Well, all right. Thank you all so much for tuning in and joining us for another PPS podcast. We have a very special guest with us today. His name is Frederico Zornig. He's actually going to be one of our guest speakers that are upcoming Atlanta conference this October, October 10th through the 13th. To be specific for our Atlanta conference Fall conference, very excited to have you today. Frederico, how are you doing today? I'm doing fine, Terence.
Thanks for the invitation. Good. Absolutely. I'm glad you're here with us. Now you're gonna be speaking with us about a complete pricing journey. That's what today's topic is about. If you don't mind, go ahead and elaborate on what this is gonna be about and why this excites you. Sure. Actually we are going to bring a very broad perspective in terms of pricing. We are going to discuss.
The prices strategies that we might think about, usually people are always thinking of premium price or low price and definitely we have to go beyond that. We have to think about product life cycle, we have to think about short term and long term pricing. What does that mean in terms of strategy? We also have to think about our prices if you're going to be. Publishing those prices to the consumer or to your customers or if you're going to negotiate those prices.
So for each and every decisions that you have to make regarding to your prices strategy, there are outcomes that you have to think about on how you're going to manage those. So that's the first step then we are going to think about customer segmentation. Definitely, most companies do that. But usually what I have found is that companies are segmenting their customers based on characteristics of that customers.
What I'm saying, oh, those are the distributors and those are the retailers or those are my customers that are doing business with me for a long term or something like that. And we want to go a little bit beyond that thinking about customer behavior. And what I'm saying about customer behavior is that you might. Find on your database customers that are really loyal to your business and they're paying higher price than average and they're coming back every month for every week for some
purchases. And thinking about this direction, you may identify different types of customers and how they behave to your company. And that's the idea about customer segmentation that you're going to bring. Next steps going to be how you define your prices. So we are talking about pricing methods here. Definitely many companies are using the standard method which
is the cost plus. So they figure out how much it costs to buy or to manufacture their goods or services and then they estimate a profit that they want to make and you have your price set. But the idea is to go beyond that as well, so. We are going to bring approaches like value based pricing, how we can really identify what are the value drivers that you are offering if you have differential value to capture into the market.
And we are going to show a little bit on how we do that, examples, cases that we have implemented successfully, new approaches to capture value in the market through pricing methods. Well, with pricing methods, you're going to define your price list. But that's not enough. So we have to go one step further, which we call commercial policies.
And by commercial policies, what do we wonder that what we understand about that is the incentives or discounts or how we are going to negotiate your prices if your prices are negotiated into the market. And to think about that, you have to also link your commercial policy to your strategy. What I'm saying here, let's say you want to. To increment the frequency of purchases of your customers, let's say that that's important for you to increase loyalty or to have more interactions to
your customer. So can you think about an incentive that every time your customer's coming back, they're getting a better deal, a bigger discount or something like that? What can you make in terms of incentives to change customer behavior? And that's what we are going to explain how we can create. Really strategic commercial policies that can influence your customer behavior and it's going to be a win, win situation rather than just a price negotiation which is a 0 sum game.
Every dollar that I give to you, let's say that I'm the seller, you are the buyer, every dollar I give to you, I'm losing. So that's what we call a 0 sum game. It's every dollar I give you, I'm losing $1.00. So you're going to? Change that scope and try to create ways of both of us to win a win, win situation, you know, so that's the idea on commercial policies then we are going to move to price elasticity, that's a very hot topic.
So it's important for companies to understand how sensitive are their products and services in terms of price. So we are going to bring concepts like pricing power and actually we are going to show. Some methods that we use to estimate price elasticity. There are many alternatives out there. You can use variation of volume against variation of price. This is the simplest one, but we
are going to go beyond that. We are going to show some methods that we use in our projects to illustrate how you can estimate price elasticity. With that information what you can do, you can try to go towards price optimization, which is the next topic. So how can we manage a more volatile market condition really changing prices in a more frequently away. So that's the idea here to to bring the price application piece to the session as well.
We are also going to show some of the methods we use in developing our projects in that direction. And finally, we are going to mention about price implementation, governance and how you change the change management to to make. That possible, I mean people are very resistant in terms of changing behavior. They believe what they do is correct. That's the way they have been doing for a long time.
So the idea here is also to show some examples on how it can make people jump in in terms of price management or price strategic management if you will. That's the idea of the recession. Yes, sure, sure. You give us a lot there, which is great. You're going to have a very interesting jam packed session when you do visit us in Atlanta and you're covering a number of topics related to this whole concept of the complete pricing
journey. Now is it okay if I ask you specific questions, maybe one or two of about each kind of component? You mentioned best pricing strategies. Is there something similar like a best pricing strategy? Well, that's a great question. It's really depends on your business. So there is no solution that it's going to fit for every company. So the best pricing strategy I would say is the one that fits your objectives of your
business. So you have to take into consideration many aspects before you define your price strategy. Definitely you have to start with what your company is. What you are looking for? Are you the? Volume leader of your market or are you a niche player where premium price is more important for you, but that's just the basics.
And then you have to go to check very different aspects of your strategy before you say, yes, that's the right strategy for me. Another piece is that you may have different strategies for different products, for different channels, for different regions and that's the
beauty of a pricing strategy. The more fragmented you make it, the better it is. That's our strong recommendation to really go further on that, not have one, just one price strategy for the entire business or your product line. You have to segment your price strategy as well. Good, good. OK. So so just kind of having an open strategy and this, this and you know pricing strategies can work for all different industries according to yourself, which is good.
So just being intentional about building that is what's gonna help you go, in your words, beyond and go further than I would suppose the average company would. Now you also mentioned customer segmentation. How should companies segment its customers and its clients? Well, good question. I mentioned a little bit about it when I was explaining the complete pricing. Yeah, you do. But the idea here is.
To go beyond just the characteristic of your customer, like if you're thinking about the consumer, you're not just saying that's a male female that certain age, no you. Okay, you can do that, but have to go beyond that, have to think about how they relate their relationship with your company. So are they loyal customers? Are they customers that are just coming to My, My store to buy on promotion?
The same thing for the B2B site. Oh, those are distributors, those are retailers, Those are large accounts what have you. But then again inside each and every profile that you may segment, you may have different. Behaviors you may have like a very clear example, we're working with a company that one of their segments was large retailers, but inside that we have large retailers that were very loyal to the company that
we're working with. On the other side of the spectrum, we have customers that were just buying when we were making very strong discount on our products. So completely different. Buying behaviors from our company, even though they were all the same segment in terms of
characteristics of the business. So the idea here is really to understand customer behavior and you you should segment based on that and then create commercial policies for each and every segment based on their behaviors and not more towards their characteristics. That's the idea of the concept here. OK, good, OK, interesting. Now there's a lot of different components to your speaking engagement and you covered a lot of that in the when we were discussing this as our introduction.
Moving into this conversation today, I want to ask you one more question about one of the components of your speaking engagement. If they want to ask another question that's more so specifically pertaining to yourself. But before I get there, when it comes to value based pricing, is this a strategy that's supposed to work for everybody? That's a great question. I would say it's not for everyone.
It depends on how much differentiation you have when you compare it to the next best alternative in the market. So there are different steps here. The first one is do I have? Differentiation against what the marketing is offering and by the market is offering, you usually have to go to what is the next best alternative of my product or my service. And then you have to be very frank and honest and see if there is any differentiation.
If so, and if it's important, then you may be able to really capture value and go to value based pricing. Otherwise, I don't feel that that's the best way or the best pricing method for you to follow because you're going to be frustrated. You may spend a lot of time trying to to show value to the customer, but if that's not the case, it's impossible to go in that direction.
So I have seen many companies getting frustrated out of that because there's actives believe that their products were better or they were performing a little better. But if that's not the issue for the consumer or the customer if it's a B2B company? There's no value and you cannot
go into that direction. So it depends and we are going to discuss when it's, I mean when a company is able to really implement a full value based pricing approach and when it's a waste of time and money for the company to try to do so sure, Okay. So value based pricing is not one of those one fit only fit like a glove for everybody and every different company out there.
So yeah, so you're gonna have a lot of different components about the best pricing strategy, customer segmentation, value based pricing, commercial properties, price elasticity and of course price optimization approaches. So you're gonna be covering a lot of ground and you're speaking engagement your speaking session during this
fall conference. Now I want to mention this, you were with us in our spring conference when we were in Dallas, TX back in May of 2023. What are you most excited about for this upcoming conference? Well. I had a great time in Dallas. The room was full. I think they had. 40 people. I think you remember that. I was really pleasantly surprised with the audience that
we got there. I hope to see as many people as or even more people in Atlanta. What I really got excited was actually the questions that were made. People are very engaged in my session. They brought very good points. So we were able to exchange knowledge and that was really rich I think for everyone that was in the room. So I do expect to have a large audience at the end and then good discussions out of the session. So that's my expectation.
Good, good. Yeah, you were one of the more popular speakers last spring and we were very excited for you. And So what I don't see that being any different this upcoming fall for your, for your speaking engagement. So very excited to have you now. One more thing for the listeners today, if those are there are people listening who are interested in learning more about the complete pricing journey, learning more about Frederico Zornig and you know your your background, your expertise.
How can they find out, or discover you know any of your resources or just learn more about you in general? Good. Well, we have recently opened an office in the US if you want to check our website isquantisinternational.com. So in there you're going to see our contacts in the US, you have my e-mail, my phone number and you're ready to. It would be a pleasure to talk to you or some of you that want to go further with us. So sure. Thank you.
Also on social media. I think you are on LinkedIn as well. Yes, I am at on LinkedIn. My profile is F Zornig, so my first name initial and my last name. You can find me there as well. Sure Okay sounds good. Qantas International or LinkedIn? Verrico Zornig, it was a pleasure to speak with you today. Good Sir, we can't wait to see you in Atlanta, GA.
For those who are interested in the conference, you can visit our website pricessociety.com and go to the conference tab to learn more about purchasing your ticket for this, this fall, this fall gathering. Very excited for it. Until next time, you all have a very safe day. Bye, bye.