1 00:00:00,600 --> 00:00:02,480 Well, all right. Hello and thank you all for 2 00:00:02,480 --> 00:00:04,840 tuning into yet another episode of the Professional Pricing 3 00:00:04,840 --> 00:00:07,360 Society podcast. Once again, my name is Terrance, 4 00:00:07,360 --> 00:00:10,480 and we have a great friend of PPS joining us today. 5 00:00:10,920 --> 00:00:13,760 His name is Barrett Thompson. Barrett actually leads the 6 00:00:13,760 --> 00:00:17,600 business Solutions consultant team at Zillion and has built 7 00:00:17,600 --> 00:00:21,400 and delivered optimization and pricing solutions for Fortune 8 00:00:21,400 --> 00:00:23,880 500 businesses in diverse vertical industries. 9 00:00:24,240 --> 00:00:27,880 He also was a speaker and an author of a number of books. 10 00:00:27,880 --> 00:00:30,670 Barrett, how are we doing today? Terrance, I'm doing great. 11 00:00:30,670 --> 00:00:32,830 Thank you for having me on the podcast again. 12 00:00:33,270 --> 00:00:34,310 Good, good. Absolutely. 13 00:00:34,750 --> 00:00:37,310 It's a pleasure to have you as as always. 14 00:00:37,310 --> 00:00:41,310 Now, your upcoming talk at PPS is about a topic that most price 15 00:00:41,310 --> 00:00:45,390 professionals and BDB companies wish they never had to address 16 00:00:45,630 --> 00:00:48,190 and that is the topic of price decreases. 17 00:00:48,990 --> 00:00:51,230 Why did you choose to discuss this topic with me today? 18 00:00:52,110 --> 00:00:54,910 Well, you're right, Terrance, that you know most of the time 19 00:00:54,910 --> 00:00:57,230 if the world can be up and to the right. 20 00:00:57,700 --> 00:01:00,740 Over time that's where we want to be and in fact I think for 21 00:01:00,740 --> 00:01:05,379 most pricing folks that's been the case probably in in a lot of 22 00:01:05,379 --> 00:01:08,580 their professional career. But you know a season of price 23 00:01:08,580 --> 00:01:11,980 decreases is a very real possibility out there if you 24 00:01:11,980 --> 00:01:15,460 listen to some of the economic forecasts and and the last thing 25 00:01:15,460 --> 00:01:18,380 you want is to get caught flatfooted if that hits your 26 00:01:18,380 --> 00:01:20,940 business. So I thought that it might be 27 00:01:20,940 --> 00:01:24,860 timely, especially if the people listening and in the roles today 28 00:01:24,860 --> 00:01:29,250 have not been through. Sustained and broad and 29 00:01:29,250 --> 00:01:32,610 industrywide or even planetwide economic downturn, they might 30 00:01:32,810 --> 00:01:35,610 have no personal experience from which to draw. 31 00:01:35,610 --> 00:01:40,130 I think it was the, you know, the last big global recession 32 00:01:40,130 --> 00:01:43,810 was around 2008, 2009 sort of kicked off then it took a few 33 00:01:43,810 --> 00:01:47,290 years, so that's 15 years ago. We've got a lot of a lot of 34 00:01:47,290 --> 00:01:50,090 great professionals in the business that have come in since 35 00:01:50,090 --> 00:01:52,990 that time. And so they've probably been 36 00:01:52,990 --> 00:01:56,630 focused on year over year price increases keeping up with 37 00:01:56,630 --> 00:02:00,190 inflation and that may really be the thing that they're strong 38 00:02:00,190 --> 00:02:02,310 at. So you know, I'm a, I'm a Boy 39 00:02:02,310 --> 00:02:05,070 Scout and work with the scouts still Terrence and you know our 40 00:02:05,070 --> 00:02:09,350 motto is, is as be prepared and when you say be prepared for 41 00:02:09,350 --> 00:02:12,510 what you know for anything really for whatever happens in 42 00:02:12,510 --> 00:02:14,910 business. So that is my motivation to 43 00:02:14,910 --> 00:02:19,870 bring this topic around systemic intelligent price decreases. 44 00:02:20,620 --> 00:02:23,860 That's good, that's good. It is a very timely matter. 45 00:02:25,020 --> 00:02:27,580 Price decreases always can be a timely discussion. 46 00:02:28,420 --> 00:02:30,980 So I'm glad that you are addressing this with us today. 47 00:02:31,260 --> 00:02:34,340 Now let's talk about this. What's the difference, What's 48 00:02:34,340 --> 00:02:36,900 really the difference between price decreases and increases? 49 00:02:37,300 --> 00:02:40,100 Isn't that kind of the two sides of the same coin? 50 00:02:41,140 --> 00:02:43,820 Yeah. It's a great question and at 51 00:02:43,820 --> 00:02:47,890 some level. Increases and decreases have a 52 00:02:47,890 --> 00:02:51,130 lot of similarity. I say it in the sense that the 53 00:02:51,130 --> 00:02:55,690 core skills that a pricing professional uses to manage 54 00:02:55,690 --> 00:02:59,330 those increases are going to be extremely valuable when they get 55 00:02:59,330 --> 00:03:01,290 into a season of pervasive decrease. 56 00:03:02,130 --> 00:03:06,570 An example of this I I see many businesses talking about and 57 00:03:06,570 --> 00:03:09,290 taking steps toward price automation. 58 00:03:09,850 --> 00:03:13,850 As one idea using technology for example or making data-driven 59 00:03:13,850 --> 00:03:18,290 approaches, getting out of sort of a gut driven instinct level 60 00:03:18,290 --> 00:03:22,290 price setting or getting away from peanut butter spread price 61 00:03:22,290 --> 00:03:26,770 changes and doing segmented and smart and and surgical price 62 00:03:26,770 --> 00:03:30,170 changes. So those same ideas and concepts 63 00:03:30,170 --> 00:03:34,090 are going to apply in the decrease world, the price 64 00:03:34,090 --> 00:03:38,570 decrease world, but the details how do you apply those can? 65 00:03:38,900 --> 00:03:42,060 Very dramatically in some cases when prices are dropping. 66 00:03:42,060 --> 00:03:43,700 So that's where it gets really interesting. 67 00:03:44,780 --> 00:03:47,300 That is interesting. Okay, that's very interesting. 68 00:03:47,620 --> 00:03:50,900 Now, is there any examples that you may have of a familiar 69 00:03:50,900 --> 00:03:54,300 concept that takes on a different form when it is 70 00:03:54,300 --> 00:03:58,140 applied to price decreases versus price increases? 71 00:03:59,980 --> 00:04:03,660 Yes, yeah. I'll tell you one that I think, 72 00:04:03,660 --> 00:04:06,020 I think most people are familiar with. 73 00:04:06,970 --> 00:04:09,610 And you know every price professional that I speak with, 74 00:04:09,610 --> 00:04:14,090 they, they have a way to measure their year on year price change. 75 00:04:14,730 --> 00:04:18,690 And often they they do that to show the improvement if you 76 00:04:18,690 --> 00:04:21,649 will, that the pricing team and the pricing program is bringing 77 00:04:21,649 --> 00:04:25,450 to the business. Now the general form of that is 78 00:04:25,450 --> 00:04:29,410 to show the change in the key metric, like average selling 79 00:04:29,410 --> 00:04:33,530 price or gross margins. But here's the expectation in a 80 00:04:33,850 --> 00:04:37,250 typical inflationary period. Probably everybody at the 81 00:04:37,250 --> 00:04:40,410 company has some rule of thumb that says, well, during 82 00:04:40,410 --> 00:04:43,330 inflationary times, you know, if you took the gross margins up by 83 00:04:43,330 --> 00:04:45,850 50 basis points, maybe that's good. 84 00:04:45,890 --> 00:04:48,010 If you took it up by 100, it's great. 85 00:04:48,610 --> 00:04:51,050 If you did it by 200, you know it's outstanding, right? 86 00:04:51,050 --> 00:04:53,730 You're a hero and you get the you get the parade, the confetti 87 00:04:53,730 --> 00:04:57,970 parade, but and coupled with that. 88 00:04:58,390 --> 00:05:01,910 In that same inflationary period where we expect the number to go 89 00:05:01,910 --> 00:05:05,070 up, if you had to report that your overall number was 90 00:05:05,070 --> 00:05:09,510 negative, maybe -40 BPS on that gross margin year on year, that 91 00:05:09,510 --> 00:05:11,950 would be a shocker. It would be clearly a sign of 92 00:05:11,950 --> 00:05:14,790 failure, right? Positive numbers good, negative 93 00:05:14,790 --> 00:05:18,110 numbers bad. So if that's how you're thinking 94 00:05:18,110 --> 00:05:22,150 about measuring your price performance, what's going to 95 00:05:22,150 --> 00:05:25,790 happen when you flip into that recessionary world and the 96 00:05:25,790 --> 00:05:28,680 assumption? Is already set that prices are 97 00:05:28,680 --> 00:05:32,440 going to decrease. So right away like you're not 98 00:05:32,440 --> 00:05:34,120 going to be reporting a positive number. 99 00:05:34,160 --> 00:05:37,560 So that may be obvious, but it's sort of very different. 100 00:05:37,560 --> 00:05:39,200 So you like when I wait a minute, I'm going to be 101 00:05:39,200 --> 00:05:42,920 reporting a negative year on year change in margin due to 102 00:05:43,040 --> 00:05:46,200 pressure. And so if you report that same 103 00:05:46,200 --> 00:05:51,960 -40 bits, that would have been bad under the inflationary 104 00:05:51,960 --> 00:05:54,800 world, but now we're in the deflationary world, you report 105 00:05:54,800 --> 00:05:57,210 -40. OK, here's the quiz. 106 00:05:57,770 --> 00:06:01,290 Are you a hero or a zero at that moment? 107 00:06:01,330 --> 00:06:05,090 Right. And honestly, I think nobody 108 00:06:05,090 --> 00:06:07,690 knows or they might not know inside that business. 109 00:06:07,690 --> 00:06:12,810 They might have no instinct about what good looks like in 110 00:06:12,810 --> 00:06:15,930 that kind of economic condition where prices are going down. 111 00:06:17,010 --> 00:06:19,970 So, you know, let me offer how I've seen some people address 112 00:06:19,970 --> 00:06:24,570 that, for example, if they might have had an industry report. 113 00:06:25,120 --> 00:06:29,240 Showing that in their industry, their competitors experienced an 114 00:06:29,240 --> 00:06:33,920 average margin loss of 100 bips in the downturn. 115 00:06:34,160 --> 00:06:39,480 So hey, in that case, you've done far better than your peers. 116 00:06:39,920 --> 00:06:42,560 So even though you're negative, you're good, right? 117 00:06:42,960 --> 00:06:45,240 I would think so. I mean, that's perfectly legit. 118 00:06:46,320 --> 00:06:50,360 Or it might be the case that your financial planning team at 119 00:06:50,360 --> 00:06:53,360 the beginning of the year, they had a forecast of this margin 120 00:06:53,360 --> 00:06:55,780 pressure. And they might have for actually 121 00:06:55,780 --> 00:07:00,540 built in a loss in margin rate into the financial plan just 122 00:07:00,540 --> 00:07:05,660 being realistic. So what if they planned however 123 00:07:06,140 --> 00:07:10,460 to take only a 20 basis point loss on margin that's what they 124 00:07:10,460 --> 00:07:15,900 built into the finance plan and you delivered twice that. 125 00:07:15,900 --> 00:07:19,260 I mean you you you lost twice as much as they expected. 126 00:07:19,260 --> 00:07:22,380 So they might say, well, hang on a minute, you missed the plan, 127 00:07:23,140 --> 00:07:25,980 right? So these ideas and these 128 00:07:25,980 --> 00:07:30,140 examples show that you're going to need to think carefully about 129 00:07:30,140 --> 00:07:33,820 how you plan with other stakeholders. 130 00:07:34,140 --> 00:07:37,740 How will you judge price effectiveness of your price 131 00:07:37,740 --> 00:07:42,140 program over time in a recessionary environment since 132 00:07:42,140 --> 00:07:45,720 we cannot just say if the. Margin rates or the average 133 00:07:45,720 --> 00:07:48,080 selling prices go up. I must be good and if they go 134 00:07:48,080 --> 00:07:50,680 down, I must be bad. That logic isn't going to fly 135 00:07:50,680 --> 00:07:52,840 anymore. And so you have to think a 136 00:07:52,840 --> 00:07:55,480 little differently. Plan ahead, decide what your 137 00:07:55,480 --> 00:07:58,520 anchor points are going to be so you can measure yourself against 138 00:07:58,520 --> 00:08:00,200 it. Because in the deflationary 139 00:08:00,200 --> 00:08:03,120 world, the assumption is those key metrics are going to go 140 00:08:03,120 --> 00:08:05,200 down. So that's a little that that's a 141 00:08:05,200 --> 00:08:08,160 different that's one example of how you're used to measuring. 142 00:08:08,440 --> 00:08:12,160 But the way in which you measure and define good and bad needs to 143 00:08:12,160 --> 00:08:13,960 be thought through a little more carefully. 144 00:08:13,960 --> 00:08:17,480 In the recessionary world. That's interesting, that 145 00:08:17,480 --> 00:08:20,960 actually makes a lot of sense and it's especially for 146 00:08:20,960 --> 00:08:25,200 Recessionary times. That's a very interesting 147 00:08:25,880 --> 00:08:28,120 example that you provided. Now let me ask you this, how, 148 00:08:28,200 --> 00:08:32,730 how does the goal or or the tactics of pricing of the 149 00:08:32,730 --> 00:08:35,169 pricing team change during recessionary times? 150 00:08:38,490 --> 00:08:41,250 I'll offer with a what I admit is a bit of an 151 00:08:41,650 --> 00:08:44,450 oversimplification, but I sort of think of it like this. 152 00:08:44,450 --> 00:08:46,650 And we'll start with the inflationary time and then we'll 153 00:08:46,650 --> 00:08:49,010 contrast in the inflationary time. 154 00:08:50,170 --> 00:08:54,450 The general goal is to, you know, raise your prices as much 155 00:08:54,490 --> 00:08:57,530 as possible without putting your revenues at risk. 156 00:08:58,610 --> 00:09:03,230 I think most pricing teams are. Inherently seeking this, they're 157 00:09:03,230 --> 00:09:06,030 trying to find that glass ceiling of prices, right? 158 00:09:06,030 --> 00:09:08,030 What's the highest amount I can charge? 159 00:09:08,430 --> 00:09:11,310 And of course I want to move there as quickly as I can, but I 160 00:09:11,310 --> 00:09:12,910 still want to hit other objectives. 161 00:09:12,950 --> 00:09:15,750 I have a revenue objective, a market share objective, so I 162 00:09:15,750 --> 00:09:19,070 don't want to compromise those. But you know, we talked about 163 00:09:19,070 --> 00:09:21,950 leaving money on the table. The pricing team is essentially 164 00:09:21,950 --> 00:09:24,230 saying, how can I take that money off the table? 165 00:09:24,990 --> 00:09:27,400 Where is it? Somebody tell me how much it is 166 00:09:27,400 --> 00:09:30,720 and let me go grab it and bring it back to my own company and 167 00:09:30,720 --> 00:09:33,280 the way I increase my prices smartly. 168 00:09:33,360 --> 00:09:37,480 So all that makes sense. But that's during the 169 00:09:37,480 --> 00:09:40,160 inflationary time. You want to take that money off 170 00:09:40,160 --> 00:09:41,800 the table, put it back in your pocket. 171 00:09:41,800 --> 00:09:45,080 But now let's flip over and look at the deflationary time. 172 00:09:45,880 --> 00:09:48,680 You know, the goal is fundamentally different. 173 00:09:48,840 --> 00:09:53,080 If you know your prices are going down, you are effectively 174 00:09:53,400 --> 00:09:56,290 putting money onto that table. Right. 175 00:09:56,650 --> 00:09:59,570 You're you're putting it on, you're you're giving it away in 176 00:09:59,570 --> 00:10:02,490 some form. You're not taking it back. 177 00:10:02,770 --> 00:10:05,810 And so here is how your tactic changes. 178 00:10:06,850 --> 00:10:11,610 You want to give away the least amount possible and you want to 179 00:10:11,610 --> 00:10:15,410 give it away at the latest possible time. 180 00:10:16,810 --> 00:10:18,330 That's the mindset you have to have. 181 00:10:18,330 --> 00:10:21,450 How can I lower prices just enough but no further? 182 00:10:21,960 --> 00:10:25,360 And I want to delay that price decrease to the latest possible 183 00:10:25,360 --> 00:10:29,760 moment in order to hit my other goals, revenue and share and so 184 00:10:29,760 --> 00:10:31,960 on. And you know, your competitors 185 00:10:31,960 --> 00:10:35,000 are doing this too. And so you can think of this as 186 00:10:35,000 --> 00:10:38,760 like a game of mutual bloodletting, if I could say it 187 00:10:38,760 --> 00:10:40,800 that way, right? He who bleeds the least is 188 00:10:40,800 --> 00:10:44,160 actually the winner. So your job as a pricer in the 189 00:10:44,160 --> 00:10:48,940 deflationary environment is. Honestly and transparently, 190 00:10:48,940 --> 00:10:50,860 you're going to be bleeding off price, you're going to be 191 00:10:50,860 --> 00:10:54,380 bleeding off margin and you want to do just enough, but not too 192 00:10:54,380 --> 00:10:56,180 much. You want to avoid being the 193 00:10:56,180 --> 00:10:58,860 first one to race to the bottom. We've all heard that. 194 00:10:58,860 --> 00:11:02,500 It's certainly true here. So you have to work hard to be 195 00:11:02,500 --> 00:11:05,380 sure that you're not overshooting by the amount of 196 00:11:05,380 --> 00:11:08,660 those price decreases you give or the timing with which you 197 00:11:08,660 --> 00:11:11,220 give them. And so that really inverts, you 198 00:11:11,220 --> 00:11:13,740 know, the tactics that the pricing teams are generally 199 00:11:13,740 --> 00:11:16,860 using in the normal, if you will, normal inflationary 200 00:11:16,860 --> 00:11:22,940 period, HM Okay, that's good. So to put the least amount on 201 00:11:22,940 --> 00:11:28,740 the table at the furthest time is what you're saying does. 202 00:11:28,740 --> 00:11:29,940 That make sense? Yeah. 203 00:11:29,940 --> 00:11:32,220 You know you're gonna have to give something cuz there are 204 00:11:32,220 --> 00:11:35,020 gonna be again, there's an assumption around this. 205 00:11:35,770 --> 00:11:39,170 Inflation or sorry, deflationary period is the price pressure 206 00:11:39,530 --> 00:11:41,410 means prices are going down overall. 207 00:11:41,410 --> 00:11:43,330 They're going down more often than they're going up. 208 00:11:43,330 --> 00:11:45,850 So you have to figure out where do I need to take that price 209 00:11:45,850 --> 00:11:48,250 decrease, how much is just enough? 210 00:11:49,290 --> 00:11:51,450 Not too much. And then you don't want to lead 211 00:11:51,450 --> 00:11:53,450 too early. You don't want to give a price 212 00:11:53,450 --> 00:11:56,170 move, you know, six months before your competitors do it, 213 00:11:56,170 --> 00:11:59,050 Not if it's downward, you don't want to give it away yet, right. 214 00:11:59,210 --> 00:12:03,330 So the timing is going to matter there as well, but at least my 215 00:12:03,330 --> 00:12:06,090 own table, the latest at the latest amount of time. 216 00:12:06,090 --> 00:12:10,330 Now let me ask you this, What happens if I overplay this hand 217 00:12:10,330 --> 00:12:14,290 of mine and I hold back on a price a little too much, or I 218 00:12:14,290 --> 00:12:17,810 hold out on a higher price longer than I probably should? 219 00:12:18,450 --> 00:12:19,890 Does that? Does that hurt me? 220 00:12:20,290 --> 00:12:22,570 Yeah, that's that's really the risk, right? 221 00:12:22,570 --> 00:12:26,410 It is this balancing game and a game of judgment because it 222 00:12:26,410 --> 00:12:30,410 will, you can get, you can get burned on either side so. 223 00:12:30,980 --> 00:12:35,140 Let's use this example you gave. What if I'm hanging on to a high 224 00:12:35,140 --> 00:12:38,980 price in a market where the prices are decreasing? 225 00:12:39,780 --> 00:12:43,060 You know, how does that hurt me if if I my price is too high or 226 00:12:43,060 --> 00:12:45,980 I hang on to it for too and I hang on to it for too long, How 227 00:12:45,980 --> 00:12:51,100 does that hurt me? The way I think about it is you 228 00:12:51,100 --> 00:12:53,900 might have to ask like a correlated question and that is, 229 00:12:53,900 --> 00:12:57,460 what is the what is the scope of that price mistake that I'm 230 00:12:57,460 --> 00:13:00,620 making? You know an example is if. 231 00:13:01,010 --> 00:13:04,450 If I have 10,000 skews in my catalog, and it's only a handful 232 00:13:05,210 --> 00:13:08,170 but doesn't skews, you know where I'm kind of got the wrong, 233 00:13:08,290 --> 00:13:10,690 too high of a price or I'm hanging on to it for too long. 234 00:13:11,730 --> 00:13:13,370 You know what? What might that mean? 235 00:13:13,370 --> 00:13:15,930 When somebody comes to my website and they're filling out 236 00:13:15,930 --> 00:13:19,170 that order, putting things in the basket, maybe I lose one 237 00:13:19,170 --> 00:13:22,730 item on the order and that has some impact, but it's not the 238 00:13:22,770 --> 00:13:26,410 end of the world. You know what happens if it's a 239 00:13:26,410 --> 00:13:29,090 bit more pervasive, and I've got several. 240 00:13:29,620 --> 00:13:33,180 Product categories or hundreds of products that are mispriced 241 00:13:33,180 --> 00:13:35,820 and maybe some products that are very visible. 242 00:13:35,820 --> 00:13:40,660 I do a high volume on those. Well, back to this example, my 243 00:13:40,700 --> 00:13:46,220 ecommerce customer, I might lose several products and in fact if 244 00:13:46,620 --> 00:13:50,140 they're filling out the order online, they might say, gosh, 245 00:13:51,180 --> 00:13:54,700 you don't have much of anything I need priced the way I want to 246 00:13:54,700 --> 00:13:56,380 buy it. So you might lose the order 247 00:13:56,380 --> 00:13:59,480 itself. Now that could be a one time 248 00:13:59,480 --> 00:14:01,160 thing, right? They come to you in January for 249 00:14:01,160 --> 00:14:03,120 replenishment. You didn't have the prices 250 00:14:03,120 --> 00:14:04,200 right. You were too high. 251 00:14:04,200 --> 00:14:05,960 You were too late with your price move. 252 00:14:06,200 --> 00:14:09,960 So you lost the January order. You know if they've been doing 253 00:14:09,960 --> 00:14:12,360 business with you for five years, 10 years, they're likely 254 00:14:12,360 --> 00:14:15,640 to come back in Feb and just try again and see if you sort of got 255 00:14:15,640 --> 00:14:17,440 it right, see if you got synced up. 256 00:14:17,920 --> 00:14:20,200 But what if you. What if you didn't? 257 00:14:20,920 --> 00:14:24,560 What if you continue in a pervasive way and over time, 258 00:14:24,720 --> 00:14:27,060 you're? Always lagging the market in 259 00:14:27,060 --> 00:14:30,100 terms of taking that price down when the others are going down 260 00:14:30,220 --> 00:14:32,660 and you never seem to get in line with the market level. 261 00:14:32,860 --> 00:14:35,620 Well, after the customer comes a couple of three times and gives 262 00:14:35,620 --> 00:14:37,820 you a chance to get serious and get it right. 263 00:14:37,820 --> 00:14:40,820 And they see that you're not and they've given up several orders. 264 00:14:41,700 --> 00:14:44,420 At some point they're just going to move on as a customer. 265 00:14:44,620 --> 00:14:47,140 They're going to decide that you're not the vendor for them. 266 00:14:47,460 --> 00:14:52,060 And then if your situation is really pervasive, I mean. 267 00:14:52,630 --> 00:14:55,550 Major parts of your catalog out of whack, You're hanging on to 268 00:14:55,550 --> 00:15:00,670 prices many months let longer than you should, then you're not 269 00:15:00,670 --> 00:15:02,270 going to lose just one customer, right? 270 00:15:02,270 --> 00:15:04,550 You're going to lose many customers and that's tantamount 271 00:15:04,550 --> 00:15:08,350 to losing a market. So the the, the impact that it 272 00:15:08,350 --> 00:15:12,030 has, how much it hurts you to be too high or too late on your 273 00:15:12,030 --> 00:15:17,550 price move is largely dependent on how often you're making that 274 00:15:17,550 --> 00:15:20,510 mistake on how many products and how long are you hanging on to 275 00:15:20,510 --> 00:15:25,420 that mistake. Wow, But that's that makes a lot 276 00:15:25,420 --> 00:15:28,460 of sense as well. Holding out for too long can 277 00:15:28,460 --> 00:15:31,740 come back to bite you in the bud essentially and not just with 278 00:15:32,380 --> 00:15:37,500 customers or clients starting to potentially question if your 279 00:15:37,500 --> 00:15:40,380 value, if your product is worth that value or not. 280 00:15:40,980 --> 00:15:44,060 But it could, it could move them towards them as a customer 281 00:15:44,060 --> 00:15:46,060 moving on from from your product. 282 00:15:46,540 --> 00:15:51,490 And then the worst case scenario is, as you said, losing many 283 00:15:51,490 --> 00:15:55,970 customers, essentially losing a market as a whole and so huh. 284 00:15:57,050 --> 00:15:59,530 Yeah, there's some tolerance. There's some tolerance for like 285 00:15:59,530 --> 00:16:02,490 occasionally I don't have the numbers quite right. 286 00:16:02,730 --> 00:16:06,050 You could take some bumps and rattles here and there and you 287 00:16:06,050 --> 00:16:09,690 can work that out over time. The market is likely more 288 00:16:09,690 --> 00:16:13,210 forgiving of that. But if you show in a big way 289 00:16:13,210 --> 00:16:15,000 like. Every time they add something to 290 00:16:15,000 --> 00:16:17,480 the cart, you're 15% higher than the other guys. 291 00:16:17,480 --> 00:16:19,960 And you seem to, even though you might say to yourself, well, I 292 00:16:19,960 --> 00:16:23,120 have taken my prices down, you know, since the beginning of the 293 00:16:23,120 --> 00:16:24,920 year, yes. But if you've only taken them 294 00:16:24,920 --> 00:16:28,280 down half as much as someone else, or you've taken it down on 295 00:16:28,280 --> 00:16:30,680 half the products but you've missed the other half, you know 296 00:16:30,680 --> 00:16:32,120 you thought you could hold on to it. 297 00:16:32,400 --> 00:16:33,960 These things are always asymmetric. 298 00:16:34,240 --> 00:16:37,040 You know you'll be able to, you'll need to drop more in some 299 00:16:37,040 --> 00:16:38,720 areas than others. That's true. 300 00:16:39,000 --> 00:16:41,520 Hopefully you can judge each of those appropriately, but. 301 00:16:41,800 --> 00:16:44,080 Let's see if you get it right. Half the time, you miss it half 302 00:16:44,080 --> 00:16:46,480 the time and you stick with that. 303 00:16:46,480 --> 00:16:49,200 That's gonna be more obvious than if you occasionally, you 304 00:16:49,200 --> 00:16:51,920 know, have a blip and then you catch it up in the next cycle. 305 00:16:51,920 --> 00:16:57,840 So it's a balancing act. It takes a lot of finesse. 306 00:16:57,840 --> 00:17:01,760 It takes a way to sense what's going on, you know, watching the 307 00:17:01,760 --> 00:17:04,200 order streams, watching win loss rates. 308 00:17:05,980 --> 00:17:08,900 Looking at well for using ecommerce for example, even 309 00:17:08,900 --> 00:17:11,579 monitoring you know, card abandonment rates would be 310 00:17:11,780 --> 00:17:15,900 incredibly useful information. But even getting feedback from 311 00:17:16,619 --> 00:17:20,740 customer service reps and field sales reps on the kind of thing 312 00:17:20,740 --> 00:17:23,180 that the market and the customers are saying when you 313 00:17:23,180 --> 00:17:25,579 went in with that line item and you went in with that price, you 314 00:17:25,579 --> 00:17:28,260 know, if if you're way out of line, you're likely to hear 315 00:17:28,260 --> 00:17:29,820 that. And if you hear that from 316 00:17:29,820 --> 00:17:32,940 several places, several different customers and close 317 00:17:32,940 --> 00:17:36,400 proximity and time you know. You can begin to trust that 318 00:17:36,400 --> 00:17:39,160 signal, sure, yeah, if the patterns there, it's likely 319 00:17:39,160 --> 00:17:41,720 true. Right now it seems that you're 320 00:17:41,720 --> 00:17:45,480 fairly deep in your exposure on price decreases. 321 00:17:45,840 --> 00:17:48,440 Let me ask if you don't mind me asking where did you get that 322 00:17:48,440 --> 00:17:52,000 exposure since most of the time the pricing function is centered 323 00:17:52,000 --> 00:17:57,160 around around increases. Yeah, that's I too have realized 324 00:17:57,600 --> 00:18:02,640 so many B2B businesses and in their normal times, right, the. 325 00:18:03,230 --> 00:18:07,030 It's up and to the right as we said at the beginning and that's 326 00:18:07,190 --> 00:18:08,630 that's great in the growth market. 327 00:18:08,630 --> 00:18:12,710 But interestingly, Terrence, even in what we would consider 328 00:18:13,110 --> 00:18:17,150 times of growth when the economy is not in a recession or not 329 00:18:17,150 --> 00:18:21,390 under this kind of pressure, there are specific industries 330 00:18:21,950 --> 00:18:27,150 whose natural state is that of decreasing prices over time, 331 00:18:27,750 --> 00:18:29,910 sometimes radically decreasing prices. 332 00:18:30,790 --> 00:18:34,330 And I know that might seem. A bit odd to folks here or you 333 00:18:34,330 --> 00:18:36,770 know maybe if you're in industrial manufacturing or you 334 00:18:36,770 --> 00:18:39,970 are in certain kinds of distribution, you know building 335 00:18:39,970 --> 00:18:43,570 supplies, something like that. You you do not see routine price 336 00:18:43,570 --> 00:18:46,970 decreases year on year in a stable or normal or growth 337 00:18:46,970 --> 00:18:48,810 market. You see increases right in the 338 00:18:48,810 --> 00:18:53,210 inflationary world, but in semiconductors, particularly the 339 00:18:53,210 --> 00:18:58,490 manufacturers making the CP U's and memory chips and so on, LED 340 00:18:58,490 --> 00:19:01,020 lighting. Also went through this and I 341 00:19:01,020 --> 00:19:03,700 think it's still in it several years ago when at when there was 342 00:19:03,700 --> 00:19:08,340 a big conversion out of you know incandescent and fluorescent to 343 00:19:08,340 --> 00:19:12,620 LED lighting the because that's a high tech thing a lot like 344 00:19:12,620 --> 00:19:17,420 semiconductors every quarter and every year prices were dropping 345 00:19:17,580 --> 00:19:22,060 double digit period on period. And so out of those industries 346 00:19:22,060 --> 00:19:25,940 when I've worked with those kind of customers and when I've 347 00:19:25,940 --> 00:19:27,700 talked with them about their needs and. 348 00:19:28,210 --> 00:19:30,730 Kind of gotten In Sync with how they think about approaching 349 00:19:31,210 --> 00:19:33,530 their pricing, since this is where they live all the time. 350 00:19:33,970 --> 00:19:37,210 This is what they live every month and every quarter is 351 00:19:37,210 --> 00:19:41,370 deflationary prices. That's where I've been able to 352 00:19:41,370 --> 00:19:44,330 glean some of my best understandings about what are 353 00:19:44,330 --> 00:19:47,450 the strategies and tactics that should be used. 354 00:19:47,960 --> 00:19:53,000 When any B to B company is in an A deflationary period, even if 355 00:19:53,000 --> 00:19:56,160 that might be the exception for them, you know it's the norm for 356 00:19:56,160 --> 00:19:58,600 someone else. So I've done my best to pick up 357 00:19:58,600 --> 00:20:02,480 on the practices that work and distill those down and you know, 358 00:20:02,480 --> 00:20:05,200 compare them to what is usually experienced in the price 359 00:20:05,200 --> 00:20:08,320 increase world. So that informs my perspective, 360 00:20:08,440 --> 00:20:11,760 and I'm looking forward to sharing more of the ideas and 361 00:20:11,760 --> 00:20:15,000 strategies that I've learned from these industries at the 362 00:20:15,080 --> 00:20:17,600 MIPPPS session coming up in October. 363 00:20:19,170 --> 00:20:22,290 Mr. Barry Thompson everybody. You are full of knowledge on 364 00:20:22,290 --> 00:20:26,330 this topic and you know you would be considered an expert in 365 00:20:26,330 --> 00:20:28,010 this realm. So I want to thank you so much 366 00:20:28,010 --> 00:20:29,450 for being on this podcast with us. 367 00:20:29,770 --> 00:20:31,970 Barry Thompson is going to be with us at our Atlantic 368 00:20:32,130 --> 00:20:35,610 Conference coming up in October, specifically October 10th 369 00:20:35,610 --> 00:20:38,450 through the 13th. Want to make sure you guys take 370 00:20:38,450 --> 00:20:41,730 the time to visit our website priceandsociety.com and visit 371 00:20:41,730 --> 00:20:45,330 the conferences tab to learn more about about the upcoming 372 00:20:45,330 --> 00:20:48,180 conference, those guest speakers who are gonna be in attendance, 373 00:20:48,420 --> 00:20:51,620 and what you can expect. Now, Barrett, one more question 374 00:20:51,620 --> 00:20:54,580 before I let you go. Where can people learn more 375 00:20:54,580 --> 00:20:59,980 about you, or read more about what you stand for, who you work 376 00:20:59,980 --> 00:21:02,780 with, and just all things Barrett Thompson? 377 00:21:03,540 --> 00:21:06,260 Well, I encourage them to connect with me on LinkedIn. 378 00:21:06,650 --> 00:21:10,050 You'll see my profile there at Barrett Thompson 2 R's and two 379 00:21:10,050 --> 00:21:13,330 T's in the first name, and I'll be happy to make your 380 00:21:13,330 --> 00:21:15,050 connection. And also, I look forward to 381 00:21:15,050 --> 00:21:18,290 seeing you at the PPS event. If come by, see me at the 382 00:21:18,290 --> 00:21:21,850 session or see me at the zillion booth on the vendor hall and 383 00:21:21,850 --> 00:21:23,930 let's be sure we trade contact information. 384 00:21:23,930 --> 00:21:25,210 I look forward to seeing you all there. 385 00:21:26,210 --> 00:21:28,130 Sounds good. Thank you so much everybody for 386 00:21:28,130 --> 00:21:30,050 tuning in. Until next time, have a good 387 00:21:30,050 --> 00:21:30,250 one.