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Dec 9, 2019

Why you have to check out today’s podcast: 

  • Difference between talking to customers about the value of the solution versus the price of the solution 
  • How do people make purchase decisions 
  • How to use choice-based conjoint analysis to determine consumers' perception of value and willingness to pay 

 

Kevin Christian is a highly accomplished pricing leader with 20+ years of track record overseeing pricing strategy, pricing operations, licensing, and packaging for various technology-focused organizations. Leverages expertise in pricing strategy to maximize profits, as well as pricing operations, quoting, and capturing pricing of products inside third party systems.  

He has experience at technology companies in Silicon Valley and beyond, with strong knowledge of portfolio packaging strategies for hardware, software, cloud, Web 2.0, professional services, SaaS, and IT products and services. 

In this episode, Kevin deep dives into the topic of conjoint analysis, how to use it to help in pricing decisions. Though it has its own limitations, he will also discuss how it can be improved upon. 

 

“ If you’re only talking about the price of the item without talking about the value, then you’re really in the buyer’s territory.”

– Kevin Christian

 

Get Accelerate Your Subscription Business: Your Blueprint to Packaging & Pricing for Growth Course at https://www.championsofvalue.com  

 

 

Topics Covered: 

 

 

04:04 – How do people make purchase decisions 

05:56 – How do businesses decide to raise the prices  without affecting demand 

07:41 – Kevin’s career background and making a headstart at the conjoint model of pricing 

08:27 – Mark’s discussion on the difference of conjoint model between B2B versus B2C 

09:47 – Kevin’s thoughts on where the conjoint model works best or less 

10:51 – The interesting thing as well as the problem with B2B in using conjoint analysis 

11:52 – Behavioral factors and negotiation skills involved in conjoint analysis 

12:50 – Limitations of conjoint model and how it can be improved 

15:28 – How conjoint analysis is done according to Kevin 

19:17 – Difference between talking to customers about the value of the solution versus the price of the solution 

 

 

Key Takeaways: 

 

“Seeing what that means to me in the real world is that a lot of businesses probably have an opportunity to raise prices by a little bit, which could make a huge difference to them at the end of the year in terms of their profitability and probably wouldn’t make much of a difference to their customers if it’s small-dollar item.” – Kevin Christian 

 

“I guess what I’ve seen a lot in the B2B space is you’re typically dealing with situations where it’s a direct sales force. The deals are highly negotiated and the deal sizes are typically six figures or more and so in the B2B space, in my experience, just conjoint isn’t as obviously the right way to get your optimal price as it is in the B2C space where you’ve got lower selling prices, higher volume of items.” – Kevin Christian 

 

“One thing that I’ve seen with conjoint is that sometimes there’s a difference between what happens in the study, which is a lab situation or an experiment when you’re doing your market research study. And then what happens in the real world, and sometimes the purchase behavior in the real world is not exactly the same as the purchase behavior inside the conjoint study itself.” – Kevin Christian 

 

“If the bear gets in a fight with an alligator who wins. think it depends on where they’re fighting and if they’re fighting on land, the bear is more likely to win. And if they’re fighting in water, the alligator is more likely to win. And what I like about this for pricing is when you talk about the difference between talking to your customers about the value of the solution and talking to your customers about the price of the solution.” – Kevin Christian 

 

“I think when you’re talking about the value of the solution, you’re in the seller’s territory and you’re talking about something where you know the seller is going to benefit from that conversation. If you’re only talking about the price of the item without talking about the value, then you’re really in the buyer’s territory.” – Kevin Christian 

 

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