1 00:00:00,560 --> 00:00:01,560 All right. Well, hello and thank you all 2 00:00:01,560 --> 00:00:03,880 again for tuning into another episode of the Professional 3 00:00:03,880 --> 00:00:06,800 Pricing Society podcast. My name is Terrence and we have 4 00:00:06,800 --> 00:00:10,600 a great conversation today. We have a duo tag teaming today, 5 00:00:11,040 --> 00:00:15,440 G Mukherjee, VP and Head of Pricing for Holding Advisors and 6 00:00:15,440 --> 00:00:17,440 Kevin Mitchell, President of PPS. 7 00:00:17,440 --> 00:00:20,120 Today, they're going to be speaking with us about pricing 8 00:00:20,120 --> 00:00:22,720 power and we're very excited for this discussion. 9 00:00:22,720 --> 00:00:23,760 Gentlemen, how are we doing today? 10 00:00:24,520 --> 00:00:26,200 Doing great. How are you doing? 11 00:00:26,200 --> 00:00:27,480 Good. Doing good. 12 00:00:27,480 --> 00:00:29,880 Doing just fine, Terrence. Thank you so much. 13 00:00:29,880 --> 00:00:31,480 Gee, always good to talk with you. 14 00:00:31,480 --> 00:00:32,720 Great. So looking forward to a 15 00:00:32,720 --> 00:00:34,560 discussion here. Yeah, absolutely. 16 00:00:35,280 --> 00:00:35,880 Good. Good. 17 00:00:35,880 --> 00:00:39,280 Now, now, Gee, I just wanna start this conversation off by 18 00:00:39,280 --> 00:00:43,160 asking you about your recent interviews with some Cxo's this 19 00:00:43,160 --> 00:00:45,680 year, if you don't mind expounding on that. 20 00:00:46,080 --> 00:00:48,440 And then of course kind of you know going into the topic of 21 00:00:48,440 --> 00:00:51,240 pricing power. Yeah, yeah, yeah, it was. 22 00:00:51,440 --> 00:00:54,240 It's interesting. It's my second year doing these 23 00:00:54,240 --> 00:00:57,070 interviews. And typically we just talk about 24 00:00:57,110 --> 00:00:59,670 you know what these companies are going through, what are the 25 00:00:59,670 --> 00:01:02,310 challenges that they're facing. So last year obviously you can 26 00:01:02,310 --> 00:01:06,270 imagine inflation and the the turmoil in the industry was sort 27 00:01:06,270 --> 00:01:08,750 of a top of mind for all of these folks. 28 00:01:09,510 --> 00:01:12,230 This year is kind of mixed bag, a lot of confusion what's going 29 00:01:12,230 --> 00:01:14,430 to happen, interest rates, things like that, normal stuff, 30 00:01:14,470 --> 00:01:18,110 you know, little little bit of a continuation from last year, but 31 00:01:18,110 --> 00:01:20,190 one of the things I asked because I was curious. 32 00:01:21,100 --> 00:01:24,180 I asked him about pricing power. I said, you know, is pricing 33 00:01:24,180 --> 00:01:26,900 power important to you? It's one of the questions I had 34 00:01:27,300 --> 00:01:30,900 and it was one of the few times where that question was answered 35 00:01:30,900 --> 00:01:34,060 the same way by all participants, which is yes, it's 36 00:01:34,060 --> 00:01:35,780 important and it's something we want. 37 00:01:36,060 --> 00:01:38,500 And I said, oh, that's great. You know, usually you don't get 38 00:01:38,500 --> 00:01:41,460 like a full 100% saying yes on anything. 39 00:01:41,860 --> 00:01:44,990 And so I said Okay. Defined pricing power was sort 40 00:01:44,990 --> 00:01:49,070 of the second follow up question and I got 40 different answers 41 00:01:49,510 --> 00:01:52,630 for what that definition was. Some of it I understood because 42 00:01:52,630 --> 00:01:56,030 it's really industry specific and and specific to their 43 00:01:56,030 --> 00:01:58,190 company. So I get it and they jump right 44 00:01:58,190 --> 00:02:00,870 into why they don't have it, some of the issues they have 45 00:02:00,870 --> 00:02:03,350 within the organization. So that's understandable. 46 00:02:03,550 --> 00:02:05,030 But the definition just wasn't there. 47 00:02:05,030 --> 00:02:08,789 So that was the big trigger for me to kind of dive a little bit 48 00:02:08,870 --> 00:02:13,110 into it and see if we can find some common language. 49 00:02:13,830 --> 00:02:17,470 If we can find a way to measure it, to identify with it and then 50 00:02:17,470 --> 00:02:19,750 to talk about the two big questions, which is if you don't 51 00:02:19,750 --> 00:02:22,870 have it, how do you go get it? And if you do have it, how do 52 00:02:22,870 --> 00:02:26,830 you maintain it? So that's kind of the genesis 53 00:02:26,830 --> 00:02:29,790 for this conversation and some of the writing that we're doing. 54 00:02:30,830 --> 00:02:34,670 That's very interesting sheet and also as part of the 55 00:02:34,790 --> 00:02:37,030 Professional Pricing Society's surveys. 56 00:02:37,610 --> 00:02:41,930 For the past four or five years, we've asked people to rate their 57 00:02:41,930 --> 00:02:46,770 company's pricing power on a one to 10 scale and for our most 58 00:02:46,770 --> 00:02:52,170 recent survey, which started in December 2022, so about 8 months 59 00:02:52,170 --> 00:02:57,900 ago as we are recording this. We got an average score of 6.47 60 00:02:57,980 --> 00:03:00,740 on a scale of 1 to 10 when we asked people to rate their 61 00:03:00,740 --> 00:03:04,660 company's pricing power, which was down slightly from a year 62 00:03:04,660 --> 00:03:08,380 ago from December of 2021. Obviously there are a lot of 63 00:03:08,380 --> 00:03:11,380 external things that we're all facing now, but we did see a 64 00:03:11,380 --> 00:03:15,100 slight decrease in the PPS index talking about pricing power 65 00:03:15,100 --> 00:03:19,820 there and of course for a lot of this and probably why your CXO 66 00:03:19,820 --> 00:03:23,070 members. All answered positively and 67 00:03:23,070 --> 00:03:27,550 immediately when talking about pricing power is I know in our 68 00:03:27,550 --> 00:03:30,910 conferences and in our workshops, a lot of us have seen 69 00:03:30,910 --> 00:03:33,550 the quote from Warren Buffett that says, you know, he 70 00:03:33,550 --> 00:03:36,630 evaluates business based on their pricing power. 71 00:03:36,990 --> 00:03:40,190 And basically if you're in a business where you have the 72 00:03:40,190 --> 00:03:44,390 ability to alter prices to meet your company's goals, then 73 00:03:44,390 --> 00:03:47,950 that's a good thing in his eyes. And if you do not have that 74 00:03:47,950 --> 00:03:50,830 ability, then that is not a good thing in his eyes. 75 00:03:50,990 --> 00:03:53,230 And the consensus is he's a pretty smart investor. 76 00:03:53,230 --> 00:03:56,630 So there is a lot of attention around pricing power. 77 00:03:57,230 --> 00:03:59,870 And of course, with macro economically, everything that's 78 00:03:59,870 --> 00:04:03,510 going on, Gee, right now, it may be a little bit more nebulous 79 00:04:03,510 --> 00:04:07,390 than it's been in the past because in this hybrid inflation 80 00:04:07,390 --> 00:04:10,990 area where some input costs are going way up, like labor is 81 00:04:10,990 --> 00:04:13,970 still increasing. Some are flat, some are down, 82 00:04:13,970 --> 00:04:18,450 and some are a roller coaster. It really can depend on your 83 00:04:18,450 --> 00:04:21,209 short term goals, your medium term goals and your long term 84 00:04:21,209 --> 00:04:24,850 goals and your company strategies on what pricing power 85 00:04:24,850 --> 00:04:26,250 may be. So I think it's a very 86 00:04:26,250 --> 00:04:30,090 interesting topic. Yeah, you know the it's a great 87 00:04:30,090 --> 00:04:33,650 jumping off point is a warm buffet quote You did actually. 88 00:04:33,650 --> 00:04:35,210 I know you're doing it on the top of your head. 89 00:04:35,210 --> 00:04:37,890 You did a good job of, you know, saying that quote that there's 90 00:04:37,890 --> 00:04:40,290 an ending part that was missing, which is. 91 00:04:41,060 --> 00:04:44,380 He he looks at your ability to raise prices without losing 92 00:04:44,380 --> 00:04:48,420 customers and and that's that's a critical piece of that 93 00:04:48,420 --> 00:04:50,980 definition. And I kind of pulled up the same 94 00:04:50,980 --> 00:04:53,580 definition Kevin because it's like a Business School thing 95 00:04:53,580 --> 00:04:56,820 that everybody kind of goes through because it's a really 96 00:04:56,820 --> 00:05:00,700 interesting way of stating it. And given sort of my value based 97 00:05:01,300 --> 00:05:05,180 history and and my knowledge, I kept reading that definition and 98 00:05:05,180 --> 00:05:07,100 I just felt like it was incomplete. 99 00:05:07,740 --> 00:05:10,620 And the reason I think it's incomplete is because. 100 00:05:11,090 --> 00:05:13,890 It there is a theory that's behind it that says hey if 101 00:05:13,890 --> 00:05:16,130 you're above your differential value and you're still raising 102 00:05:16,130 --> 00:05:17,650 prices you're not going to lose customers. 103 00:05:18,210 --> 00:05:21,730 And which I think is wrong and and and because I think of let's 104 00:05:21,730 --> 00:05:23,730 say Apple. Apple is like you know one of 105 00:05:23,730 --> 00:05:26,370 these great companies that we know they have pricing power 106 00:05:26,370 --> 00:05:28,810 they go do whatever they want to do it seems like and they're 107 00:05:28,810 --> 00:05:32,090 never losing you know their their customers it seems like 108 00:05:32,370 --> 00:05:35,050 and people are still waiting in line to get certain features and 109 00:05:35,050 --> 00:05:37,170 the latest gadgets and all that sort of stuff. 110 00:05:38,130 --> 00:05:40,850 But if if Apple said hey, my iPhones are going to be 10. 111 00:05:40,930 --> 00:05:44,730 $1000 while Samsung and others are offering similar features at 112 00:05:44,730 --> 00:05:47,410 1000. I would probably guess that they 113 00:05:47,410 --> 00:05:49,810 will lose some market ship may not be all. 114 00:05:50,010 --> 00:05:51,690 They're still going to be segments that are going to be 115 00:05:51,690 --> 00:05:54,290 like Nope, Apple or die. I get that and they have the 116 00:05:54,570 --> 00:05:58,450 they have the buying power to pay the $10,000 but I have a 117 00:05:58,450 --> 00:06:00,410 feeling they're going to lose some customers on that. 118 00:06:00,410 --> 00:06:03,810 So I love the Buffett quote quote and I think the way he 119 00:06:03,810 --> 00:06:06,850 said it in the context in which he said it is accurate, but I 120 00:06:06,850 --> 00:06:10,090 think it's a little incomplete where I would add that notion of 121 00:06:10,370 --> 00:06:13,010 being able to. To create differential value and 122 00:06:13,010 --> 00:06:16,170 being able to capture more relative to your competitors 123 00:06:16,170 --> 00:06:20,210 based on that differential value and not lose customers, then I 124 00:06:20,210 --> 00:06:24,210 think the definition becomes a little bit more complete from 125 00:06:24,250 --> 00:06:27,140 our world. Absolutely. 126 00:06:27,140 --> 00:06:29,860 And Apple's a great example of that. 127 00:06:29,860 --> 00:06:33,380 You know, obviously is a consumer goods company that we 128 00:06:33,380 --> 00:06:35,580 all know and that many of us love. 129 00:06:35,620 --> 00:06:37,580 Perhaps not all of us, but many of us do. 130 00:06:38,100 --> 00:06:41,420 And I remember in Wall Street Journal, I believe a couple of 131 00:06:41,420 --> 00:06:44,460 years ago, came out with some interesting statistics about 132 00:06:44,460 --> 00:06:48,060 Apple. And I have asked people this in 133 00:06:48,060 --> 00:06:53,020 our workshops and elsewhere. And basically if you ask people 134 00:06:53,020 --> 00:06:58,580 how much of the global smartphone market does Apple 135 00:06:58,580 --> 00:07:00,940 have? And they'll say up 50% or 136 00:07:00,940 --> 00:07:03,500 something like that, when in reality it's somewhere in the 137 00:07:03,500 --> 00:07:06,220 upper teens, it might be 20% at most. 138 00:07:07,060 --> 00:07:11,100 But of course, the corollary to that is how much of the global 139 00:07:11,100 --> 00:07:14,860 profits do Apple does Apple take from the smartphone market? 140 00:07:15,140 --> 00:07:17,220 And there. Seventy 8090%. 141 00:07:17,580 --> 00:07:20,500 So it's an interesting case. And Gee, one thing I was 142 00:07:20,740 --> 00:07:24,340 wondering about with you is I know that I talked with a lot of 143 00:07:24,340 --> 00:07:27,020 our member companies that say we are not the largest in our 144 00:07:27,020 --> 00:07:30,420 market, we are not first or second in market share. 145 00:07:30,820 --> 00:07:34,740 How can we determine if we have pricing power, How can we get 146 00:07:34,740 --> 00:07:35,580 it? And the questions that you 147 00:07:35,580 --> 00:07:38,460 raised earlier, how can we use it effectively and efficiently 148 00:07:38,460 --> 00:07:41,500 as well? Yeah, I think the definition 149 00:07:41,500 --> 00:07:44,740 part and, and I'll be totally honest with you, we haven't 150 00:07:44,740 --> 00:07:46,750 done. That the measurement part of it, 151 00:07:47,310 --> 00:07:49,990 we haven't quite finished the entire process of how we're 152 00:07:49,990 --> 00:07:54,310 going to measure it, the pricing power piece, but we have created 153 00:07:54,310 --> 00:07:59,990 categories to understand it. And I'm the way I kind of think 154 00:07:59,990 --> 00:08:02,990 through it is I tested with different sort of B to C 155 00:08:02,990 --> 00:08:04,670 companies. So one of the things I did was 156 00:08:04,670 --> 00:08:07,910 say, let's look at automakers, right? 157 00:08:08,360 --> 00:08:10,200 And I said automakers is a great one to look at. 158 00:08:10,200 --> 00:08:12,200 There's data everywhere. So I can just kind of play 159 00:08:12,200 --> 00:08:15,000 around with it a little bit to see where people stand. 160 00:08:15,040 --> 00:08:18,800 And what I noticed was that first of all, the segmentation 161 00:08:18,800 --> 00:08:21,640 piece becomes really important, which is are you measuring 162 00:08:21,640 --> 00:08:23,440 yourself against the right competitors? 163 00:08:23,480 --> 00:08:26,440 Are you measuring yourself against the right vertical that 164 00:08:26,440 --> 00:08:28,720 you're focused on? Because when I put all car 165 00:08:28,720 --> 00:08:32,000 manufacturers together, I noticed that, you know, one of 166 00:08:32,000 --> 00:08:33,960 the things that we're looking at on one of the axes for 167 00:08:33,960 --> 00:08:37,270 measurement is obviously margin. You know if you have high margin 168 00:08:37,270 --> 00:08:40,870 relative to your competitors, you the assumption is you have 169 00:08:40,870 --> 00:08:43,830 some level of differential value whether that's in the product 170 00:08:43,830 --> 00:08:46,750 itself or the execution of the product, delivery of the 171 00:08:46,750 --> 00:08:48,910 product. There's some differentiation 172 00:08:48,910 --> 00:08:51,750 somewhere that you're capturing through that margin. 173 00:08:51,750 --> 00:08:55,510 So margin has to be a component of your of your pricing power 174 00:08:55,590 --> 00:08:58,590 obviously. So if I look at automakers, you 175 00:08:58,590 --> 00:09:01,670 know, you can't compare a Ferrari. 176 00:09:02,070 --> 00:09:04,190 With a Toyota as an example, right? 177 00:09:04,190 --> 00:09:07,470 Because then your scale isn't accurate because the vertical, 178 00:09:07,470 --> 00:09:09,630 even though it's auto manufacturers, is completely 179 00:09:09,630 --> 00:09:13,710 different and the segmentation piece becomes so important here. 180 00:09:14,030 --> 00:09:18,030 And what I keep coming back to is how you measure yourself with 181 00:09:18,030 --> 00:09:20,790 the competitors. A Ferrari would never use Toyota 182 00:09:20,790 --> 00:09:23,950 as a next best competing alternative to measure their 183 00:09:23,950 --> 00:09:26,250 differentiation. They're gonna use a Lamborghini. 184 00:09:26,250 --> 00:09:28,570 They're gonna use whatever. I don't know the names of all 185 00:09:28,570 --> 00:09:32,330 these fancy cars, but you know, whatever it might be, but that 186 00:09:32,370 --> 00:09:35,290 creates that segmentation to really know relative to that 187 00:09:35,290 --> 00:09:37,890 market where are you. But to answer your question 188 00:09:37,890 --> 00:09:40,970 directly, I think there are companies out there that can 189 00:09:40,970 --> 00:09:45,230 have niche segments and niche. Portions of the market that they 190 00:09:45,230 --> 00:09:49,270 go after with really high margins and they're able to take 191 00:09:49,270 --> 00:09:52,270 margins up based on the differential value that they're 192 00:09:52,270 --> 00:09:57,110 creating for that very specific segment relative to how 193 00:09:57,110 --> 00:09:58,630 competitors are behaving in there. 194 00:09:59,430 --> 00:10:01,790 So I think there is an opportunity to have smaller 195 00:10:01,790 --> 00:10:05,630 market share relatively to the larger industry and still have 196 00:10:05,630 --> 00:10:08,660 prices. Very interesting. 197 00:10:08,660 --> 00:10:12,940 And I like the concept where your company might have niches 198 00:10:12,940 --> 00:10:16,860 or special business units or product groups that might not be 199 00:10:16,860 --> 00:10:20,060 reflective of the overall company standings in some of 200 00:10:20,060 --> 00:10:23,780 those areas where you can wield pricing power, can be more of a 201 00:10:23,780 --> 00:10:28,580 leader and can also kind of set the place for that individual 202 00:10:28,580 --> 00:10:33,820 marketplace or for that niche. And as we know, pricing leaders 203 00:10:33,820 --> 00:10:38,460 can be beneficial, but they're also probably a lot of examples 204 00:10:38,460 --> 00:10:42,740 where they have been suboptimal, let's say, to put it politely, 205 00:10:43,020 --> 00:10:47,740 where certain people have had pricing power and have used that 206 00:10:47,820 --> 00:10:52,500 to have a big price war battle for market share or something 207 00:10:52,500 --> 00:10:55,500 like that and have led entire industries down for quite some 208 00:10:55,500 --> 00:10:57,660 time. So it's something where, just 209 00:10:57,660 --> 00:11:00,340 like with everything else, if you have power, you have to use 210 00:11:00,340 --> 00:11:03,140 it efficiently. Effectively and make sure that 211 00:11:03,140 --> 00:11:05,060 you're thinking about the right things you're keeping to your 212 00:11:05,060 --> 00:11:08,260 company business strategies and make sure that you are wielding 213 00:11:08,260 --> 00:11:10,500 that pricing power effectively as well. 214 00:11:10,900 --> 00:11:14,140 So that's very interesting. Yeah, and I won't mention names 215 00:11:14,140 --> 00:11:17,380 here cuz it gets a little tricky, but yeah. 216 00:11:17,460 --> 00:11:20,540 Let's not mention that, yeah. So imagine Apple. 217 00:11:20,540 --> 00:11:22,140 Apple's a great one. They're not gonna do this, but 218 00:11:22,140 --> 00:11:23,940 imagine if they stop differentiating. 219 00:11:24,480 --> 00:11:26,680 But they kept increasing their price, right? 220 00:11:27,000 --> 00:11:29,920 One of the things we do have see happening all the time is when 221 00:11:29,920 --> 00:11:33,360 people do get that pricing power and they realize they have that 222 00:11:34,080 --> 00:11:37,240 there are some industries, there are some players that decide to 223 00:11:37,240 --> 00:11:41,120 continue to raise price relative to their competitors because 224 00:11:41,120 --> 00:11:44,640 they have that differential value, but they don't invest in 225 00:11:44,640 --> 00:11:46,200 that differential value long term. 226 00:11:46,480 --> 00:11:49,600 So the nature of the market and nature of competitors is it's 227 00:11:49,600 --> 00:11:52,090 dynamic. So we can't think of ourselves 228 00:11:52,090 --> 00:11:54,890 as being a moment in time. We have to think of ourselves 229 00:11:54,890 --> 00:11:57,130 two years from now, four years from now, five years from now, 230 00:11:57,130 --> 00:12:00,530 whatever that horizon is based on your industry to really 231 00:12:00,530 --> 00:12:03,690 understand how we're going to create value over time. 232 00:12:04,210 --> 00:12:08,210 And what I'm seeing is there are some companies that aren't 233 00:12:08,210 --> 00:12:10,450 differentiating. They're trying to capture more 234 00:12:10,450 --> 00:12:13,930 and more profits today at the cost to the customers. 235 00:12:14,370 --> 00:12:17,290 And what happens is the customers price sensitivity goes 236 00:12:17,290 --> 00:12:20,000 up. And it goes up on a, it's almost 237 00:12:20,000 --> 00:12:22,400 like exponentially. It goes up when they feel like 238 00:12:22,680 --> 00:12:24,840 they can't trust the company anymore. 239 00:12:25,120 --> 00:12:28,880 That trust piece is broken and the customers then all of a 240 00:12:28,880 --> 00:12:32,720 sudden are willing to go to a less differentiated solution and 241 00:12:32,720 --> 00:12:35,920 grow them. And we're seeing that where it's 242 00:12:35,920 --> 00:12:39,200 almost like there's a new market life cycle that gets started 243 00:12:39,200 --> 00:12:42,920 with smaller companies more nimble, more technology forward 244 00:12:43,080 --> 00:12:47,080 where these these almost like these giant big companies that 245 00:12:47,080 --> 00:12:49,800 are just raising prices, customers are upset and they're 246 00:12:49,800 --> 00:12:53,360 jumping the curve, the S curve to the next curve and they are 247 00:12:53,360 --> 00:12:57,120 just creating the competitor's success and it's going really 248 00:12:57,120 --> 00:13:00,200 well and these larger companies go, Oh my God, what just 249 00:13:00,200 --> 00:13:03,760 happened and they just get blindsided because they truly to 250 00:13:03,760 --> 00:13:06,160 your. Point Kevin, they did not use 251 00:13:06,160 --> 00:13:10,320 their pricing power in the correct manner to continue on 252 00:13:10,320 --> 00:13:12,960 that journey. They kind of had a one and done 253 00:13:12,960 --> 00:13:15,280 type of scenario from raising prices. 254 00:13:16,110 --> 00:13:18,950 Yeah, definitely. And we know that our customers 255 00:13:18,990 --> 00:13:23,070 are very smart in almost all cases have good memories as 256 00:13:23,070 --> 00:13:26,230 well. And Gee, just how you mentioned 257 00:13:26,230 --> 00:13:31,350 that defining pricing power is difficult for executives, for 258 00:13:31,350 --> 00:13:35,630 leaders and so on and so forth. There also we all know that if 259 00:13:35,630 --> 00:13:39,150 your prices are not fair, then in the long term it will 260 00:13:39,150 --> 00:13:42,990 definitely come back to bite you and defining fair can be a 261 00:13:42,990 --> 00:13:48,780 little bit tricky as well. We all have the goal of having 262 00:13:48,780 --> 00:13:53,020 fair prices, having prices that allow us to grow profitably, 263 00:13:53,300 --> 00:13:56,260 which is great for our marketplace because that lets us 264 00:13:56,260 --> 00:14:00,300 reinvest in R&D and our people and our communities and our 265 00:14:00,300 --> 00:14:01,980 product groups and so on and so forth. 266 00:14:02,380 --> 00:14:05,220 And that's how you can make that kind of win, win with your 267 00:14:05,220 --> 00:14:08,780 customer bases by having prices that are fair, particularly when 268 00:14:08,780 --> 00:14:12,980 you can wield pricing power and thinking about mediumterm and 269 00:14:12,980 --> 00:14:15,300 longterm and not just shortterm. Let's get everything. 270 00:14:15,380 --> 00:14:18,340 That we can. And it's also interesting, I've 271 00:14:18,340 --> 00:14:23,460 heard from a lot of our members who recently kind of near post 272 00:14:23,460 --> 00:14:27,220 pandemic, we hope, knock on wood, that a lot of the 273 00:14:27,220 --> 00:14:31,300 discussions now are about reining people in and saying 274 00:14:31,580 --> 00:14:36,100 yes, with our supply chain having issues or with input 275 00:14:36,100 --> 00:14:39,740 costs going up, with inflation going up, we really, really. 276 00:14:40,440 --> 00:14:44,360 Might be in a position where we could really raise prices a lot, 277 00:14:44,360 --> 00:14:47,120 but that might not be the best thing for our company in the 278 00:14:47,120 --> 00:14:50,360 medium term and the long term because you want that fairness, 279 00:14:50,360 --> 00:14:53,680 you want to be a partner to your customers and you want to have 280 00:14:53,680 --> 00:14:56,680 an ongoing type of of a relationship with them where 281 00:14:56,680 --> 00:15:00,160 it's not as you said, just one and done and moving on that way. 282 00:15:00,160 --> 00:15:03,280 So really, yeah, it's about a good long term. 283 00:15:03,780 --> 00:15:07,780 Profitable growth strategy and making sure that you have the 284 00:15:07,780 --> 00:15:10,940 ability to reinvest in that engine to keep things going for 285 00:15:11,060 --> 00:15:13,420 you, for your marketplace, for your customers, for your 286 00:15:13,420 --> 00:15:16,380 employees, for your communities and so on and so forth there. 287 00:15:16,380 --> 00:15:17,780 So I think that's a very key point. 288 00:15:19,200 --> 00:15:23,240 Yeah, It's what we're finding and seeing is obviously the more 289 00:15:23,240 --> 00:15:26,280 power you have, the higher the threshold for what's a fair 290 00:15:26,280 --> 00:15:29,240 price, right, because you're able to push it more than your 291 00:15:29,240 --> 00:15:31,160 competitors because you've got something extra. 292 00:15:31,440 --> 00:15:35,920 And what I'm also seeing is these companies have this notion 293 00:15:35,920 --> 00:15:38,960 that, you know, they don't look at differential value as a 294 00:15:38,960 --> 00:15:41,880 constant for today. These customers that are buying, 295 00:15:41,880 --> 00:15:44,600 they're looking at your ability to create differentiation in the 296 00:15:44,600 --> 00:15:47,400 future. And that gets baked into the 297 00:15:47,400 --> 00:15:49,360 idea of how much they're willing to pay. 298 00:15:49,800 --> 00:15:53,080 So if when you look at Apple and apologize for using the same 299 00:15:53,080 --> 00:15:55,680 person over the same example over and over again, but it just 300 00:15:55,680 --> 00:15:58,400 makes perfect sense, which is because everybody can relate to 301 00:15:58,400 --> 00:16:01,240 it, We know that Apple's going to come up, and even Samsung, 302 00:16:01,320 --> 00:16:02,760 you know, just to change up the company. 303 00:16:02,760 --> 00:16:04,840 We know that Samsung's going to come up with a great product 304 00:16:04,840 --> 00:16:08,270 next year, the year after that. So my ability to pay a little 305 00:16:08,270 --> 00:16:11,350 bit extra is not just for what I'm getting today, but it's also 306 00:16:11,350 --> 00:16:14,830 investing in the fact that I'm gonna be getting on a continuum 307 00:16:14,830 --> 00:16:18,190 more differentiation over time and I trust this company to 308 00:16:18,190 --> 00:16:21,350 create that differentiation. So my. 309 00:16:22,200 --> 00:16:25,920 My willingness to pay for what's fair goes up just a little bit 310 00:16:26,080 --> 00:16:28,600 because I'm thinking about differentiation on a continuum 311 00:16:28,800 --> 00:16:32,080 rather than thinking about differentiation just now for 312 00:16:32,080 --> 00:16:35,240 this moment in time. So that piece becomes really 313 00:16:35,280 --> 00:16:37,760 important to bake into our calculations as well. 314 00:16:39,140 --> 00:16:41,460 Definitely. And it's also interesting that 315 00:16:41,460 --> 00:16:43,900 there's so many variables and so many inputs. 316 00:16:44,300 --> 00:16:48,020 Obviously, there's a good bit of behavioral economics and 317 00:16:48,020 --> 00:16:51,020 psychology. And this is, well, not only on B 318 00:16:51,020 --> 00:16:53,540 to C for consumers, but for businesses as well, because 319 00:16:53,540 --> 00:16:57,180 sometimes we all act as consumers, as consumers and 320 00:16:57,180 --> 00:16:59,780 sometimes consumers act as businesses now with our wealth 321 00:16:59,780 --> 00:17:02,380 of information. So there's a bit of a blurring 322 00:17:02,380 --> 00:17:05,020 there. I'm, I'm feeling and I'm seeing. 323 00:17:05,829 --> 00:17:10,390 From the marketplace as a whole. But really, it is important 324 00:17:10,470 --> 00:17:13,109 again to just remember your strategies. 325 00:17:13,109 --> 00:17:17,349 Remember that it is not getting everything that we can today if 326 00:17:17,349 --> 00:17:19,750 that's going to hurt what we can get tomorrow and next week. 327 00:17:20,150 --> 00:17:23,670 As well. And it's just a situation where 328 00:17:23,990 --> 00:17:27,310 if you have the power, then definitely you have to wield 329 00:17:27,310 --> 00:17:28,830 that correctly. You have to think about the 330 00:17:28,830 --> 00:17:31,470 marketplace as a whole thing from your customer's standpoint. 331 00:17:31,870 --> 00:17:35,630 Think about competitive actions and reactions, and use your game 332 00:17:35,630 --> 00:17:37,590 theory. Use your behavioral economics, 333 00:17:37,870 --> 00:17:41,030 use your analytical skills, your qualitative skills, and kind of 334 00:17:41,070 --> 00:17:44,400 all of the above. And it's a case where you have 335 00:17:44,400 --> 00:17:46,640 data, but things have changed so much. 336 00:17:46,640 --> 00:17:51,320 You have to take data, analyze it, use a grain of salt and 337 00:17:51,320 --> 00:17:54,240 really think about what's next. So it's part data and part 338 00:17:54,240 --> 00:17:56,560 crystal ball about what's going to happen next and what your 339 00:17:56,560 --> 00:17:57,800 competitors are going to do as well. 340 00:17:58,200 --> 00:18:01,520 It's a very interesting topic. Yeah, the the next step is 341 00:18:01,520 --> 00:18:03,800 probably the one Kevin that we are spending a little bit of 342 00:18:03,800 --> 00:18:06,840 time on is, is the notion because as we do value based 343 00:18:06,840 --> 00:18:09,240 pricing, we're very sort of in tune to. 344 00:18:10,470 --> 00:18:13,070 Features, functionality, services that create that 345 00:18:13,070 --> 00:18:15,190 differentiation relative to competitors. 346 00:18:15,550 --> 00:18:18,670 What we don't look at sometimes is what's going to affect 347 00:18:18,670 --> 00:18:21,550 purchase decisions long term that may not be quantifiable 348 00:18:21,550 --> 00:18:23,810 today. Then how do you bake that into 349 00:18:23,810 --> 00:18:26,370 your price? And that's the piece if you look 350 00:18:26,370 --> 00:18:28,890 at ESG, which is the perfect example of it, you look at 351 00:18:28,890 --> 00:18:31,930 sustainability where there's something, some markets 352 00:18:31,930 --> 00:18:33,970 quantifiable, right, carbon credits, things like that. 353 00:18:33,970 --> 00:18:35,850 It's quantifiable. You quantify it, you put into 354 00:18:35,850 --> 00:18:37,170 your pricing and you move on, moving on. 355 00:18:37,570 --> 00:18:40,770 But then in some industries, you can't quantify sustainability, 356 00:18:40,810 --> 00:18:43,330 you can't quantify the differentiation it creates or 357 00:18:43,330 --> 00:18:45,090 anything. But you know it's going to 358 00:18:45,090 --> 00:18:48,050 affect purchase decision decisions, behavior at some 359 00:18:48,050 --> 00:18:50,530 point. Maybe it's 2% now next year, 360 00:18:50,530 --> 00:18:52,370 maybe by 5%, maybe it'll go down. 361 00:18:52,570 --> 00:18:55,730 Will go up, but you know it's going to be there and people are 362 00:18:55,930 --> 00:18:59,010 investing in that because they think there's going to be an 363 00:18:59,010 --> 00:19:02,050 effect and purchase decision at some point in the future. 364 00:19:02,330 --> 00:19:05,010 And they're kind of positioning themselves to be able to capture 365 00:19:05,010 --> 00:19:08,530 the market when it does become a bigger portion of that decision 366 00:19:08,530 --> 00:19:11,810 making because that's when it converts from long term value 367 00:19:11,810 --> 00:19:14,490 driver to an actual value driver that you need to quantify for 368 00:19:14,490 --> 00:19:17,630 your price. And understanding that now 369 00:19:17,630 --> 00:19:20,270 instead of understanding it when they're actually making a 370 00:19:20,270 --> 00:19:23,790 decision off of it obviously is a very important piece. 371 00:19:24,390 --> 00:19:28,110 So long term value drivers that's unquantifiable right now 372 00:19:28,390 --> 00:19:30,990 I think is going to be an important piece of this topic 373 00:19:31,190 --> 00:19:33,870 and how we bake that into our pricing is going to be really, 374 00:19:33,870 --> 00:19:37,230 really important. Yeah, that's a very good point. 375 00:19:37,310 --> 00:19:41,310 And hey, what interesting times that we're in where we have 376 00:19:41,310 --> 00:19:43,350 things that are changing like this and new things that are 377 00:19:43,350 --> 00:19:47,370 coming about. And I was lucky enough to be a 378 00:19:47,370 --> 00:19:52,570 part of the pricing for the Planet Symposium that was in 379 00:19:52,570 --> 00:19:55,970 Paris a few months ago and would encourage everyone to check out 380 00:19:55,970 --> 00:19:58,450 pricing for the planet for some insights about that. 381 00:19:58,450 --> 00:20:01,930 But we talked about ESG, about sustainability, about what it 382 00:20:01,930 --> 00:20:05,420 means to our marketplaces. Are they separate products? 383 00:20:05,500 --> 00:20:09,780 Are they cases where we let people self select and decide, 384 00:20:09,780 --> 00:20:12,700 hey, if this product is more sustainable? 385 00:20:12,860 --> 00:20:15,300 Is it a different product? Is it an addon, is it a 386 00:20:15,300 --> 00:20:19,060 replacement? And it is a case now where we 387 00:20:19,060 --> 00:20:22,380 have a lot of variables that are going into the thinking about 388 00:20:22,380 --> 00:20:25,660 that and thinking about other things that are new frontiers as 389 00:20:25,660 --> 00:20:28,380 well. And so really it's very 390 00:20:28,380 --> 00:20:33,320 interesting that it is difficult to be so forward-looking for 391 00:20:33,320 --> 00:20:35,520 something that is rather new right now, but it's also 392 00:20:35,520 --> 00:20:38,760 necessary to do that and to make plans for it. 393 00:20:38,840 --> 00:20:41,840 And hey, that's why pricing people, that's why we get all of 394 00:20:41,840 --> 00:20:44,600 the accolades and all of the big bucks because of the decisions 395 00:20:44,600 --> 00:20:48,160 that we make and because of the inputs that we have and the 396 00:20:48,160 --> 00:20:52,320 effectiveness that we can wield for our organizations in 397 00:20:52,320 --> 00:20:55,360 discussing things like that. So, yeah, another great topic, 398 00:20:55,360 --> 00:20:59,320 something else that's brand new, something that will become part 399 00:20:59,320 --> 00:21:03,000 of some organization pricing power, some organizations 400 00:21:03,000 --> 00:21:07,400 differentiation and other topics there to come as well. 401 00:21:07,400 --> 00:21:09,880 So, yeah, very good point there. That's great. 402 00:21:10,720 --> 00:21:14,560 I think so too. One thing that we haven't talked 403 00:21:14,560 --> 00:21:19,760 about is the ability to go get pricing power and that's the 404 00:21:19,760 --> 00:21:24,040 piece that is very industry specific as you know Kevin and. 405 00:21:24,700 --> 00:21:26,940 And it's interesting to me how some of these companies are 406 00:21:26,940 --> 00:21:30,220 behaving and acting because this is where sort of branding 407 00:21:30,220 --> 00:21:33,820 becomes, it's becoming a topic. So a lot of the Cxos that we 408 00:21:33,820 --> 00:21:37,300 chatted with, they felt like branding and execution power and 409 00:21:37,300 --> 00:21:40,740 how you execute in the marketplace are two things that 410 00:21:40,740 --> 00:21:45,350 creates that. Pricing power long term that 411 00:21:45,390 --> 00:21:48,670 just your pricing by itself is not helping you create or the 412 00:21:48,670 --> 00:21:50,790 differentiation is not just helping you create. 413 00:21:51,150 --> 00:21:55,030 So that's the last area I'll talk about which is you know the 414 00:21:55,110 --> 00:21:57,950 ability for a company to actually go out and execute all 415 00:21:57,950 --> 00:22:00,710 the things they do through the sales organization, marketing, 416 00:22:00,910 --> 00:22:03,670 product development, everything put together from an execution 417 00:22:03,670 --> 00:22:07,030 perspective becomes important for us to measure and track. 418 00:22:07,420 --> 00:22:10,180 So that has to go into the measurement of pricing power and 419 00:22:10,180 --> 00:22:14,180 how it affects the different industries that are out of it 420 00:22:14,180 --> 00:22:17,020 definitely. And one question that you 421 00:22:17,020 --> 00:22:19,660 mentioned there and that we've touched on a little bit is you 422 00:22:19,660 --> 00:22:23,380 know how can you determine if you have it and how can you get 423 00:22:23,380 --> 00:22:26,180 it? Have you talked with Cxl's or 424 00:22:26,180 --> 00:22:30,700 other leaders who have basically tried trials with particular 425 00:22:30,940 --> 00:22:35,300 product units or geographies in order to test what would happen 426 00:22:35,740 --> 00:22:39,740 when they try to wield power? There, there have been and 427 00:22:39,740 --> 00:22:43,140 there's mixed results from it because I have a feeling in 428 00:22:43,140 --> 00:22:46,900 talking to some of these folks, they weren't looking at pricing 429 00:22:46,900 --> 00:22:50,220 power as a comprehensive sort of go to market strategy almost 430 00:22:50,220 --> 00:22:52,040 because we use. You know, it's almost like a 431 00:22:52,040 --> 00:22:54,280 disservice to call it pricing power. 432 00:22:54,280 --> 00:22:57,400 You're actually looking at the company holistically because 433 00:22:57,400 --> 00:22:59,480 then you know, like I was saying, if you talk about sales 434 00:22:59,480 --> 00:23:01,360 organization, you talk about marketing and product 435 00:23:01,360 --> 00:23:04,560 development, you're branding overall, all of those things are 436 00:23:04,560 --> 00:23:09,160 incorporated into pricing power. So if you are too monolithic in 437 00:23:09,160 --> 00:23:11,600 how you're looking at your pricing and you're doing a test 438 00:23:11,600 --> 00:23:14,200 in a region, it's just price based and competitive price 439 00:23:14,200 --> 00:23:16,600 based. You're missing all the other 440 00:23:16,600 --> 00:23:19,120 elements, which is did you look at your customer service? 441 00:23:19,360 --> 00:23:21,720 Did you look at how you're presenting yourself in the 442 00:23:21,720 --> 00:23:23,400 market? Did you look at all of those 443 00:23:23,400 --> 00:23:25,760 other things? Because those also kind of add 444 00:23:25,760 --> 00:23:27,840 to it. And some of these companies talk 445 00:23:27,840 --> 00:23:30,960 to me about how, hey, it wasn't working that great because you 446 00:23:30,960 --> 00:23:34,400 know we could not execute on the some of the things we promised 447 00:23:34,400 --> 00:23:37,120 we were going to execute on. So they missed on some of those 448 00:23:37,120 --> 00:23:38,400 things. So it became sort of a. 449 00:23:39,580 --> 00:23:43,180 A lot of false positives that were out there and also a lot of 450 00:23:43,180 --> 00:23:46,140 things that were out there that they they felt it was incomplete 451 00:23:46,260 --> 00:23:48,700 or inconclusive out of those tests. 452 00:23:49,900 --> 00:23:51,580 Interesting. So you have to think of it from 453 00:23:51,580 --> 00:23:55,620 your customer's perspective as a total cost of ownership from a 454 00:23:55,620 --> 00:23:59,060 holistic perspective where it's just not one lever that you're 455 00:23:59,060 --> 00:24:02,220 changing, it's one as part of a huge machine. 456 00:24:02,220 --> 00:24:04,340 It's just one cog in that machine and you have to make 457 00:24:04,340 --> 00:24:07,380 sure that everything is working as it should there as well. 458 00:24:07,380 --> 00:24:08,660 So yeah, that's very interesting. 459 00:24:09,130 --> 00:24:11,410 That's right. Gentlemen want to jump in here 460 00:24:11,410 --> 00:24:16,570 and more so Serve Allow this podcast to serve as a teaser for 461 00:24:16,570 --> 00:24:19,250 Jeets upcoming Keno presentation in Atlanta. 462 00:24:19,530 --> 00:24:22,370 He is going to be speaking with us about how companies can build 463 00:24:22,370 --> 00:24:25,240 and sustain pricing power. So I want to thank you all for 464 00:24:25,240 --> 00:24:28,640 this discussion today. I hate to be the the bad guy to 465 00:24:28,640 --> 00:24:31,680 pop the bubble, but I do want to let this to be the allow us to 466 00:24:31,680 --> 00:24:34,320 be the teaser for this discussion we could go on and on 467 00:24:34,360 --> 00:24:35,680 about. About this topic. 468 00:24:36,720 --> 00:24:39,320 Especially with these two, with these two fine gentlemen. 469 00:24:39,320 --> 00:24:41,520 So I want to thank you all so much for being in this 470 00:24:41,520 --> 00:24:44,000 conversation today. Gee, where can listeners go to 471 00:24:44,000 --> 00:24:47,840 learn more about you or pricing power or or holding advisors? 472 00:24:48,120 --> 00:24:51,080 I think holding advisors.com is the perfect place to get 473 00:24:51,080 --> 00:24:53,360 started. OK, sounds good. 474 00:24:53,680 --> 00:24:57,200 And then Kevin, everybody knows you are already Mr. Popular, so 475 00:24:57,480 --> 00:24:59,960 you can probably just go to linkedin.com type in Kevin 476 00:24:59,960 --> 00:25:04,800 Mitchell Pricing Society or you can go to pricesociety.com to 477 00:25:04,800 --> 00:25:06,520 learn more about you and the upcoming conference. 478 00:25:06,760 --> 00:25:09,360 Also if you are interested in the conference, you can go to 479 00:25:09,360 --> 00:25:12,480 priceandsociety.com to register or just to learn more 480 00:25:12,480 --> 00:25:15,720 information in general. Kevin, do you have any departing 481 00:25:15,960 --> 00:25:18,560 thoughts or or or you know, anything you want to leave the 482 00:25:18,560 --> 00:25:20,340 listeners today? Yeah. 483 00:25:20,340 --> 00:25:22,500 Mr. Egglesson, thanks for keeping us on time. 484 00:25:22,500 --> 00:25:25,420 Appreciate that. Obviously, Jeep Mukherjee and I 485 00:25:25,420 --> 00:25:27,540 could talk for a long, long time on this issue. 486 00:25:27,540 --> 00:25:31,620 So thanks for keeping us on time and keeping us on task there, 487 00:25:31,820 --> 00:25:35,980 Jeep, Sincerest congratulations to you and your team on the 2nd 488 00:25:36,100 --> 00:25:39,900 edition of your book. And I am really looking forward 489 00:25:39,900 --> 00:25:45,140 to you joining us in Atlanta in October for the PBS 34th Annual 490 00:25:45,950 --> 00:25:48,990 Fall Conference. And also your town Hall will 491 00:25:48,990 --> 00:25:53,070 have a lot of great opportunities to sit down and to 492 00:25:53,070 --> 00:25:56,310 discuss pricing, power negotiation strategies, sales 493 00:25:56,310 --> 00:25:59,590 pricing and a lot more. But always good to talk with 494 00:25:59,590 --> 00:26:01,510 you. So thank you very much, Jeep. 495 00:26:01,510 --> 00:26:03,790 Thank you, Terrence and enjoy the discussion today. 496 00:26:04,110 --> 00:26:05,590 Thank you very much. Really appreciate it. 497 00:26:05,750 --> 00:26:07,070 Looking forward to October.