Dec 26, 2022
Steven Forth is a Partner in Ibbaka, a strategic pricing advisory firm. He was CEO of LeveragePoint Innovations Inc., a SaaS business designed to help companies create and capture value. Steven is what I consider one of the great pricing thinkers in our industry.
In this episode, Steven shares Ibbaka’s approach on raising prices, especially during inflation, as he discusses what’s expected to happen in the pricing world next year, given all the events that’s been around this 2022.
Why you have to check out today’s podcast:
“Learn how to build value models, and connect them to prices.”
– Steven Forth
01:18 – Steven’s perspective on whether people should be thinking about raising prices now, along with questions to ask before you do so
04:59 – What Mark teaches his clients vs. Ibbaka’s approach in raising prices
09:31 – Discussion around an inaccurate representation of inflation, especially in SaaS
12:40 – “Pricing is a game that plays out over time, and you always want to make sure you’re thinking three to five moves ahead. If you don’t, you’re going to hurt yourself.”
16:16 – Taking a look at (1) the people you sell to, (2) how recession affects prices, and (3) the finance industry
20:53 – What’s happening right now? What is going to be different in 2023?
26:43 – Steven’s pricing advice
“There may be opportunities to raise prices, but it needs to be surgical, not broad brush. And before one raises prices, one has to ask a series of questions, beginning with what is inflation doing to my customers? And is inflation making my offer more valuable to my customers? Because if it is, then you have a great reason to raise prices. But if my customers are getting in trouble and are becoming more cost conscious because of inflation, then broad brush price increases can backfire.” – Steven Forth
“I think the first thing you do before you raise prices is segment your customers and treat them differently.” – Steven Forth
“Pricing is a game that plays out over time, and you always want to make sure you're thinking three to five moves ahead. And if you don't, you're going to hurt yourself.” – Steven Forth
“When we hear the word inflation, we're thinking mostly about the CPI. The CPI is not what is most relevant to business. And you have to look at how inflation is impacting your customers and even your customers’ customers in order to make the right pricing.” – Steven Forth
“If you don't have a data model that you can apply A.I. to, you are going to lose.” – Steven Forth
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