Nov 16, 2020
Marco Bertini is a Professor of Marketing at Esade, co-founder of the school’s Institute for Data-Driven Decisions, and previously served as department chair. He completed his doctoral studies at Harvard Business School and was on the faculty at London Business School before moving back to Barcelona.
He is a co-author of the book "The Ends Game: How Smart Companies Stop Selling Products and Start Delivering Value," MIT Press, which explores how modern technology stimulates accountability, challenging organizations to succeed from the quality of the outcomes they deliver rather than the offerings they bring to market.
In this episode, Marco talks about how some firms are rewriting the rules of commerce by pursuing “ends” (meaning the actual outcomes) rather than the selling process. He also shares real-world examples of how companies in utility, healthcare, transportation, education, and other sectors are already playing “the ends game” model.
Why you have to check out today’s podcast:
- Discover and know about a Pricing model called pay-per-laugh and pay-per love
- Find out why you should be moving towards a performance pricing model in this day and age
- Learn why you should price for the ‘Ends’, not the ‘means’
“Prices speak very loud to customers, very, very loud. And so, we should be listening to what they say and incorporate that into what we do.”
- Marco Bertini
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Topics Covered:
01:29 - What made him consider a career in Pricing
02:43 - Why he wrote a book that’s not about what his background was
03:48 - Three observations that point to what the book is all about
06:11 - What do you charge for?
08:01 - Objective value and perception value
10:42 - The taxi meter effect pricing versus pricing for certainty
14:21 - What is the difference between a Business Model and a Pricing Model
16:42 - A theater charging by a laugh
19:52 - What conditions must exist in order to achieve value satisfaction and end
24:01 - The different levels of performance for different ends
25:39 - Talking about risk and allocation
26:19 - His best pricing advice that will greatly impact your business
Key Takeaways:
“When you talk to organizations about pricing, they tend to focus mostly on that pricing decision, but then, I always thought that there is a much more important strategic decision that comes beforehand which is really about, what should my customers actually be paying for? What is the metric decision?” - Marco Bertini
“So, we talked a lot in the book about how you need to be able to have, think about outcomes that are quantifiable, that are verifiable, but also they cannot be tampered with. That is a very, very important condition. And laughter, for example, is one of those things that, unfortunately, you can’t tamper with.” - Marco Bertini
“What conditions must exist in order to achieve value satisfaction and end? As a customer, I have to access a product or service, if I don't access your solution, I can't benefit from it eventually. Two, conditions on access, I have to consume it. If I don't consume it, I can't benefit from it eventually. Condition on access and consumption, it has to perform. Those three conditions together are necessary and sufficient in order to get value.” - Marco Bertini
“We're very careful in the book to say that we're not ever claiming that the business is wrong and tomorrow you should be selling for performance. We have a whole section of the book based on what needs to happen not to do that. But yes, we are pretty strong, claiming that, at the very least, ownership models in this day and age, with the technology that we have are pretty much inferior in most markets.” - Marco Bertini
“Don't assume it's just a numbers game. It is certainly a numbers game, but it's much, much broader. Anything you can do to integrate whatever you do with prices, with your overall branding, or corporate strategy is well worth taking the time to do it.” - Marco Bertini
Resources / People Mentioned:
- The Ends Game: How Smart Companies Stop Selling Products and Start Delivering Value (Management on the Cutting Edge) by Marco Bertini
- Power Pricing: How Managing Price Transforms the Bottom Line by Robert J. Dolan
Connect with Marco Bertini:
Connect with Mark Stiving:
- Email: mark@impactpricing.com