SBP 018: Confessions of a Pricing Man, with Prof. Hermann Simon

On this week's episode of the Sleeping Barber Podcast, we are excited to welcome Prof. Hermann Simon to the show. Prof. Simon is a bestselling author of more than 40 books and is a leading authority in pricing. His accolades include being inducted into the Thinkers50 Hall of Fame and having a Chinese business school named after him in Shouguang. 

We had the pleasure of discussing various topics, like defining the three drivers of profit, good v. bad market share, profit killers, and much more. It was an incredibly enlightening conversation we know you'll enjoy. 

Enjoy the show.

____________

Our Guest:

Follow Prof. Hermann Simon: https://www.linkedin.com/in/simonhermann/recent-activity/posts/.

Follow Simon-Kucher and Partners: https://www.linkedin.com/company/simon-kucher-&-partners/.

Thinkers50 Profile: https://thinkers50.com/biographies/hermann-simon/ 

Confessions of the Pricing Man: https://www.amazon.ca/Confessions-Pricing-Man-Affects-Everything/dp/3319203991/ref=sr_1_1

____________

The Sleeping Barber Podcast:

Follow our updates here: https://www.linkedin.com/company/sleeping-barber/

Get in touch with our hosts:

Marc Binkley: https://www.linkedin.com/in/marcbinkley/

Vassilis Douros: https://www.linkedin.com/in/vassilisdouros/

____________

Literature and Links:

• The Pricing Man Summary: https://jamesclear.com/book-summaries/confessions-of-the-pricing-man
• Hermann Simon Articles: https://hermannsimon.com/articles/
• Herman Simon Books: https://hermannsimon.com/books/ 

____________

Timestamps

• 0:48 -  Intro to Hermann Simon
• 2:46 - Price, the neglected stepchild of the 4Ps
• 4:29 - Cost plus, the most frequent pricing mistake
• 7:00 - Why profit, not volume, is the only meaningful goal of a business
• 9:45 - Why the airline industry is prone to price wars
• 12:15 - Profit killers: overcapacity & market share
• 14:56 - How to counteract price war
• 17:19 - Why do marginal costs define the lower price limit
• 19:06 - The three drivers of profit & which is most effective
• 23:08 - Why companies should orient to price, not volume
• 26:49 - Reconciling shareholder return vs. profit maximization
• 29:15 - Good v. bad market-share
• 32:02 - Pricing and where does it live
• 36:00 - The two categories for salespeople. Value sellers and price sellers. 
• 41:22 - Price and its effect on product development
• 45:00 - Understanding pricing models
• 52:45 - Subscriptions-based pricing model
• 56:30 - Customers' willingness to pay
• 1:05 - Post pod discussion with Marc and V