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Jul 26, 2021

Alex Hoffman is an articulate commercial leader with extensive experience in addressing profitability challenges through Commercial Analysis, Pricing / Business Strategy, and Portfolio Management.

In this episode, Alex Hoffman underscores how pricing tools, insights that pricing experts develop, and the key decision-makers play a crucial role in value-based pricing. And most importantly, effectiveness in communicating those important insights has to be taken into consideration.


Why you have to check out today's podcast:

  • Find out the six features that are critical to setting pricing that could maximize the capture of value from customers
  • Learn how to capture the value that's created through product innovation and understand the critical nature of the message
  • Understand the crucial role of marketing in pricing


"Using market research, using your past campaign performance, figure out the economic value you bring to the customer. The first thing you need to do is figure out the value, and more importantly, does the customer perceive that value?" 

- Alex Hoffman


Topics Covered:

01:45 - Alex's weird and circuitous way of getting into pricing

03:05 - What got him interested in pricing that he stayed with it

04:24 - Sharing successes at implementing value-based pricing in Telstra

07:34 - How Telstra uses conjoint in pricing

09:18 - Using conjoint for churn

10:48 - Honing your marketing message for a specific segment

12:56 - Marketing as a critical role in pricing

14:32 - The hard part of focusing on both cost and value when pricing

16:06 - Looking at the subscription model from the ground up

18:02 - The idea of cross-subsidization

19:37 - Interesting concepts around cloud-based gaming that could help boost the margin

20:20 - Talking about the disparity between the sophistication of the pricing tools, pricing teams' insights, and those who make the critical decision

23:00 - The law of agency kicking in

23:39 - The hard part of having the 'burden of proof' displaced

25:21 - How things can work if you have a support network

26:12 - What destroys margin across the entire Telco industry

28:20 - Alex's best pricing advice that can greatly impact one's business


Key Takeaways:

"And as you get involved in pricing, you really understand the critical nature of the message. So, we're about capturing the value that's created through product innovation and the like. But if the messaging and the marketing doesn't adhere to that, you get nowhere." - Alex Hoffman

"You need to ensure that you've got strong input and buy-in into the marketing, as well as the pricing, the pricing strategy, the financial analysis. Marketing is a critical part of the role." - Alex Hoffman

"With 5G coming on board now, cloud-based gaming is dynamically growing, and customers who are game addicts, by the very definition do not necessarily behave in a rational way, at particular points in time when they need their surging speed; they are prepared to pay what I would call almost surge-like pricing. And so, you can develop all sorts of interesting concepts there that could help boost the margin." - Alex Hoffman


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