All right, good evening. And thank you all for tuning in
to another episode of the professional.
Pricing Society podcast. My name is Terrence and we do
have another great episode in store for you.
All today pricing thought leader. /.
Shall first, we'll be taking the time to discuss with us.
Holistic approaches to pricing which are also thoughts from his
latest book. The price, whisper a holistic
approach to pricing power /. How you doing today?
I'm very well Terrence and I'm happy to be on the epidural, be
on the show. I hope is going to be not only
informative but also entertaining a little bit from
for the audience and for you too.
So I'm looking forward to the conversation.
Good, let's dive right into it. Go ahead and tell us a bit about
your background and really what the pricing power means to you
as it pertains to your career. Yeah.
They so the story here and and I think this is important for the
context is that I Um, first of all II got the, the moniker the
pricing power because people started to call me the price
whisper and and and because I got a wacky name.
I decided to adopt it, you know. So the story here is that I ran
a couple of companies in Europe. Before I moved here to the US
and came here to establish a no no division were fairly large
public company. And and, and and then I had
another for CEO positions. And in all of these instances,
we did experiments with pricing. Some of those experiments were
very successful, others were complete Duds and most of them
were simply in inconclusive, right?
And what I mean with having a successful pricing experiment,
meant that the next quarter revenues would be up like 25%.
And, and, and, and We couldn't, we couldn't understand why some
of those experiments worked in others, didn't.
And what I had learned in business school and what I could
read about pricing was so theoretical and so academic that
it, it, it was really useless information.
So, 15 years ago when I decided I was too old and too
opinionated to to be Hired Gun. It was time for me to set up my
own company and take that interest in pricing that I had
and a process to make every pricing experiment that success.
And and, and that is what we do in my company.
And it is all about, providing our clients, a methodology to
gain pricing power and pricing. Power is a term that was coined
by Warren Buffett and and and and he said that the most
important Criterion for in investing.
In a company is whether they have pricing power and he then
continued to say that and pricing power is the ability to
increase prices and not lose sales volume.
And that's the Holy Grail e. Yeah, that makes perfect sense.
Okay, so we think about the term pricing power.
How does a holistic approach tie into that?
What is a holistic approach to mean?
And, well, the the we have to look at pricing.
Power is is something that a company earns, right?
You cannot just increase prices and believe that.
It's It's going to work, right? Sometimes if you're well on the
price, yes, you can. But many times not.
And what I mean with the the learning learning the the the
right to have pricing power is about understanding how
everything that you your do in your company, affect your
Pricing power or lack thereof. And that means that the way you
target your customers effects effects, your pricing power
because you do want to Target your customers that has a higher
willingness to pay and therefore support higher prices then
another customer segment, right? So you need to know what your
customer segments are willing to pay.
You can focus on the most desirable one, you need to know
how the features and functions of your product or your service
affects what people are willing to pay for it, right?
And if you if you know what they're willing to pay, you can
make sure that you have the best product to Market fit.
You can make sure that you in your promotion and in your
marketing, you're using the The features and functions that
support higher prices, then other features functions and
benefits, right? Likewise you need to understand
your marketing. What marketing channels, what
marketing messages, what marketing, methodologies leads
to attract potential customers that has a higher willingness to
pay than other marketing channels?
Less than other messages, the other methodologies and the same
with sales and and again you need to understand what sales
channels and sales methodologies and so forth.
Leads to a higher higher, willingness to pay, and who the
customers are, who have that higher willingness to pay again,
supporting higher prices. And finally, you also need to
know again the, the how to stratify your pricing in such a
way that it minimizes sales friction.
And, and submit maximize your revenues and your profitability.
Ability, or possibly or your sales volume, if that's
important for you, but profits are more important than sales.
Volume. Sure.
So unless you understand, and this is, the holistic view.
Understand customer segmentation understand product to Market
fit, understand marketing, understand sales and understand
pricing strategy all together. Means that you can Elevate
companies to really to the next level.
We're not talking about a few percent here.
And there, we talk about doubling sales volume right with
all doubling revenue or more, right?
So it's it's it's transformative for a company completely
transformative. That doesn't mean it doesn't
mean that you should not Do some of the other stuff that that is
also important like sales transaction and houses and price
waterfalls and shorts. But the problem with all of
those is that they are backward-looking, you know, if
you do the the take that holistic projects forward
looking so so. And like I said, it transformed
companies. Yeah, absolutely.
So you just listed a number of different components that
companies can use to gain this holistic approach to possessing
pricing power. One of the things you mentioned
was honing in on the customers that have the willingness to pay
a little bit more. Now, how does a company, how can
they measure the trust, you know behind that or or the result
behind companies that are consumers that are willing to
pay more? Well, he's actually not only
consumers, it's the it's the same in business to business,
you know, We think we do rational buying decisions,
especially in business-to-business.
What? We not, you know, all purchase
decisions are emotional, you know, John and then we put
rationale on top of it to justify the decision for
ourselves. So, I mentioned that when I
started up my own company here, they the the I developed a
methodology to That makes every pricing experiment a success,
and this is to understand how all of these variables, affects
willingness to pay, and, therefore, affects how you can
price. And there are many in this is
done in in online, polling of a Marketplace, and that could be a
B2B Marketplace for. It, could be a consumer
Marketplace and the methodologies that are out,
there are not good enough. So so we developed our Our own
and we also developed our own AI software that analyzes the data
we capture from from from the market.
And is it Dependable? Well, I have 700 more than 700
customers, they said, yeah, it worked perfectly, right?
And I'm customers, it says things, you know, things like
yeah, pair, you helped us. 10x our company helped us 5x.
Our company, you helped us increase Revenue with four
hundred percent, right? Yeah.
I got a unsolicited email from a customer couple of weeks ago and
it was a screenshot from his accounting system and I could
see that his his his sales volume with down a few percent,
and his margin was up 49%, right?
Yeah. And his message was very short.
He said less work more money. Many thanks - that's awesome
now. Now, how should a company
Implement these learnings from willingness to pay research?
Well, I think you're bringing up something that is very
important. And first of all, it needs to
Um, the process is that needs to be implementing need to come
from the top of the company. It needs to come from from
really, from the CEO, or certainly the sea level.
If it's a, if it's a very large company but it's all every
company have sort of a gut feeling about the market.
They have a gut feeling of corporate gut, feeling of why
people buy, why don't buy what they're willing to pay and so
forth, you know, and if the company has Salespeople.
They have a gut feeling that is is they are being grind down,
right? Because they here day in and day
out that your product or your service is not as good as
competition. And it's more expensive, right?
So, the, the most important thing is that the company
organizes Training programs, because everybody who's in sales
know the the the the proverb buyer liar, right?
So, don't believe when you're trying to sell something to
somebody, don't believe what they say, don't believe what
their willingness to pay is because some some of these
buyers will lie outright some will simply withhold information
and some wood Will be truthfully truthful, of course.
But for sales people to hear that day in and day out, they
get grind down. So they need to understand what
Companies or what their clients really are willing to pay
marketing needs to understand. They need to be trained on
understand what channels and messages really support that
higher willingness to pay and support higher prices, you know,
product management. Need to know what feature
functions and benefits that supports higher prices than
other feature functions of benefits.
And, and And the same, you know, same with the, you know, the
sales organization, you know, the need to know, not only what
customers are willing to pay, but what they're willing to pay
more for, right? And, and obviously, there is a,
there's a lot, a lot of discussions and we talk about
value pricing, right? Well, unless you understand from
the market, what they value, it's just It's work.
Mmm, you know if you as a company try to figure out what
value your product or service gives a company.
It's you know you can make assumptions and assumptions is a
is a is is another word for guessing it.
Maybe a maybe an educated guess but it's still a guess, right?
And and he instead if you measure what people actually say
they're willing to pay, you have how they value that product or
service and it's not guessing anymore, right?
So he's saying that's a survey. Did you guys surveys?
Yeah online. Surveys.
Yeah. Okay.
And people say one of the
questions I get very often is how can we trust it result?
You know, how can we trust that you talk to the right people?
And again, we have device to process that.
That that in a very sneaky way, disqualifies people who we don't
want to talk to because obviously garbage in garbage
out. Yep.
And and when we do these these
projects we often disqualify 95 to 98% of people who starts a
survey. Wow.
Okay. Because we want to talk to the
right people. Yeah, yeah.
And and, and And and then we have our animation that are AI
software called predicted demand analysis, or predicted, sales
analysis. And we in that, we can see how
people answer the survey we can see if they lying and the
software can assess. If they lying there, the their
data could kicked out and not used for the analysis.
Wow. Yeah, well that's that's that's
amazing coming from, you know, you guys develop your own
software. Yes.
Be able to detect these type of things and be able to, you know,
have this type of Insider knowledge to be able to share to
others this amazing. But but remember I started to
say that it all came from my experience running companies,
right? And and from my very early
interest in pricing and pricing mistakes.
I did, you know, but the very first company I II established
in Ran we priced ourselves really low mmm.
And I sold through a channel and and eventually I realized that
they were marking up our product to the Yahoo, you know.
So they were making lots of money on our product that was
Innovative and so forth. And And and we were struggling
because we were pricing ourselves too low.
We didn't have enough profits, to be honest, you know?
So so that was one of the mistakes I did, you know?
And, and, and then we did the other experiments that worked
really well. You know, that one one I
remember was this is what professional the electronics and
we went to a trade show and the, the, the everybody said you
should not Prices on your products on the trade show, we
put prices on our product on a trade show and and and and I
people coming up to me saying that I thought I'd never afford
this product but now I can see, I clearly can.
Mmm. Yeah, just being upright and
honest with with them. Yeah, correct.
Yeah. And and I remember when, when I
moved here, then to the state's the, the said I stabbed his and
ran a Division of a fairly large public company and also
professional electronics. And we develop the product and
the CEO of the company said we're going to price.
This is at 1,100 bucks, right? Just I don't think they're
right. Yeah and I said no it's going to
be 3800 and and you know we don't know how much it was some
of that I think over two year period period.
Did we sold about 40 45 million or that?
Wow, that's amazing. Yeah, so and that was really
from scratch, you know. So but you can imagine having
having a fifteen percent margin versus having a 400 percent
margin made it. A little bit of difference on
the bottom line. Absolutely, I'm sure any company
in their right mind would you know love to have those type of
numbers and you know, regarding their increase so as a pertains
to You just recently had a book your latest book price.
Whisper a holistic approach to pricing power.
You go over these different components to possessing a
holistic approach. Yes, I do.
Yes for companies. Okay.
So, yeah, even more about your about your book.
Well, I'll tell you the, the I've done a lot of white papers
and articles and all different, all different Publications.
So I've been published in Forbes and ink and New York Times and
all different, you know, Financial Times all different
Publications like that. And, and and so, I thought to
myself that I should have a book, right?
And I sure I said, well, why don't I take all these white
papers and all these articles and and just put it in a big
document and write some glue around it, right?
It didn't work that way. It didn't work that way.
I had to, I had to read, I mean I had to rewrite just about
everything in the in the book and and but it goes into a lot
of detail on exactly what I've been talking about here.
And how you how a company can gain that holistic, approach,
and and how how how it can leverage leverage a better
understanding. One of the markets willingness
to pay segmented in the way I've described here for you to
elevate themselves to elevate the company, to the next level.
And we're getting a lot of our business from private Equity
groups or rather the portfolio, companies to private Equity
groups. And I don't know if the audience
know much about private Equity that they typically by
companies. Or buy a very large chunk or
majority of a company and and and and they they then they sort
of turn them around. And what they typically say is
that they call something the whole time means they want to
turn around the company and then hold the company for between
three to five years and then sell it at a profit.
And I have private Equity Group saying that well, pair you lower
the whole time. From five years to a year and a
half so thank you very much. Wow.
You know you have you have plenty of proof that your
strategies and methodologies have been working very well.
Oh yeah, I spoke to the CEO of a company.
We worked for in a very niche market.
We worked for them with a project, this spring and he
basically said well pair Our pricing saved our rear behind
this year. Sure, you know, and, and so,
he's happy and he's one of these private Equity Group own
company. So so he's about to exit that
and stop the the next Journey to the next.
Next private Equity Group Company.
Awesome, well, bear. I want to thank you so much for
your time today sharing your knowledge will insights about
pricing power and hold it. Approaches, can you please share
with us where viewers and listeners can retrieve any of
your materials or resources? Yeah.
The the absolute best way is simply to just do a Google
search for the price. Whisper, you'll find me.
You'll find my company. You'll find my YouTube channel.
You find lots of the publication's.
I've done, you will also find a company called red fin that It
had a had a service to value your house, that they also
called the price whisper, but but that's the easiest way to
find me. You can also go to my last name,
show force.com go. You can do go to the price
whispered about me and that also finds me so.
All right, so you have a month and I would encourage people to
go to Amazon and get my book because it's it's gotten the
tremendous feedback from from people who read it.
So, Okay, awesome. If you are somebody, that's
looking to get, get more from your information about holistic
approaches, the pricing power. I want to encourage you all to
please look into purchasing, mr. Chauffeurs latest book, the
price whisper a holistic approach to pricing power,
outside of that thing is so much good.
Surfer spending time to speak with me today about your your
latest book and of course your expertise in the field.
So I appreciate that. Thank you so much sirens, and I
hope this was good for you and I hope Hope it was good for the
listeners. Thank you so much.
Absolutely.