All right, good evening. And thank you all for tuning in to another episode of the professional. Pricing Society podcast. My name is Terrence and we do have another great episode in store for you. All today pricing thought leader. /. Shall first, we'll be taking the time to discuss with us. Holistic approaches to pricing which are also thoughts from his latest book. The price, whisper a holistic approach to pricing power /. How you doing today?
I'm very well Terrence and I'm happy to be on the epidural, be on the show. I hope is going to be not only informative but also entertaining a little bit from for the audience and for you too. So I'm looking forward to the conversation. Good, let's dive right into it. Go ahead and tell us a bit about your background and really what the pricing power means to you as it pertains to your career. Yeah.
They so the story here and and I think this is important for the context is that I Um, first of all II got the, the moniker the pricing power because people started to call me the price whisper and and and because I got a wacky name. I decided to adopt it, you know. So the story here is that I ran a couple of companies in Europe. Before I moved here to the US and came here to establish a no no division were fairly large public company. And and, and and then I had
another for CEO positions. And in all of these instances, we did experiments with pricing. Some of those experiments were very successful, others were complete Duds and most of them were simply in inconclusive, right? And what I mean with having a successful pricing experiment, meant that the next quarter revenues would be up like 25%. And, and, and, and We couldn't, we couldn't understand why some of those experiments worked in others, didn't.
And what I had learned in business school and what I could read about pricing was so theoretical and so academic that it, it, it was really useless information. So, 15 years ago when I decided I was too old and too opinionated to to be Hired Gun. It was time for me to set up my own company and take that interest in pricing that I had and a process to make every pricing experiment that success. And and, and that is what we do in my company.
And it is all about, providing our clients, a methodology to gain pricing power and pricing. Power is a term that was coined by Warren Buffett and and and and he said that the most important Criterion for in investing. In a company is whether they have pricing power and he then continued to say that and pricing power is the ability to increase prices and not lose sales volume. And that's the Holy Grail e. Yeah, that makes perfect sense. Okay, so we think about the term pricing power.
How does a holistic approach tie into that? What is a holistic approach to mean? And, well, the the we have to look at pricing. Power is is something that a company earns, right? You cannot just increase prices and believe that. It's It's going to work, right? Sometimes if you're well on the price, yes, you can. But many times not.
And what I mean with the the learning learning the the the right to have pricing power is about understanding how everything that you your do in your company, affect your Pricing power or lack thereof. And that means that the way you target your customers effects effects, your pricing power because you do want to Target your customers that has a higher willingness to pay and therefore support higher prices then
another customer segment, right? So you need to know what your customer segments are willing to pay. You can focus on the most desirable one, you need to know how the features and functions of your product or your service affects what people are willing to pay for it, right? And if you if you know what they're willing to pay, you can make sure that you have the best product to Market fit.
You can make sure that you in your promotion and in your marketing, you're using the The features and functions that support higher prices, then other features functions and benefits, right? Likewise you need to understand your marketing. What marketing channels, what marketing messages, what marketing, methodologies leads to attract potential customers that has a higher willingness to pay than other marketing channels?
Less than other messages, the other methodologies and the same with sales and and again you need to understand what sales channels and sales methodologies and so forth. Leads to a higher higher, willingness to pay, and who the customers are, who have that higher willingness to pay again, supporting higher prices. And finally, you also need to know again the, the how to stratify your pricing in such a way that it minimizes sales friction.
And, and submit maximize your revenues and your profitability. Ability, or possibly or your sales volume, if that's important for you, but profits are more important than sales. Volume. Sure. So unless you understand, and this is, the holistic view. Understand customer segmentation understand product to Market fit, understand marketing, understand sales and understand pricing strategy all together. Means that you can Elevate companies to really to the next level.
We're not talking about a few percent here. And there, we talk about doubling sales volume right with all doubling revenue or more, right? So it's it's it's transformative for a company completely transformative. That doesn't mean it doesn't mean that you should not Do some of the other stuff that that is also important like sales transaction and houses and price
waterfalls and shorts. But the problem with all of those is that they are backward-looking, you know, if you do the the take that holistic projects forward looking so so. And like I said, it transformed companies. Yeah, absolutely. So you just listed a number of different components that companies can use to gain this holistic approach to possessing pricing power. One of the things you mentioned was honing in on the customers that have the willingness to pay
a little bit more. Now, how does a company, how can they measure the trust, you know behind that or or the result behind companies that are consumers that are willing to pay more? Well, he's actually not only consumers, it's the it's the same in business to business, you know, We think we do rational buying decisions, especially in business-to-business.
What? We not, you know, all purchase decisions are emotional, you know, John and then we put rationale on top of it to justify the decision for ourselves. So, I mentioned that when I started up my own company here, they the the I developed a methodology to That makes every pricing experiment a success, and this is to understand how all of these variables, affects willingness to pay, and, therefore, affects how you can
price. And there are many in this is done in in online, polling of a Marketplace, and that could be a B2B Marketplace for. It, could be a consumer Marketplace and the methodologies that are out, there are not good enough. So so we developed our Our own and we also developed our own AI software that analyzes the data we capture from from from the market. And is it Dependable? Well, I have 700 more than 700 customers, they said, yeah, it worked perfectly, right?
And I'm customers, it says things, you know, things like yeah, pair, you helped us. 10x our company helped us 5x. Our company, you helped us increase Revenue with four hundred percent, right? Yeah. I got a unsolicited email from a customer couple of weeks ago and it was a screenshot from his accounting system and I could see that his his his sales volume with down a few percent, and his margin was up 49%, right? Yeah. And his message was very short.
He said less work more money. Many thanks - that's awesome now. Now, how should a company Implement these learnings from willingness to pay research? Well, I think you're bringing up something that is very important. And first of all, it needs to Um, the process is that needs to be implementing need to come from the top of the company. It needs to come from from really, from the CEO, or certainly the sea level.
If it's a, if it's a very large company but it's all every company have sort of a gut feeling about the market. They have a gut feeling of corporate gut, feeling of why people buy, why don't buy what they're willing to pay and so forth, you know, and if the company has Salespeople. They have a gut feeling that is is they are being grind down, right? Because they here day in and day out that your product or your service is not as good as competition. And it's more expensive, right?
So, the, the most important thing is that the company organizes Training programs, because everybody who's in sales know the the the the proverb buyer liar, right? So, don't believe when you're trying to sell something to somebody, don't believe what they say, don't believe what their willingness to pay is because some some of these buyers will lie outright some will simply withhold information and some wood Will be truthfully truthful, of course.
But for sales people to hear that day in and day out, they get grind down. So they need to understand what Companies or what their clients really are willing to pay marketing needs to understand. They need to be trained on understand what channels and messages really support that higher willingness to pay and support higher prices, you know, product management. Need to know what feature functions and benefits that supports higher prices than other feature functions of benefits.
And, and And the same, you know, same with the, you know, the sales organization, you know, the need to know, not only what customers are willing to pay, but what they're willing to pay more for, right? And, and obviously, there is a, there's a lot, a lot of discussions and we talk about value pricing, right? Well, unless you understand from the market, what they value, it's just It's work.
Mmm, you know if you as a company try to figure out what value your product or service gives a company. It's you know you can make assumptions and assumptions is a is a is is another word for guessing it. Maybe a maybe an educated guess but it's still a guess, right? And and he instead if you measure what people actually say they're willing to pay, you have how they value that product or service and it's not guessing anymore, right? So he's saying that's a survey. Did you guys surveys?
Yeah online. Surveys. Yeah. Okay. Okay. And people say one of the questions I get very often is how can we trust it result? You know, how can we trust that you talk to the right people? And again, we have device to process that. That that in a very sneaky way, disqualifies people who we don't want to talk to because obviously garbage in garbage out. Yep. Yep. And and when we do these these projects we often disqualify 95 to 98% of people who starts a
survey. Wow. Okay. Because we want to talk to the right people. Yeah, yeah. And and, and And and then we have our animation that are AI software called predicted demand analysis, or predicted, sales analysis. And we in that, we can see how people answer the survey we can see if they lying and the software can assess. If they lying there, the their data could kicked out and not used for the analysis.
Wow. Yeah, well that's that's that's amazing coming from, you know, you guys develop your own software. Yes. Be able to detect these type of things and be able to, you know, have this type of Insider knowledge to be able to share to others this amazing. But but remember I started to say that it all came from my experience running companies, right? And and from my very early interest in pricing and pricing mistakes.
I did, you know, but the very first company I II established in Ran we priced ourselves really low mmm. And I sold through a channel and and eventually I realized that they were marking up our product to the Yahoo, you know. So they were making lots of money on our product that was Innovative and so forth. And And and we were struggling because we were pricing ourselves too low. We didn't have enough profits, to be honest, you know? So so that was one of the mistakes I did, you know?
And, and, and then we did the other experiments that worked really well. You know, that one one I remember was this is what professional the electronics and we went to a trade show and the, the, the everybody said you should not Prices on your products on the trade show, we put prices on our product on a trade show and and and and I people coming up to me saying that I thought I'd never afford this product but now I can see, I clearly can. Mmm. Yeah, just being upright and
honest with with them. Yeah, correct. Yeah. And and I remember when, when I moved here, then to the state's the, the said I stabbed his and ran a Division of a fairly large public company and also professional electronics. And we develop the product and the CEO of the company said we're going to price. This is at 1,100 bucks, right? Just I don't think they're
right. Yeah and I said no it's going to be 3800 and and you know we don't know how much it was some of that I think over two year period period. Did we sold about 40 45 million or that? Wow, that's amazing. Yeah, so and that was really from scratch, you know. So but you can imagine having having a fifteen percent margin versus having a 400 percent margin made it. A little bit of difference on
the bottom line. Absolutely, I'm sure any company in their right mind would you know love to have those type of numbers and you know, regarding their increase so as a pertains to You just recently had a book your latest book price. Whisper a holistic approach to pricing power. You go over these different components to possessing a holistic approach. Yes, I do. Yes for companies. Okay. So, yeah, even more about your about your book.
Well, I'll tell you the, the I've done a lot of white papers and articles and all different, all different Publications. So I've been published in Forbes and ink and New York Times and all different, you know, Financial Times all different Publications like that. And, and and so, I thought to myself that I should have a book, right?
And I sure I said, well, why don't I take all these white papers and all these articles and and just put it in a big document and write some glue around it, right? It didn't work that way. It didn't work that way. I had to, I had to read, I mean I had to rewrite just about everything in the in the book and and but it goes into a lot of detail on exactly what I've been talking about here.
And how you how a company can gain that holistic, approach, and and how how how it can leverage leverage a better understanding. One of the markets willingness to pay segmented in the way I've described here for you to elevate themselves to elevate the company, to the next level. And we're getting a lot of our business from private Equity groups or rather the portfolio, companies to private Equity
groups. And I don't know if the audience know much about private Equity that they typically by companies. Or buy a very large chunk or majority of a company and and and and they they then they sort of turn them around. And what they typically say is that they call something the whole time means they want to turn around the company and then hold the company for between three to five years and then sell it at a profit. And I have private Equity Group saying that well, pair you lower
the whole time. From five years to a year and a half so thank you very much. Wow. You know you have you have plenty of proof that your strategies and methodologies have been working very well. Oh yeah, I spoke to the CEO of a company. We worked for in a very niche market. We worked for them with a project, this spring and he basically said well pair Our pricing saved our rear behind this year. Sure, you know, and, and so, he's happy and he's one of these private Equity Group own
company. So so he's about to exit that and stop the the next Journey to the next. Next private Equity Group Company. Awesome, well, bear. I want to thank you so much for your time today sharing your knowledge will insights about pricing power and hold it. Approaches, can you please share with us where viewers and listeners can retrieve any of your materials or resources? Yeah. The the absolute best way is simply to just do a Google search for the price. Whisper, you'll find me.
You'll find my company. You'll find my YouTube channel. You find lots of the publication's. I've done, you will also find a company called red fin that It had a had a service to value your house, that they also called the price whisper, but but that's the easiest way to find me. You can also go to my last name, show force.com go. You can do go to the price whispered about me and that also finds me so.
All right, so you have a month and I would encourage people to go to Amazon and get my book because it's it's gotten the tremendous feedback from from people who read it. So, Okay, awesome. If you are somebody, that's looking to get, get more from your information about holistic approaches, the pricing power. I want to encourage you all to please look into purchasing, mr. Chauffeurs latest book, the price whisper a holistic approach to pricing power, outside of that thing is so much good.
Surfer spending time to speak with me today about your your latest book and of course your expertise in the field. So I appreciate that. Thank you so much sirens, and I hope this was good for you and I hope Hope it was good for the listeners. Thank you so much. Absolutely.