All right. Hello and thank you for tuning
into another episode of the Professional Pricing Society
Podcast. My name is Terence, and we have
a duo on the call today to talk with us and go in depth about
revitalizing your pricing strategy and navigating new
entrants and market shifts. Our guest today is from a
company called Holding Advisors. Adnan Akbari, Senior Director of
Pricing, has extensive Fortune 500 experience in energy
management, technology and insurance and specializes in
helping firms commercialize software based offerings.
And we have Lori Rabaski. Lori has deep background in BDB
industrials and manufacturing pricing and brings a wealth of
expertise in SAS customer value research and price model design.
How are we doing today? Doing great.
Excited to be here and appreciate the continued
partnership with. PBS Awesome.
Awesome. Thank you both so much for being
on this call with us and just kind of talking about this this
topic. Now.
I want to go ahead and jump right into this discussion and
ask the first question. Your workshop you're going to be
conducting at our upcoming spring conference is called
Revitalize your pricing strategy and navigating new entrants and
market shifts. If you don't mind, please unpack
this topic for us a little bit and kind of give us a better
grasp of what we should expect from this workshop.
Yeah, for sure. I can jump in and then Lori,
feel free to elaborate as as needed.
So the reason that we're focusing on the revitalization
of a pricing strategy is because what we've seen recently when it
comes to client engagements is this rising need for people to
go back and think through how effective their pricing strategy
is. And the reason that we're seeing
this more and more frequently is that naturally in any market
things change over time, whether that's say market volatility or
recent example could be you know the the change in interest rates
can impact the prices of everything and can increase or
in many cases deep for different types of professional services
or perhaps products. So that's that kind of market
aspect of it. And then in addition to that,
customer needs evolve and change over time.
What customers want, their buying behaviour, their usage
patterns that all changes over time.
And then the last piece that changed over time is the, the
competitive market, meaning the types of competitors that you're
up against, the value that they are bringing to the table
changes and then the value you are bringing to the table
relative to those competitors changes over time.
So given all these kind of changes in the marketplace with
varying levels of frequency depending on the industry, we're
finding that it's becoming increasingly important for
commercial teams to go back and look at their pricing strategy.
To answer a few different questions, one of which is the
pricing structure that we have put into place, does that allow
us to change with the market so that we are continually pricing
in a way that is aligned with the with with differential
value. So that's kind of that primary
reason why we started looking at a topic like this because as we
engage with those clients that that need is just heightening
and we're seeing that more and more frequently.
It makes a lot of sense because a lot of these components when
it comes to a strategy can change over time like you like
you mentioned before. And so revitalizing it and
refreshing it can be very necessary for a lot of pricers
at at any walk of their personal journey.
I think, Laura, you're about to say something.
I'm sorry. No, it's OK.
It's some of the companies we've worked with have also been in
their industries and markets for a very long time.
So things may have changed, but they may not have gone back and
changed their pricing strategy. So this is a good opportunity to
really look at what's changed and make the updated updates
that are needed. That's good.
Yeah. To kind of give an understanding
of what has changed, kind of layout an overview and kind of
take the proper action as needed.
Now Laura, let me ask you this, you know, if you don't mind,
would you please kind of talk about some of the drivers behind
market shifts? Sure.
So Adam alluded to a few of these already.
So some of the things that can change is that your product and
its value can evolve over change, plus your customers
needs are changing over time and then the competitive marketplace
can change. So looking at your products to
begin with, your customers may be changing their needs and that
may make your product less valuable to them than it once
had been. On the flip side, you could be
making improvements to your product and that's increasing
its value and then you could potentially capture more price.
So an example we had with a client that's in the
construction industry, they've been increasing the quality of
their products and the number of products that they offer, but
they haven't really gone back and changed their pricing to
match this increased value. So that's something you've been
helping them to do. I also mentioned like the
customer's needs can change over time.
So this could be caused by regulations.
There can be technology improvements, their workflows
can change and this is another example we saw with that same
client. So the products they were
providing used to be enough, but now it's more about how the
clients are using their products.
And so they're having to evolve their products and the way that
they're used in the process in order to keep up.
And so they're looking at changing things from work flows
to technology that lastly is looking at that competitive
marketplace. You could have a new competitor
come into your marketplace that kind of shifts things.
This tends to happen on the smaller end of the market, but
they can enter there and then grow.
So it's always important to make sure you have that low value
blanking product to kind of help fend off these new entrants.
On the flip side, you could be the new entrant, you could be
coming up with a new product that moves you into a new
market. Again, this construction company
that we've been working with, they're developing new products
that are going to help with workflow changes and uses of
technology, but it's going to get to the market they're in.
So now they're going to have to pay attention to a new market
space and new competitors as well as the one they're already.
And that makes a lot of sense as well because you know if you've
mentioned value can change as well for the customer like what
I what I value as a customer may be different than what I value
even this time last year. And so that requires you know
updates and and shifts. You all mentioned dynamic value
drivers. When discussing kind of the
context of this workshop that's going to be taking place.
Do you guys mind providing our audience an example of what a
dynamic value driver is and how it may be impacting a pricing
strategy? Yeah, I think you you kind of
said it well Chance just now where you said the value of
something that you purchased changed relative to what it was
a year ago versus what it was today.
When you start to boil that down in say AB to B context, the way
we think about the value drivers is the amount of revenue, your
product or services. How that revenue could change,
how how they could generate incremental revenue as a result
of buying your products and services, how it could
potentially decrease costs or how it could decrease risks.
And over time that can change due to some of the things that
we referenced earlier. So a good example of that is we
serve a client that within the Information Services industry
and part of the one of the customer segments that they
serve is within the the the mortgage industry.
So as more the number of say Refi's increase or the number of
new mortgage applications increases, demand for their
services naturally increase. This is 100% independent of
anything that they're doing from a a company perspective,
independent of the product changes they're making and
really even independent of their competitive market.
So then that can beg the question of when the market has
changed, what should you be doing, if anything, from a
pricing perspective, the volume and demand for your services is
likely to go down. Should you be taking that into
consideration from a pricing perspective?
Should you be, say, decreasing prices because volume has
changed in our eyes? Probably not because you're
unnecessarily decreasing prices, but it's those types of
questions any pricing team should be starting to think
through. And then in that inverse
scenario where perhaps there's a change in the market and demand
is increasing, what do you do? Does your pricing strategy
support that and how can you scale and implement that over
time? Because it it the basis of this
is really the fact that what we're again hearing more and
more often is that the value is changed.
We have an existing base of customers where we know that
they're deriving a pretty significant amount of value from
our solutions and we're a leader in the market.
So we think that we are able to command a higher price within
certain segments than we historically have.
But then the question becomes how best do we go about that?
Nobody likes to pay more for something that they're paying a
certain amount for already. So what strategies, what
mechanisms can we put in place to continue to offer our
customers a fair price while not increasing the level of risk to
our business? And that's really what we're
going to get into a lot of depth through over the course of our
workshop. That's good.
Now this is interesting because
you know it does require a lot of change.
It requires a lot of evaluation. Now, you explained it very well
and it's it sounds easy in theory, but could a strategy
like this be a bit too complex for organizations to implement
in your opinion? For the majority of cases, it's
not as complicated as it seems. Prices don't have to be updated
instantaneously or even every month.
You just need to be aware of the macro changes that are going on.
So you need to focus on those things we've discussed.
So what your customers needs are and how they're changing, any
changes in that competitive market and then most
importantly, your product's value.
So being able to change your price is a lot easier when
you're changing your product's value.
So as you add increased value, it's easier to make those types
of adjustments. When it comes to some of the
other things, you need to be aware of what the changes are,
is it a behavioral change or a market driven change?
And if it's market driven, is your market cyclical?
Is this going to change back and is that something that's going
to happen soon or is it going to be more long term?
So you just need to be aware of these changes because if things
do change and they're permanent and don't make any adjustments,
you're going to start falling behind the marketplace and then
you have to be forced to play catch up.
Yeah, this is a great example of just being able to evolve with
the change of times and being able to evolve with the the
changing mentalities, if you will, of customers and clients.
Because that does happen often and this workshop sounds very
necessary for a lot of different pricers.
Now I'm gonna ask you two questions here.
What will your attendees learn during this PPS workshop and
what practical skills will they? What practical skills will they
come away with? Or what practical skills do you
want them to lead with? That's a great question.
I mean what we're what we're wanting attendees to learn is to
have an in depth understanding of how to come up with the right
pricing model that reflects the needs of their respective
businesses. It's going to be different
across that every industry, but we're going to walk attendees
through some real world examples based on these commonalities
that we are seeing with our customers and using that to
train them on how to come up with an offering structure that
is scalable over time. But they can also stay abreast
of the market and some of these changes that come into play.
And just kind of you know referencing back to your your
past question which your Lord had so, so well articulated part
of that, part of the reason why we want to the ability to
minimize that complexity is we're not necessarily saying
that you should go out there and as value changes immediately
increase your prices and have this pricing that's fluctuating
all the time. We're simply saying to stay
abreast of these changes that could happen, whatever they're
driven by and then build a model so that you have a cadence to
capture that incremental value that you're walking away with.
And that's really what we want people to walk away with is to
have an understanding of how they can drive change within
their organizations in a way that is simple and effective for
the organization intake for their customers to intake and
really effectively manage some of these changes with their,
their existing customer base. That's.
Good. That's good.
Awesome. It sounds like it's going to be
a very jam packed workshop and those who are listening who may
be interested, they're going to be at our upcoming Spring and
Pricing Workshop conference being held in Chicago this year,
April 23rd through the 26th. Adnan and Laura, I want to ask
you one more question before I let you guys go for for the day.
Where can interested parties learn more about you all or your
company and what what it stands for?
Yeah, best place to go in and navigate is check out our
website which is Holden advisors.com and then you can
also check out our LinkedIn profiles.
OK, simple enough. We like that.
Awesome. Well, thank you so much for your
time today, Adnan and Lori. For those who are interested,
you can learn more by visiting our website at
pricingsociety.com and click on the conferences tab to register
and to stay in the loop with all things conference and workshops
and break out and keynote session sessions based.
But until then, we'll see you guys later.
Bye, bye.