May 26, 2020
Why you have to check out today’s podcast:
Pricing is where it all comes together, says Steven Forth - co-founder of Ibbaka the leading platform to price and differentiate for the client’s market.
In this episode. Steven shares
how he helps companies redefine their value, as well as how they
price offerings in the marketplace through a combined deep
understanding of pricing design with market segmentation and value
creation.
“Segment your customers based on value. You need to understand what your value drivers are.”
- Steven Forth
Increase Your Pricing Knowledge: Become a Champions of Value INSIDER!
To sign up go to insider.championsofvalue.com.
Topics Covered:
01:24 - Backstory of how Steven started his pricing career: How sitting down with Tom Nagle and reading his book was a turning point in Steven’s career
03:56 - Pricing being an indicator and diagnostic tool in business
05:00 - With new trends coming up in the market, Steven shares what he is seeing as happening in Pricing these days and his insights about it
06:32 - Pricing and one's willingness to pay
08:05 - As there are different views about value-based pricing, Steven shares what value-based pricing means to him
11:42 - Some companies say they have a problem with pricing, but after digging deeper they actually have a value problem. Steven expounds on this
16:02 - Pricing optimization is based on available data around. How do B2B and B2C differ when it comes to available data to utilize
16:02 - As B2C obtains more data than B2B, how do these two differ in terms of value-based pricing and dynamic pricing
19:31 - Steven expounds on conventional economic theory and how it relates to price elasticity of the demand curve
22:28 - Where does value-based pricing tie into outcomes-based pricing
26:21 - Talking about pricing power. Who has the most pricing power?
28:21 - Why do you need to have a deep understanding of value when it comes to executing outcomes-based pricing
30:35 - Steven discusses the importance of different economic value drivers and emotional value drivers especially where medical companies are concerned
Key Takeaways:
“Pricing is a great indicator and diagnostic tool. It lets you explore so many different parts of the business.”- Steven Forth
“Dynamic pricing has always been how commodities are priced. Markets are dynamic pricing. That's what they are. And we've learned how to make the algorithmic and apply artificial intelligence and machine learning to it.” - Steven Forth
“Willingness to pay is an outcome. It's what you're trying to shape. Framing pricing around willingness to pay, and doing analytics to estimate willingness to pay, I think is actually a way to sub-optimize your pricing outcomes.” - Steven Forth
“Value-based pricing for me is an understanding of the economic, emotional, and community value that your offer creates compared to the alternatives.” - Steven Forth
“Whoever takes on the most risk has the most pricing power. The seller’s ability to predict value outcomes should be more powerful than the buyers. Therefore the seller should be willing to take on more risk.” - Steven Forth
People and Resources Mentioned:
Connect With Steven Forth:
Connect with Mark Stiving: