:15,900 --> 00:04:19,600 So the seed was planted really early in the pandemic like, hmm. 90 00:04:19,600 --> 00:04:23,500 This Could Be A disruption that could lead to some inflationary 91 00:04:23,500 --> 00:04:27,400 effects and then in our day job, you know, we See those things 92 00:04:27,400 --> 00:04:31,200 roll in and we live through that that claims of transitory 93 00:04:31,200 --> 00:04:35,700 issues, some of the spike and occurrences that happen when 94 00:04:35,700 --> 00:04:39,100 Texas froze years ago, some of you might remember that that 95 00:04:39,100 --> 00:04:42,100 took the Americas Plastic industry offline, pricing went 96 00:04:42,100 --> 00:04:45,900 crazy, that Lumber went nuts, and you started to see Supply 97 00:04:45,900 --> 00:04:49,600 chains back and up and there was this whole chatter around man, 98 00:04:49,900 --> 00:04:52,800 it's all going to pass. But we were getting the phone 99 00:04:52,800 --> 00:04:55,400 calls. We were looking at the M1 money 100 00:04:55,400 --> 00:04:56,900 supply. We were thinking About 101 00:04:56,900 --> 00:05:02,800 supply-demand balances, you know, way back then and started 102 00:05:02,800 --> 00:05:04,900 to reach the conclusion that this could look a lot. 103 00:05:04,900 --> 00:05:06,900 Like the 70s and Herman was around back. 104 00:05:06,900 --> 00:05:09,900 Then I had the pleasure of also working with a couple of other 105 00:05:09,900 --> 00:05:14,300 great, thinkers Ram, Charan and others who were tasked with 106 00:05:14,300 --> 00:05:17,400 beating inflation in the 70s. And this group reached the 107 00:05:17,400 --> 00:05:19,500 conclusion that there might be something there. 108 00:05:20,300 --> 00:05:23,100 We held a podcast a while ago, and it want to crashing. 109 00:05:23,100 --> 00:05:26,300 The server is because so many people dialed in this was 20 21. 110 00:05:27,100 --> 00:05:30,800 To yeah, we thought. Okay it's real. 111 00:05:31,100 --> 00:05:33,500 Yeah, we started. We felt a little crazy kind of 112 00:05:33,500 --> 00:05:35,900 sounding the alarm early in the process. 113 00:05:36,400 --> 00:05:40,000 But then, as as the number started rolling in, I think we 114 00:05:40,000 --> 00:05:42,800 had most of the content put together in the first half of 115 00:05:42,800 --> 00:05:44,900 2022, right? As those inflation numbers 116 00:05:44,900 --> 00:05:49,100 really took off and so it turned out to be a timely thing to 117 00:05:49,100 --> 00:05:53,600 think about, hmm. Sounds like it now you know, 118 00:05:53,600 --> 00:05:58,100 when thinking about this book and its readers As you know if 119 00:05:58,100 --> 00:06:00,800 you can explain to us, you know who really should be reading 120 00:06:01,100 --> 00:06:04,500 beating inflation and what type of Industries or businesses are 121 00:06:04,500 --> 00:06:07,000 going to really benefit from from this piece. 122 00:06:07,000 --> 00:06:10,600 Do you think great point? I think we put a lot of effort 123 00:06:10,600 --> 00:06:14,100 into thinking through not a specific. 124 00:06:14,400 --> 00:06:16,500 Here's how it would be to be person thinks about it but try 125 00:06:16,500 --> 00:06:19,600 to give examples and move across all the different Industries. 126 00:06:20,000 --> 00:06:23,300 I think this is a shorthand answer would be we wrote it to 127 00:06:23,300 --> 00:06:27,600 cover all the different areas of a business and So candidly. 128 00:06:27,600 --> 00:06:31,500 Yeah, you could say that this is not a pricing exclusively book. 129 00:06:31,900 --> 00:06:34,100 It has a section on how to see if ocean think about it. 130 00:06:34,100 --> 00:06:35,900 How procurement can think about this? 131 00:06:35,900 --> 00:06:38,300 We tried to go across the different areas of the business. 132 00:06:41,000 --> 00:06:43,200 And sit in their seats and think about it. 133 00:06:43,600 --> 00:06:47,800 And then we also illustrate how Industries experience at a 134 00:06:47,808 --> 00:06:50,400 different rate. So, most people now, realize 135 00:06:50,400 --> 00:06:54,200 men, groceries that happened. Fast Commodities, you know, when 136 00:06:54,200 --> 00:06:57,700 you got two, three, four, five percent margin, you need to move 137 00:06:57,700 --> 00:07:01,900 fast then we so that was the early movers and that was that 138 00:07:02,100 --> 00:07:06,400 that first signal we saw years ago then you settled into 139 00:07:06,800 --> 00:07:09,400 complicated industrial manufacture Goods. 140 00:07:09,800 --> 00:07:14,000 Lot of different inputs, metal labor, Transportation fuel. 141 00:07:14,400 --> 00:07:18,200 But man, they couldn't, they couldn't Stave off inflation. 142 00:07:18,200 --> 00:07:21,600 So they had to move and now we're seeing the later stage 143 00:07:21,600 --> 00:07:25,200 companies Business Services software that may be, felt they 144 00:07:25,200 --> 00:07:27,400 were immune because they didn't have a lot of metal. 145 00:07:27,400 --> 00:07:32,900 They weren't burning diesel. Yeah, as the wage inflation 146 00:07:32,900 --> 00:07:36,400 cycle kicks in, they're starting to feel the pressures. 147 00:07:36,900 --> 00:07:40,300 So the book is structured, it kind of speak to different um, 148 00:07:41,400 --> 00:07:45,900 Different roles inside the company and different industry 149 00:07:45,900 --> 00:07:48,400 segments. But the reader could be anybody 150 00:07:48,400 --> 00:07:51,700 who has a business interest in making sure that they can kind 151 00:07:51,700 --> 00:07:53,100 of adapt to the current environment. 152 00:07:53,100 --> 00:07:58,600 It's not a book that says man, take your 401k and put it into 153 00:07:58,600 --> 00:08:00,200 Bitcoin. It's not about personal 154 00:08:00,200 --> 00:08:02,800 investing, sure, it's not about there. 155 00:08:02,800 --> 00:08:04,700 There's some others out there that get into that topic. 156 00:08:04,700 --> 00:08:08,100 There's others that talk about, you know, you know, he's 157 00:08:08,100 --> 00:08:11,400 inflation going to lead to the downfall of societies like 158 00:08:11,400 --> 00:08:13,800 There's much more dark clouds. What are you saying? 159 00:08:13,800 --> 00:08:16,400 Look inflation comes and goes It goes up and down and it's 160 00:08:16,400 --> 00:08:18,300 magnitude. This is always been around. 161 00:08:18,900 --> 00:08:21,500 We're going to we're going to experience something none of us 162 00:08:21,500 --> 00:08:24,500 as business professionals have seen before practically 163 00:08:24,500 --> 00:08:26,800 speaking. It was not a lot of people in 164 00:08:26,800 --> 00:08:29,600 the workforce today who were around in the 1970s, in an 165 00:08:29,600 --> 00:08:32,200 active job. And so, how can we tell the 166 00:08:32,208 --> 00:08:35,000 story? How can we show folks that, you 167 00:08:35,000 --> 00:08:37,799 know, here's how you can think about this and adapt. 168 00:08:39,200 --> 00:08:40,600 That's good. I'm glad you clarified. 169 00:08:40,600 --> 00:08:43,500 That, you know this is really For anybody who has the interest 170 00:08:44,300 --> 00:08:47,400 and apparently it's been affecting majority if not all 171 00:08:47,400 --> 00:08:50,200 types of Industries and in companies, according to 172 00:08:50,200 --> 00:08:55,000 yourself, do you have any tips for companies or leaders? 173 00:08:55,200 --> 00:08:59,100 They are trying to survive inflation with a minimal loss. 174 00:09:02,200 --> 00:09:06,600 Good question. I think you've got an audience 175 00:09:06,600 --> 00:09:08,500 in the PVS. That's probably our friend 176 00:09:08,500 --> 00:09:10,200 Center of all this and they're being nice. 177 00:09:10,200 --> 00:09:12,400 That question, right? Hey, we need to get through 178 00:09:12,400 --> 00:09:15,200 this. We need to respond but we can 179 00:09:15,600 --> 00:09:19,300 lose a single point of margin. We can't lose a single customer. 180 00:09:19,600 --> 00:09:24,100 We can't lose a single Revenue dollar and I think framing that 181 00:09:24,100 --> 00:09:27,100 up and understanding that you know what is lost look like. 182 00:09:27,700 --> 00:09:31,800 And how to think about surviving this phase is really important 183 00:09:32,000 --> 00:09:33,800 for your audience, whatever because they're going to be 184 00:09:33,800 --> 00:09:34,900 asked to do the impossible, right? 185 00:09:35,100 --> 00:09:36,800 Right. Join to get more volume, more 186 00:09:36,800 --> 00:09:39,600 revenue, and more profit simultaneously because you have 187 00:09:39,600 --> 00:09:44,800 all through a couple things that we were able to pin down using 188 00:09:44,800 --> 00:09:47,800 examples and real world. Kind of elasticities, and 189 00:09:47,800 --> 00:09:52,300 responses that idea of getting through this unscathed and 190 00:09:52,300 --> 00:09:54,100 probably not the right way to approach it. 191 00:09:54,400 --> 00:09:58,000 It's more of how can we accept? The next decade is going to be 192 00:09:58,000 --> 00:09:59,900 totally different from the last decade. 193 00:10:00,500 --> 00:10:03,800 And then just think about how we need to adapt and we're going 194 00:10:03,800 --> 00:10:08,900 through a transition. This 2022 2023 phase is going to 195 00:10:08,900 --> 00:10:13,200 be transitory and how we adapt and evolve into it and then 196 00:10:13,200 --> 00:10:16,600 we'll probably settle back into more of a profit expansion mode. 197 00:10:17,300 --> 00:10:21,400 But in the short term, we do arrive at sort of a couple 198 00:10:21,900 --> 00:10:25,400 high-level ratios. One being you can recover about 199 00:10:25,400 --> 00:10:30,500 50% of the inflationary effect via price increase, but if you 200 00:10:30,500 --> 00:10:34,100 try to do 100% forever, it's suboptimal, you know, price 201 00:10:34,100 --> 00:10:37,200 elasticity is Real people will respond, they'll trade down, 202 00:10:37,200 --> 00:10:40,400 they'll substitute, they'll not they'll choose not to purchase 203 00:10:40,400 --> 00:10:43,300 and that is worse for you than maybe transacting at a slightly 204 00:10:43,300 --> 00:10:46,400 lower price. So it is industry-specific and 205 00:10:46,400 --> 00:10:49,500 it's every company has to look at their own situation. 206 00:10:49,500 --> 00:10:52,900 But one message we get across is you can get about 50 percent of 207 00:10:52,900 --> 00:10:55,900 your costs and inflationary costs recovered through price. 208 00:10:56,500 --> 00:11:01,700 Maybe another 20, 25 percent through Cost efficiency and cost 209 00:11:01,700 --> 00:11:04,700 take out, but in the short term, you're probably going to have to 210 00:11:04,700 --> 00:11:09,700 absorb 25 to 30 percent just to get through this, in the, in 211 00:11:09,700 --> 00:11:12,100 again, in the very short term. And I think that's the sort of 212 00:11:12,100 --> 00:11:15,600 thing that's, you can see, in the stock market, businesses are 213 00:11:15,600 --> 00:11:17,400 coming down in their evaluations, as they're all 214 00:11:17,400 --> 00:11:19,600 realizing that they have to absorb some of it. 215 00:11:20,800 --> 00:11:22,600 So that's a, that's a big mindset shift. 216 00:11:22,600 --> 00:11:26,100 We talked about which is good though, it sounds like it's 217 00:11:26,100 --> 00:11:29,000 necessary. Yeah, kind of having to bite the 218 00:11:29,000 --> 00:11:32,700 bullet, if you will over It is and I think maybe if I give it, 219 00:11:32,700 --> 00:11:36,000 give your are speaking to the audience, the PPS, right? 220 00:11:36,800 --> 00:11:39,000 And knowing that you've got some people who are two years into 221 00:11:39,000 --> 00:11:40,200 this. And some people who are two 222 00:11:40,200 --> 00:11:43,700 months of this because different management different Paces. 223 00:11:45,700 --> 00:11:48,600 The simple talking points would be First, Take Action. 224 00:11:48,900 --> 00:11:53,600 Like, when we did a survey about having done inflationary price 225 00:11:53,600 --> 00:11:58,700 adjustment in the first quarter of 2022. 226 00:11:58,700 --> 00:12:04,400 So, a year ago, 30% of people, still hadn't done anything that 227 00:12:04,400 --> 00:12:06,600 blew my mind because I've been thinking about it for years and 228 00:12:06,600 --> 00:12:09,500 thought this is obvious but a third executive said still not 229 00:12:09,500 --> 00:12:11,900 done and inflationary price in just twenty year ago, just 230 00:12:11,900 --> 00:12:14,900 wrapped up. This year's 10% still haven't 231 00:12:14,900 --> 00:12:18,100 done anything so if you're in the camp where you're trying to 232 00:12:18,108 --> 00:12:22,200 get through this and hoping it'll pass We hope that some of 233 00:12:22,200 --> 00:12:26,300 argumentation will help people realize it's not going away. 234 00:12:28,200 --> 00:12:30,900 It's not the end of the world. We don't predict runaway 20 235 00:12:30,900 --> 00:12:32,800 percent inflation or hyperinflation. 236 00:12:32,900 --> 00:12:34,800 Sure, you just got our new numbers out. 237 00:12:34,800 --> 00:12:37,100 Yeah, this week. It's Valentine's Day, right? 238 00:12:37,100 --> 00:12:39,100 6.4. So people are like, yeah, we're 239 00:12:39,100 --> 00:12:42,600 down from nine. That's still four times higher 240 00:12:42,600 --> 00:12:44,100 than it's been for the last decade. 241 00:12:44,100 --> 00:12:46,200 Right? Relatively down. 242 00:12:46,200 --> 00:12:51,200 But, you know, it's not back to two or one and a half and so you 243 00:12:51,200 --> 00:12:54,500 got to take some action, we think that that sort of the 244 00:12:54,508 --> 00:12:55,900 first thing. And we talked about some of the 245 00:12:55,900 --> 00:12:58,500 things you can do the very tactical people's. 246 00:12:58,800 --> 00:13:01,000 So if you're just starting to take some actions, obviously 247 00:13:01,000 --> 00:13:03,100 there's price adjustments, but then you get in the world of 248 00:13:03,100 --> 00:13:06,600 surcharges and fees in some Industries, forgot about those 249 00:13:06,600 --> 00:13:09,400 those are great deployment tool, right? 250 00:13:09,400 --> 00:13:11,300 At the beginning. You can usually get around 251 00:13:11,300 --> 00:13:14,300 contracts that might restrict you from making a price change 252 00:13:14,400 --> 00:13:16,600 but they don't necessarily speak to surcharges. 253 00:13:18,300 --> 00:13:22,000 People can point to it and say, oh, I get it, you know, few year 254 00:13:22,000 --> 00:13:25,100 ago, guess gas prices are up. We understand as a fuel 255 00:13:25,100 --> 00:13:27,800 surcharge, there's a lot more involved versions of that. 256 00:13:28,500 --> 00:13:31,000 In different Industries, you can charge for availability for 257 00:13:31,000 --> 00:13:34,400 capacity, things of that nature. But those came roaring back 258 00:13:34,900 --> 00:13:37,900 again first with those commodity Goods, then with industrial 259 00:13:37,900 --> 00:13:39,800 manufacturers. Now, Professional Services, 260 00:13:39,800 --> 00:13:42,800 firms, or Now to do this. So those are some tactical 261 00:13:42,800 --> 00:13:45,400 things prices can do the other. Real tactical thing was just T's 262 00:13:45,400 --> 00:13:48,300 and C's digging into your contract. 263 00:13:48,300 --> 00:13:50,900 Realizing you can do things that you haven't been able to do for 264 00:13:50,900 --> 00:13:53,700 15 years. You know, anyone at the PPS, 265 00:13:53,700 --> 00:13:57,200 knows the last 12 years of whatever record growth 266 00:13:57,200 --> 00:14:02,200 environment, the sellers were arguably a disadvantages and the 267 00:14:02,200 --> 00:14:05,300 buyers are in the damage. That pendulum is come swinging. 268 00:14:05,300 --> 00:14:07,300 Back the other way really quickly. 269 00:14:07,900 --> 00:14:09,900 And so if you've already done pricing moved and you've already 270 00:14:09,900 --> 00:14:12,800 done some surcharges, the other place to look, early is in your 271 00:14:12,800 --> 00:14:16,900 t's and C's switch that stuff in your favor, give yourself more 272 00:14:16,900 --> 00:14:20,700 flexibility and adaptability there and that's some stuff that 273 00:14:21,100 --> 00:14:25,500 anyone the PPS, use a front line, pricing job and you're one 274 00:14:25,500 --> 00:14:27,500 of those lagging Industries. You probably think about that 275 00:14:27,500 --> 00:14:30,000 now. You're on this podcast and 276 00:14:30,000 --> 00:14:32,100 you're one of those leading Industries you're like, hey man, 277 00:14:32,100 --> 00:14:33,800 I did that two years ago. What else you got for me? 278 00:14:34,800 --> 00:14:41,800 So now for that audience, it's really more about pricing power 279 00:14:42,200 --> 00:14:43,900 and getting into that topic. Yep. 280 00:14:44,600 --> 00:14:46,900 Yep, that was actually just going there because in your 281 00:14:46,900 --> 00:14:51,300 book, you mention this term pricing power, you know, if you 282 00:14:51,300 --> 00:14:53,700 don't mind elaborate on what that is exactly for those who 283 00:14:53,700 --> 00:14:57,300 may not be aware, and why it's so important to have pricing 284 00:14:57,300 --> 00:15:01,500 power and you know, in your organization Yeah, so I think 285 00:15:01,500 --> 00:15:04,400 the academic definition is the ability of affirmative charge 286 00:15:04,400 --> 00:15:09,400 the prices at desires for its goods and services and then the 287 00:15:09,400 --> 00:15:13,200 candida advantage or the candid word that you'll hear us use. 288 00:15:13,200 --> 00:15:15,300 And if you've been to some PPS events, you may have seen in 289 00:15:15,300 --> 00:15:17,900 some of our Keynotes. You know, Warren Buffett, said 290 00:15:18,500 --> 00:15:22,700 about a decade ago, if you can raise prices, 10%, without 291 00:15:22,700 --> 00:15:25,500 worrying, and losing sleep, you've got a great business. 292 00:15:26,000 --> 00:15:28,700 If you have to have a prayer session before changing prices 293 00:15:28,700 --> 00:15:32,100 1%, You've got a lousy business, so that's another way to just 294 00:15:32,100 --> 00:15:33,900 look at pricing power. It's one of those sort of 295 00:15:33,908 --> 00:15:37,300 nebulous things, but now, the company generally knows, hey 296 00:15:37,300 --> 00:15:41,300 man, we got to go out there. We're the leader, we got to 297 00:15:41,308 --> 00:15:43,000 move, it's going to be uncomfortable. 298 00:15:43,000 --> 00:15:44,800 Customers aren't going to like, but we're gonna get it done. 299 00:15:45,700 --> 00:15:49,700 Company, has that mindset and about 30% in our surveys respond 300 00:15:49,700 --> 00:15:52,600 that way. And then the companies where 301 00:15:52,600 --> 00:15:55,100 it's like, oh my gosh, we can't do that, we can't ask for it, 302 00:15:55,100 --> 00:15:57,300 everything's going. We're going to go over a cliff 303 00:15:57,300 --> 00:15:58,500 tomorrow, everyone's gonna run away. 304 00:15:59,800 --> 00:16:02,100 That's an indicator of a company that doesn't believe. 305 00:16:02,100 --> 00:16:05,800 They have pricing power and I think that sort of gets to the 306 00:16:05,800 --> 00:16:12,500 core of where we are right now is if we believe the next decade 307 00:16:12,500 --> 00:16:16,800 is materially different from the last decade in the books. 308 00:16:16,800 --> 00:16:22,500 And Actually get to join you all in Texas in May where I'll be 309 00:16:22,900 --> 00:16:24,800 giving kind of the keynote flavor of this and you'll see a 310 00:16:24,808 --> 00:16:28,000 lot of numbers and statistics about if you had a dollar in 311 00:16:28,000 --> 00:16:31,700 your pocket, at the end of the start of 2010, 10 years later it 312 00:16:31,700 --> 00:16:35,400 inflated to a dollar 17. If you had a dollar in your 313 00:16:35,400 --> 00:16:39,400 pocket at the start of 2020 and the first three years of this 314 00:16:39,400 --> 00:16:42,100 decade is already inflated $2.13. 315 00:16:43,000 --> 00:16:46,600 So its up 68% of inflation in just thirty percent of the time 316 00:16:47,200 --> 00:16:50,800 and if we keep Going and I assume a 5% rate which is lower 317 00:16:50,800 --> 00:16:54,600 than where we are right now, that dollar is going to go up to 318 00:16:54,600 --> 00:16:56,800 a dollar 63 by the end of this decade. 319 00:16:57,200 --> 00:17:00,500 And the important number is, are the 63 verse the 17th. 320 00:17:00,500 --> 00:17:04,500 So, we're on track for about four times the inflationary 321 00:17:04,500 --> 00:17:07,599 effect and that's where pricing power becomes. 322 00:17:07,599 --> 00:17:11,099 Super important that a lot of companies really don't 323 00:17:11,099 --> 00:17:13,099 understand what their position is. 324 00:17:13,200 --> 00:17:15,500 I think many of them learned in these last two years. 325 00:17:16,400 --> 00:17:17,900 Man we went out and did that price increase. 326 00:17:17,900 --> 00:17:21,099 We never thought was going to never thought possible and it's 327 00:17:21,099 --> 00:17:22,300 stuck. Hmm. 328 00:17:22,400 --> 00:17:23,900 Right. So one of the listeners is in 329 00:17:23,900 --> 00:17:27,000 that camp, you have more pricing power than you give yourself 330 00:17:27,000 --> 00:17:30,800 credit for and I would argue the vast majority of businesses. 331 00:17:31,900 --> 00:17:35,100 Have more power than they understand and or comfortable 332 00:17:35,100 --> 00:17:38,100 flexing. And so, I think that's what the 333 00:17:38,100 --> 00:17:41,800 game is going to be here. In the next decade of the 2020s, 334 00:17:42,400 --> 00:17:47,800 is systematically figuring out, how to understand your current 335 00:17:47,800 --> 00:17:50,900 position. The only way to do that is get 336 00:17:50,900 --> 00:17:53,900 comfortable talking to your Market collecting information, 337 00:17:54,700 --> 00:17:56,500 and forming an opinion on where you are. 338 00:17:57,200 --> 00:18:00,100 And then once you believe and it's never accurate, right? 339 00:18:00,100 --> 00:18:03,500 It's kind of like, Like elasticity is a concept, not a 340 00:18:03,508 --> 00:18:07,300 point, I'm sure, you know, where you are in a market. 341 00:18:07,400 --> 00:18:11,600 It's more of a range, not a engineered solution, but 342 00:18:11,600 --> 00:18:13,500 companies got to get good at saying. 343 00:18:13,600 --> 00:18:16,100 This is where we are. Once they can take a stand on 344 00:18:16,100 --> 00:18:17,800 where they are, they can understand what their options 345 00:18:17,800 --> 00:18:22,200 are in the short term for exploding pricing power and then 346 00:18:22,800 --> 00:18:24,400 they can start asking the bidding question. 347 00:18:24,400 --> 00:18:26,800 Which is what I think 2020 is are all going to be about is how 348 00:18:26,800 --> 00:18:29,300 do I build and sustain pricing power over time? 349 00:18:31,700 --> 00:18:33,000 I can go deeper into any of the stuff. 350 00:18:33,000 --> 00:18:34,800 A good tip. If you feel like it's going the 351 00:18:34,800 --> 00:18:37,700 right direction for you, but that sets up the basics of 352 00:18:38,700 --> 00:18:40,700 maybe, what pricing power is the balance. 353 00:18:40,700 --> 00:18:45,600 Some people have versus perception and How they can be 354 00:18:45,600 --> 00:18:48,500 thinking about it and your audience, the PBS thinking about 355 00:18:48,600 --> 00:18:51,900 2023 and the years ahead, and the name of the game I think is 356 00:18:51,900 --> 00:18:56,600 really going to be pricing, power pricing power, a very 357 00:18:56,600 --> 00:19:00,100 notable Jim from mr. Adam himself. 358 00:19:00,400 --> 00:19:02,700 Now you also alluded to it previously. 359 00:19:02,700 --> 00:19:07,300 But you know what should Business Leaders do to further 360 00:19:07,300 --> 00:19:10,800 protect their businesses against some of the different effects of 361 00:19:10,800 --> 00:19:13,000 inflation? You you kind of tease it before 362 00:19:13,000 --> 00:19:18,600 but not sure if you Have. Any other actionable steps? 363 00:19:18,800 --> 00:19:22,200 Yeah. The Hallmark there, or the, the 364 00:19:22,200 --> 00:19:25,600 tagline there is going to be about agility and so from a 365 00:19:25,608 --> 00:19:28,900 pricing perspective, you guys are living in this day-to-day. 366 00:19:29,200 --> 00:19:33,300 Your audience, right? So long gone are the days of 367 00:19:33,300 --> 00:19:36,300 once a year price adjustments and that what used to be once a 368 00:19:36,308 --> 00:19:39,100 year is now once a quarter, he used to be one supporters once a 369 00:19:39,100 --> 00:19:41,500 month. I bet you've got people on your 370 00:19:41,500 --> 00:19:45,500 audience, to their experience. In 2022 is used to do once a 371 00:19:45,500 --> 00:19:47,000 year. I just Six price adjustments 372 00:19:47,000 --> 00:19:51,200 last year, it's crazy and that's not going away. 373 00:19:52,200 --> 00:19:55,800 So what we're seeing right now is a lot of people trying to 374 00:19:55,800 --> 00:20:01,200 systematize that agility. So instead of and I think your 375 00:20:01,200 --> 00:20:04,700 audience would appreciate and we are broadly of the opinion that 376 00:20:04,700 --> 00:20:07,800 sort of investment in the pricing function might have 377 00:20:07,800 --> 00:20:11,000 atrophied in the 2010s, you know, money was free. 378 00:20:11,500 --> 00:20:14,200 You want to grow a business, will take out some debt and grow 379 00:20:14,200 --> 00:20:18,500 volume and the idea of profitability and profitable 380 00:20:18,500 --> 00:20:20,700 growth and price. Defense might have been 381 00:20:20,700 --> 00:20:26,000 secondary to just pure volumetric expansion in a low 382 00:20:26,000 --> 00:20:30,600 borrowing, environment 2020 2020. 383 00:20:30,600 --> 00:20:33,800 These are going to be all about paying attention to margin. 384 00:20:33,800 --> 00:20:37,000 I think pricing as a job and as a function is going to get a lot 385 00:20:37,000 --> 00:20:38,300 more attention. This decade. 386 00:20:38,300 --> 00:20:42,200 And last, which is great. Great for your, your membership 387 00:20:42,200 --> 00:20:45,000 and your audience. And what they're trying to do is 388 00:20:45,100 --> 00:20:49,500 is system Eyes that agility. And so we're seeing people 389 00:20:49,500 --> 00:20:52,000 calling up saying, how do I build the backend systems that 390 00:20:52,000 --> 00:20:54,900 let me do pricing refresh, faster? 391 00:20:55,400 --> 00:21:00,200 How do I build out the teams in the people that make sure I can 392 00:21:00,200 --> 00:21:05,400 do this in a thoughtful way, not just overwhelm the two people in 393 00:21:05,400 --> 00:21:09,300 the room that have to reprice the sheets globally, Alderman by 394 00:21:09,300 --> 00:21:13,500 themselves and then practically for your audience. 395 00:21:13,500 --> 00:21:16,800 I think if you're setting prices or your stereo, Earring deals 396 00:21:16,800 --> 00:21:20,200 and negotiations on the client interaction face. 397 00:21:20,200 --> 00:21:25,700 It's Contracting right now. Can you get out of five year 398 00:21:25,700 --> 00:21:28,100 deals for one year deals? If you think your product is 399 00:21:28,100 --> 00:21:34,500 adding value? 90-day alerts before a price 400 00:21:34,500 --> 00:21:38,200 increase or becoming 60. Then 30 can you retroactively 401 00:21:38,200 --> 00:21:39,600 reprice? Your backlog. 402 00:21:39,900 --> 00:21:42,400 I bet you've got some members who actually did that, we're 403 00:21:42,400 --> 00:21:46,200 seeing that come back and so having the Contracting 404 00:21:46,800 --> 00:21:51,300 flexibility to operate in a more agile world. 405 00:21:51,800 --> 00:21:55,600 I think that shaken out right now, while companies are also 406 00:21:55,600 --> 00:21:58,700 building out the systems in teams to enable this agility, 407 00:21:59,100 --> 00:22:01,900 yeah now kind of stretching on that. 408 00:22:02,100 --> 00:22:05,600 Question. You know, do you feel that most 409 00:22:05,700 --> 00:22:08,400 or a lot of companies today have that contractual flexibility? 410 00:22:09,100 --> 00:22:14,100 I don't and it's not kind of a finger pointing comment or 411 00:22:14,100 --> 00:22:17,300 thought it's more of this happened so quick. 412 00:22:17,700 --> 00:22:23,400 Right. It's 2019 and people are 413 00:22:23,800 --> 00:22:27,000 growing, they're signed a multi-year contract. 414 00:22:27,000 --> 00:22:29,400 Sellers are on their heels, everyone's fighting for share, 415 00:22:29,400 --> 00:22:33,400 so you were setting up contracts If you think most economic 416 00:22:33,400 --> 00:22:36,900 Cycles are like seven years, that was a 11-year run. 417 00:22:37,000 --> 00:22:41,500 Yeah, so that was an extended period of time to make weaker 418 00:22:41,500 --> 00:22:43,900 weaker contracts are contracts, that were more favorable to the 419 00:22:43,900 --> 00:22:48,800 buyer, an abnormally long, economic cycle, then Ian covid 420 00:22:48,800 --> 00:22:54,200 and everyone sort of freaked out and at first it was just kind of 421 00:22:54,208 --> 00:22:57,300 keep the lights on am I going to survive and so you would cut a 422 00:22:57,300 --> 00:23:00,100 deal if someone called you in April of 2020 and said I want to 423 00:23:00,100 --> 00:23:01,900 buy some stuff you might give them some end. 424 00:23:02,000 --> 00:23:05,500 Normal Contracting and you might lock in a contract because you 425 00:23:05,500 --> 00:23:07,300 didn't know what was going to happen next month. 426 00:23:07,800 --> 00:23:10,900 So I think there was a couple of anomalous, things that resulted 427 00:23:10,900 --> 00:23:17,200 in Contracts that might not be the ones you'd like today, and 428 00:23:17,200 --> 00:23:18,700 those are just have to work through the system. 429 00:23:19,000 --> 00:23:22,700 We spent a lot of time with people, there's probably been an 430 00:23:22,700 --> 00:23:26,200 abnormal and a record amount of kind of force, majeure, and 431 00:23:26,200 --> 00:23:29,600 contract breaking in the last two or three years, because of 432 00:23:29,600 --> 00:23:33,000 covid. I think that's going to come to 433 00:23:33,000 --> 00:23:36,400 a close. And, you know, if you have to 434 00:23:36,400 --> 00:23:39,400 break a contract, now, it's just because you regret a contract, 435 00:23:39,400 --> 00:23:44,200 you signed and Tony Stewart. But what you will see is more of 436 00:23:44,200 --> 00:23:47,900 this as contracts for rolling and renewing, you have got to 437 00:23:47,900 --> 00:23:50,700 remember like the power of the pendulum has swung in your favor 438 00:23:50,700 --> 00:23:54,000 and it's a part of pricing. So you can get economic 439 00:23:54,000 --> 00:23:57,300 advantage through the price levels through the fees and 440 00:23:57,300 --> 00:24:02,900 surcharges bore the Contracting terms and leveraging that for 441 00:24:02,900 --> 00:24:06,300 through the pricing Department in team to really push, and 442 00:24:06,300 --> 00:24:10,400 ensure your business is doing well, during the cycle, that's 443 00:24:10,400 --> 00:24:12,800 going to be different. Okay. 444 00:24:13,500 --> 00:24:16,100 Alright, well, hey Adam, I really do appreciate your time 445 00:24:16,100 --> 00:24:18,600 today and he does have his latest book out beating 446 00:24:18,600 --> 00:24:21,000 inflation. If you do have interest, I would 447 00:24:21,000 --> 00:24:23,200 highly recommend it. You I'll take advantage of that 448 00:24:23,300 --> 00:24:24,900 Adam. If you don't mind, we're can 449 00:24:25,200 --> 00:24:29,500 listeners access this book or maybe learn more about you and 450 00:24:29,500 --> 00:24:33,600 Simon culture. Oh, well we try to make it easy 451 00:24:33,600 --> 00:24:36,200 for all of you. So you've got Amazon is a great 452 00:24:36,200 --> 00:24:38,600 place to find it. You could also go to beating 453 00:24:38,600 --> 00:24:41,100 inflation.com. Pretty simple to remember. 454 00:24:41,300 --> 00:24:45,600 Or Simon Kuchar website, Simon Dasha future.com. 455 00:24:46,300 --> 00:24:51,300 That's an easy place to find us. And if you attend the PPS event, 456 00:24:51,300 --> 00:24:53,800 May, I'll be there. Personally will have a booth. 457 00:24:53,800 --> 00:24:56,600 I don't think you can go to the PPS and not bump into skp. 458 00:24:56,600 --> 00:25:00,500 So we're tied at the hip or I bet if you did a fast Google 459 00:25:00,500 --> 00:25:04,100 search on, you know, business pricing and pricing Simon 460 00:25:04,100 --> 00:25:06,200 cutural, come up pretty quick. So there's a lot of different 461 00:25:06,200 --> 00:25:08,300 Avenues. We try to make ourselves pretty 462 00:25:08,300 --> 00:25:11,100 easy to, to contact and get in touch with. 463 00:25:11,300 --> 00:25:12,600 Good. Good. 464 00:25:12,600 --> 00:25:14,800 Good. As Adam said, just as a quick 465 00:25:14,800 --> 00:25:18,600 reminder, he will be one of our keynote speakers, very excited 466 00:25:18,600 --> 00:25:22,300 for the upcoming 34th spring and pricing Workshop conference, we 467 00:25:22,308 --> 00:25:25,300 have in Dallas, Texas. Again, you can register for that 468 00:25:25,300 --> 00:25:27,600 conference and pricing Society.com. 469 00:25:28,000 --> 00:25:29,300 Adam. Thank you so much for your time. 470 00:25:29,700 --> 00:25:31,500 Until next time you guys have a good one. 471 00:25:31,800 --> 00:25:32,200 Bye, bye.