Impact Pricing

This is an Impact Pricing Blog published on July 4, 2024, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/understanding-fencing-googles-strategy-to-maintain-regional-pricing-for-youtube-premium/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com.  Now, go make an impact.   Connect with Mark Stiving: Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

Kristen Berman, co-founder of Irrational Labs, shares her expertise in behavioral economics and its impact on consumer decisions. She discusses fascinating pricing strategies, including the Good-Better-Best model and the decoy effect, demonstrating how psychology shapes purchasing behavior. Kristen highlights the challenges of pricing innovative products without reference points and emphasizes the significance of anchoring in consumer perception. Listeners gain practical insights on simplifying choices to avoid decision paralysis and effective techniques to optimize their pricing strategies.

This is an Impact Pricing Blog published on June 27, 2024, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/how-to-charge-different-customers-based-on-value-received/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com.  Now, go make an impact.   Connect with Mark Stiving: Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

Florian Bauer is an internationally sought-after expert and speaker on the subject of price psychology and behavioral pricing. He is an honorary professor at the Technical University of Munich and author of several books on price research. He also has a doctorate in Psychology at TU Darmstadt, MIT, and Harvard. In this episode, Florian talks about how discounts can give you short-term gain but cost you long-term. He underscores that there are other means to incentivize customers without diminishing a products’ value perception. And that cashback is one thing to consider other than discounts. He also talks about buyers’ irrationalities and how to use Behavioral Economics to influence their decision-making and let it work in your favor.   Why you have to check out today’s podcast: Learn about the psychology of price structure and how it influences consumers’ buying behavior Find out what you can, what you should, and what you should not do when giving a discount  Learn how Behavioral Economics can help you influence buyers’ decision-making and maximize your company’s profit    “If you want to price or sell something, you have to think in two dimensions. You have to think about what people want. That's the traditional value-based approach. And you have to think in the dimension of how they decide.”   - Florian Bauer   Topics Covered: 01:28 - How Florian got started in Pricing 02:25 - What the psychology of price structure is all about 03:22 - What a price structure looks like 04:12 - What’s the psychology behind using cashback than just lowering the price 06:03 - How do discounts differ from cashback 07:39 - The feeling of disconnect with cashback 08:20 - Cashback being an icing on the cake that can potentially make you feel more decided about your choice 10:02 - What’s the disadvantage of discounting 11:36 - What behavioral economics means for pricing 16:15 - Different people behave differently when it comes to decision irrationalities 18:00 - His thoughts on the ethical issue about Behavioral Economics 23:22 - What is Behavioral Economics showing us and why this works in the B2B world 25:38 - How heuristics simplify complex decisions 29:35 - Florian’s best pricing advice that can significantly impact your business   Key Takeaways: “Never ever give a discount without anything the customer has to give in return.” - Florian Bauer  “That's the issue with discounting. It really works very well short-term. So, you have to gain short term, but you have to cost long-term.” - Florian Bauer  “If I want to sell somebody something, I need to know what he wants, or she wants, and I need to adapt my sales approach and my pricing model, potentially, to how he decides.” - Florian Bauer “For me, the purpose of marketing, pricing, and sales is to influence decisions. So, there is no reason to have a marketing campaign or a marketing team if you would not have the idea that I can influence my customers' decision in my favor.” - Florian Bauer “I think when we talk about value and price acceptance, it's very much a story. And there is not one story better than another one. People hate to make decisions, they want to be made decided and with some stories, they are quicker in deciding than in others.” - Florian Bauer “Think about that you're not only selling value; you’re also managing decisions. If you keep that in mind when you design your pricing model, you also avoid the traditional clash between pricing and sales because you're also able to tell your salespeople how they can actually execute your pricing strategy to make the customers actually follow the decision or the directions you want them to.” - Florian Bauer   Resources / People Mentioned: Daniel Kahneman: https://en.wikipedia.org/wiki/Daniel_Kahneman   Connect with Florian Bauer: Email: florian.bauer@vocatus.de LinkedIn: https://www.linkedin.com/in/profdrflorianbauer/   Connect with Mark Stiving:   Email: mark@impactpricing.com    LinkedIn: https://www.linkedin.com/in/stiving/  

This is an Impact Pricing Blog published on June 20, 2024, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/revamp-your-pricing-strategy-pros-cons-of-4-popular-models/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com.  Now, go make an impact.   Connect with Mark Stiving: Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

Steven Forth is Ibbaka’s Co-Founder, CEO, and Partner. Ibbaka is a strategic pricing advisory firm. He was CEO of LeveragePoint Innovations Inc., a SaaS business. In this episode, Steven explores the concept of generative pricing, emphasizing how AI can transform pricing strategies through real-time value measurement and dynamic proposal evaluation. He discusses how composable AI applications and generative adversarial networks might drive advancements in pricing and proposal management. Practical advice is also provided on using AI to optimize proposals, including developing effective evaluation rubrics and leveraging AI for better decision-making.   Why you have to check out today’s podcast: Delves into the concept of generative pricing and how it can revolutionize pricing strategies through real-time value measurement, composability, and AI-driven proposal evaluation. Discover actionable advice on using AI to evaluate and improve proposals before submission which includes tips on developing effective rubrics and using AI tools to enhance proposal quality. Explore the future of pricing in a world increasingly influenced by AI, including the challenges of scaling costs, measuring value, and managing pricing with AI.   "Build a system that will evaluate your proposals, including your pricing proposals, before you send them out. You can do this using your currently available AI tools." - Steven Forth   Topics Covered: 01:01 - Introducing the concept of "generative pricing" in the context of generative AI applications 02:17 - Elaborating on the concept of generative pricing by discussing the cost dynamics associated with generative AI applications compared to traditional SaaS applications 04:35 - Discussing the differences in cost between traditional search engines like Google and AI-powered services like Perplexity, highlighting the implications for generative pricing 09:28 - Shift in cost structures and the emerging properties of generative AI applications 13:54 - Configuring solutions that optimize the value delivered to customers continuously 16:02 - The potential for generative AI to enable more accurate and transparent value-based pricing models 18:41 - Explore the concept of generative pricing in the context of proposals and outcome-based pricing 22:10 - The idea of making predictions about the future of pricing, particularly in the context of generative AI, using a website called longbets.com 23:01 - How generative pricing necessitates a rethinking of pricing approaches 24:01 - Generative AI and how it affects cost management and value capture 25:30 - Discussing the implications of generative AI on the value and pricing of applications, particularly focusing on composable AI 28:42 - Steven's best pricing advice and actionable steps for leveraging AI in proposal evaluation and improvement   Key Takeaways: "Yes, we have to be aware of costs. And the pricing systems are also going to need to be cost-management systems. But what's going to drive the configuration is value optimization." - Steven Forth "Is generative pricing a clear, fully baked concept today? No, it's not. But I believe that generative AI is going to cause enough change that it's going to force us to rethink how we approach pricing." - Steven Forth "...possibly as we get more sophisticated and flexible models, we'll be able to more formally manage the relationship between emotional values and also do a better job of pricing in order to reflect externalities." - Steven Forth "We're going to have to really start designing our proposals and our pricing with the assumption that the consumer or one of the consumers is actually going to be an AI. And I think that also changes how we think about the pricing as well, and we're gonna need AIs in order to generate pricing that other AIs are going to accept." - Steven Forth   People/Resources Mentioned: Intercom: https://www.intercom.com Perplexity: https://www.perplexity.ai Google: https://www.google.com/?client=safari Gemini: https://gemini.google.comTheory  Theory Ventures: https://theory.ventures Oracle: https://www.oracle.com Microsoft: https://www.microsoft.com/en-ph/ Totogi: https://totogi.com Long Bets: https://longbets.org   Connect with Steven Forth: LinkedIn: https://www.linkedin.com/in/stevenforth/ Email: steven@ibbaka.com   Connect with Mark Stiving: LinkedIn: https://www.linkedin.com/in/stiving/ Email: mark@impactpricing.com  

This is an Impact Pricing Blog published on June 13, 2024, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/collusion-vs-implicit-collusion-navigating-legal-and-profitable-pricing-strategies/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com.  Now, go make an impact.   Connect with Mark Stiving: Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

Leah Tharin brings B2B SaaS to the product-led growth retention light. Advising organizations to bring growth, product, marketing, and sales in line, scaling to move down or upmarket. She works in the operational details and not the hypothetical clouds with her clients. In this episode, Leah explains the differences between product-led growth (PLG) and sales-led growth, highlighting the benefits of usage-limited freemiums in PLG strategies. She emphasizes the importance of focusing on core value and customer experience when designing freemiums. She advises on pricing strategies, recommending minimal price changes during the early stages and frequent experiments as the company matures.   Why you have to check out today’s podcast: Find detailed definitions of key business concepts like product-led growth (PLG) and sales-led growth (SLG) that offer valuable comparisons to help you understand their differences, as well as applications. Learn practical and actionable advice on pricing strategies, emphasizing the importance of initial pricing for early-stage companies and the need for frequent pricing experiments as the company grows. Deep dive into effective business practices, such as leveraging freemium models and understanding the importance of customer value in pricing strategies.   "If you cannot convince people to use your stuff for free, then I think you should not have any price on your product." - Leah Tharin   Topics Covered: 01:32 - Why she describe the relationship between pricing and value as stressful 03:09 - Defining a product-led growth 06:47 - Leah expanding the product-led growth definition to include interactive demos and automated marketing tools 08:49 - How companies adopt product-led growth to improve cost efficiency and compete with more agile, cost-effective competitors 11:22 - Sales-led growth defined 14:20 - What does a product-led growth focuses in getting into 20:02 - Understanding a Freemium product offer 24:10 - Why she prefers a Freemium model that is usage-limited 26:46 - An outcome-driven way of looking at the minimum viable product  29:31 - Leah's best pricing advice   Key Takeaways: "Traditionally we talk about product-led growth in the terms of trials, freemiums, getting something for free forever until you buy it, and so forth. But I also talk about it in the context of getting an interactive demo where you understand what they now do inside of this demo." - Leah Tharin "...what we try to do in product-led growth is exactly this. It's not so much about how much the customer spends in the initial payment with us or like even the first couple of months, maybe even year. It is about the lifetime value, how fast we can escalate this of course as well because this is also a sign of customer value." - Leah Tharin "For commoditized markets, product-led growth, if it can be done, it's not always the right thing, but definitely the choice that you have to make. In new verticals with extremely complicated integrations, we tend to be more sales-led for sure." - Leah Tharin   People /Resources Mentioned: Netflix: https://www.netflix.com Spotify: https://open.spotify.com Hubspot: https://www.hubspot.com Salesforce: https://www.salesforce.com   Connect with Leah Tharin: LinkedIn: https://www.linkedin.com/in/leahtharin/ Website: https://www.leahtharin.com/   Connect with Mark Stiving: LinkedIn: https://www.linkedin.com/in/stiving/ Email: mark@impactpricing.com  

This is an Impact Pricing Blog published on June 6, 2024, turned into an audio podcast so you can listen on the go. Read Full Article Here: https://impactpricing.com/blog/price-segmentation-in-action-why-geography-matters-for-your-wallet/ If you have any feedback, definitely send it. You can reach us at mark@impactpricing.com.  Now, go make an impact.   Connect with Mark Stiving: Email: mark@impactpricing.com LinkedIn: https://www.linkedin.com/in/stiving/  

Mac Kremer leads the pricing strategy practice at K1 Investment Management. He is experienced in B2B SaaS investing and value creation work. In this episode, Mac shares strategies for growing SaaS businesses through price increases, upsells, cross-sells, and increased usage. It discusses the complexities of implementing pricing systems and emphasizes the importance of flexibility and understanding your pricing model. Additionally, it highlights the need to educate sales teams on value-based selling to reduce discounting and improve sales effectiveness.   Why you have to check out today’s podcast: Discover valuable strategies for growing SaaS businesses, including ways to expand, manage and track revenue streams effectively. Understand the complexities of implementing pricing systems in various-sized companies and find out solutions from simple tools to more sophisticated systems. Learn practical tips on communicating value to customers, helping sales teams to sell more effectively reducing the reliance on discounts.   "Sit down with whoever's responsible for pricing, decide to set up a committee and a cadence and just start talking about it more and more." - Mac Kremer   Topics Covered: 01:35 - How Mac found himself in pricing 02:42 - Describing his role at a private equity firm as both an advisor and consultant 03:38 - Discussing the importance of customer conversations in understanding value propositions 05:47 - Explaining that value can also include benefits beyond profit 07:28 - Similarities and differences between B2B and B2C purchasing decisions 08:49 - Using ROI calculators and the ability of sales reps to contextualize ROI within the business's specific goals 09:56 - How ownership of pricing in a company depends on its stage of development 14:01 - Importance of forecasting and budgeting for pricing activities 16:00 - Understanding the sources of revenue growth highlighting the four ways to grow a customer: Win, Keep, Grow 19:49 - What to focus on when it comes to net revenue retention 21:35 - Variety of pricing systems used and how it depends on the complexity of pricing models used 23:55 - The complexities of implementing and managing pricing systems as companies grow 25:57 - Helping salespeople understand and communicate value 29:06 - Mac's best pricing advice   Key Takeaways: "Customer conversations are so critical to understanding the value proposition of your solution, and where you kind of see your customer's perceiving value before you even start to talk about price." - Mac Kremer "The best place to start when you're having customer conversations is, you can go in and you can kind of engineer the true value calculator, the EVC, the economic value to the customer. But I think it's also just understanding their perception of the value that they're receiving. Because I think value comes in a lot of different forms, even outside of just profit." - Mac Kremer "A lot depends on the complexity of your pricing model when you go to think about what system we should be using?" - Mac Kremer   People/Resources Mentioned: Maxio: https://www.maxio.com Chargebee: https://www.chargebee.com Gainsight: https://www.gainsight.com NetSuite: https://www.netsuite.com/portal/home.shtmlSalesforce:https://www.salesforce.com Tableau: https://www.tableau.com   Connect with Mac Kremer: LinkedIn: https://www.linkedin.com/in/mac-kremer/   Connect with Mark Stiving: LinkedIn: https://www.linkedin.com/in/stiving/ Email: mark@impactpricing.com