Hi everyone and welcome to another pricing podcast episode. My name is Megan Ford with the Professional Pricing Society and this is a Pricing podcast episode with a thought leader from Revenue Management Labs. We are excited to interview Mr. Avi Punwathi and the Pricing Society is also excited to bring you this content in addition to more and an attempt to connect our pricing community around the globe.
So check us out at pricingsociety.com and you can get more of our resources that are readily available to everyone around the globe to help your career further connect everyone as well as receive online pricing training and credits towards your Certified Pricing Professional designation. One more announcement before we jump into this great interview with Mr. Kunwassi. We have a fall pricing conference coming up. We are excited to welcome everyone this fall.
Virtually 2021 has been quite the year, but the Professional Pricing Society maintains a connection with our community and welcome the opportunity once again to connect thought leaders around exciting topics around four days. It's an event you do not want to miss.
For the full details and lineup and get your registration on as well With your pricing teams and taking advantage of the early bird discount, you can visit pricingsociety.com back slash Fall Conference. You will not want to miss out on this event. You can also follow the hashtag on social media which is PPSF VC21 and learn more information about our lineup, networking announcements as well as ways to download our mobile app which also keeps you up to date on all
of this pricing news. So Speaking of that pricing conference, one of our fabulous speakers is the Thought Leader, a great friend of the Pricing society, Mr. Avi Kunwasi, and we have him here today. Want to tell you a little bit about Avi? He is the founder and power and partner at Revenue Management Labs, specializing in strategic pricing implementation, and he is adept at enabling companies to make sense of their complex and diverse environments.
With over 15 years of senior revenue management experience that spanned from pricing strategy to analytics, Avi has helped clients understand how to capitalize opportunities through pricing. He holds a BBA and MB A from the Shulick School of Business at New York University and is a certified pricing professional and member of the Professional Pricing Society. Again, he is a warm friend and featured speaker. We are excited to welcome him
back in this platform. Avi will be speaking this fall around B to B pricing and inflame infla, excuse me, B to B pricing and inflationary periods and we're excited to welcome him today to this podcast episode. Hi Avi, how are you? Hey, not too bad. Thanks for having me here. Really excited to do this. Thank you so much for joining us. So tell us a little bit more
about yourself. I gave that great bio to our audience and those listening that may be unfamiliar with your thought leadership in this industry. Yeah, definitely. So thank you for that quick bio. I think the only thing I'd add is. Throughout my career, I've been on both sides. I've I've stepped in on consulting and have been on the other side. I've been pricing manager at Ford, I've been Director of Revenue Management at a BM Bev.
So I'd like to feel that I'm very familiar with the challenges that I know everyone who's on listening to this is encountering and the people issues that you're getting into, the cultural issues that you're getting into, the data issues and challenges. So have been on both sides very much and that's what revenue management labs is kind of all about, not only because the insights is one thing, but how do you take that through to execution.
I know that's where 80% of the pain and the real value is created. That's wonderful. And I know that our practitioners can absolutely relate to someone who has been on both sides. So thank you for adding that. So I've mentioned a few times that you're a friend of the Pricing Society and you've spoken at our conferences before. Tell us a little bit about your upcoming presentation this fall. And but definitely so we know that inflation has been kind of
running rampant. We're getting noise on labor going crazy and I'm sure you guys have been seeing all those posts out there that companies are looking for people and we see the cost going up incredibly supply, a lot of companies can't even get enough supply out there and store shelves are empty. Freight costs are going up and we've also got material costs that are going up, so. At the same time, there's been
inflation in the industry. Everyone's seeing their costs move up and the discussion has been around, OK, how are we going to react? How are we going to react? I'm getting calls from my customers that they need cost concessions, that their costs are going up, their margins are being squeezed, we need to price, price, price. So things are moving incredibly quickly and what this session is designed around really to give some B to B firms, some
strategies. On how to handle that and set prices intelligently with so many things moving at the same time. So we're really going to focus on four things. The first thing is refining your value quantification in the market. So this is all around making sure that you're looking at your offers through your customers eyes and capitalizing on all the value that's on the table And of course that value is going to differ based on the customer that you're looking at.
Next will be need you to do this or that, making sure that if you are giving those sessions that they're only temporary and also that there's counterparts associated to that, so you're getting customer concessions in exchange for that as well to make sure it's a bit of tit for tap. The third item is on addressing price leakages.
So make sure we're optimizing our investments in the customers and we're doubling down on things that work and we're like rationalizing things that is really unproductive to us. And then the last element, which is often the most important, is enabling that frontline sales execution. So giving them the tools or the guidance necessary to make the right decisions and hold the team accountable, that sales team accountable to actually execute that strategy in the
market. So what we're hoping is as participants block out is that they're going to have a high level blueprint on how they can start to take some immediate pricing actions within their organization. Thank you, Avi. Those are really clear takeaways and I know that our practitioners are going to benefit from that knowledge. They can put that practice to where you know and hit the ground running.
So as a both a practitioner and a thought leader, what challenges would you say people are facing or you can share your personal challenges when pricing amongst B to B and versus B to C? Yeah, it's it's funny because often in B to C it's A. It's a little bit easier because you have a ton of data. Available and this is the number one issue that we run into when we're dealing with B to B's that
we hear. The problem is I don't have the data, I don't have the syndicated data like I RI or Nielsen. I don't know what my market share is. I don't have good competitive data. Sometimes I don't even have an idea on where my prices position versus where the competitions prices position or I don't know if I'm selling it to someone, they're reselling it, what they're reselling it at. Or we don't have good win loss data from bids.
The list goes on and on and on. And it it's a challenge within B to B's on how with with operating in the state of acting, how do you go ahead and get good pricing insights on where we should need to, where we need to move there, There's tools around it. It's not a good enough excuse to say you don't have the data. So I I can't do very much. I think that's one of the main challenges is around the data. And we've seen the opposite end of it.
We've come into B to B's that have more data than they know what to do with and they're kind of in the analysis paralysis space. They're building a bunch of dashboards and reports, but not taking a bunch of actions out there, right? Not making any real traction. Exactly. The second item is that we find a unique challenge is B to B's. Sometimes it's tough to get close to the customer depending on what type of offer they're selling, how niche it is, how specialized it is.
So getting close to the buyer, understanding what they truly value, what they see as a relevant competition within your portfolio, within competitors within them doing it themselves. So thinking about how you get close to that customer in a meaningful way and not only making it a one shot. Experience, but that you have that ongoing relationship with that customer that you're pulling in that information.
But it's critical to overcome and there's lots of ways to do it. The other thing that we we challenge companies with is if you can't get close to your customer, it really calls into question the offers. That you're putting out into the market. How do you know that your offers isn't even fit what they need? And then I think the last challenge that makes B to BA little bit more or one of the complexities that we here with B to B is that B to B often has lots of offers.
We're talking 10s of thousands of different products or services that they're pricing out and it's neat. One customer's buying this and this other customer's buying this and this product hasn't been sold for five years, but we've got an offer for it right now. So there's a lot of complexity that comes along with that and how you manage that complexity in a structured manner. So you're not kind of doing that one off 1 by 1.
So there's there's a lot of challenges in B to B, but I think the key thing is whenever there's challenges, there's a tons of upward opportunity around it as well. And that's a great point. And Speaking of we've heard a lot about the popularity of cost based pricing and B to B. So why do you think people are gravitating more towards that?
I think there's a couple things. One, we we know that 60% of organizations that try to implement a revenue management function with within the first two years, they actually don't hit the growth targets that they have. They have this aspiration around. And why do companies gravitate towards cost based pricing? You've got a ton of offers, there's a ton of complexity. I don't have data. I'm not close to my customer.
So it's easy, right? It's easy if if we've got a good finance team that's doing activity based costing and we can kind of cost out what goes to each product or to each service, I can take a price. I can put a margin on it and we can run that math really quickly. It's quick and it's easy. That's why companies gravitate towards it. The only problem and you're always well hopefully, you're always sure kind of knock on wind that you're covering your cost with it as well.
So you've got that, you're locking in your profit.
It's funny because we run into a lot of companies that have cost based pricing in place, but somehow they're still managing to lose money on it. But the problem is, is that with this cost based pricing kind of needle gazing, right, it does up in terms of how you're receiving a truck in the back end of your dock and how many people it takes for the value you're creating for your customer at the at the end of the day has nothing to do with your value in the market.
What the cost of copper's doing has nothing to do with what kind of bearing you're putting out there and the machine it's kind of going into. So you're always going to be overpriced or underpriced within the market because you're not focused on the customer. Also it's starts to focus the organization on how do I get better. That predicting costs, how do we get better at attributing costs? So how much time does someone spend on this customer versus
that customer or how much time? How much resources did we actually consume for this customer? When? It should really be the opposite way around and going external and then moving internal. How do they see us? Where do we create value for them, which is really the critical aspect and it gets you away from how do we get smarter at predicting all these commodities or labor or freight that we're always going to be playing catch up on great points.
Well, knowing the gaps within cost based pricing, how would you advise B to B businesses transition to value pricing or what are your best thoughts there? That's a really big question and I think there's some preconditions. Firstly, the organizational has, you have to have some cross functional alignment in that. This is going to be a team sport if we're going to value based
pricing. Sales team, your marketing team, your finance team, your OPS team, they have to be working together because you're going to start to move towards more of an insight based organization. And how do we take these consumer insights that we're getting from all elements from our customer service team, from our warranty team and bring that to leverage on how we're creating value. Secondly, you need to have executive buy in.
If the executives aren't behind you on this and the C-Suite and aren't going to reinforce the messaging, it's going to be a real tough battle on when you when you get to execution with that executive buy in, it's translating into that customer first mentality and data-driven decision making. Every decision you're going to make is always going to have three Proms. One you're going to be looking at. What does this mean for my customer or how is my customer see this?
Number two, how would I see this from a competitive standpoint? And #3 from a financial standpoint? Does this make sense for us? So you're always going to have these three elements that you're looking at. Some of the other preconditions, just you know you're going to have to have people that have the proper skills to do this work. You're going to have to have clear processes in place. And along with that clear process, you're going to have accountability around this whole
thing. So what's going on with our budgeting, our planning, our targets, our compensation. So it's really heavy, but a lot of it is the people and the culture and getting getting that up and running in the buy in. So that that's kind of critical to getting this started. Excellent points of you, that's X, those are excellent points. And then it's the great teaser for people to learn more when they come to our fall conference and to follow you on LinkedIn
too. I'm sure you share your more of your thought leadership there, your thoughts there. One of my final questions for you. Thank you for your time today. Are there standard tools or methods to help your sales force focus on value selling and not price negotiation? Very specific. Yeah, fair. You know what? It's funny when we talk about things that people are uncomfortable to talk about. People would rather talk about sex than their salary, right? Cuz it's more comfortable.
And sales people are the exact same way more. It was around 70% of sales people when they were tested. They're uncomfortable when they talk. When the discussion goes to money or pricing, they get very uncomfortable. And it's even natural In our own personal lives, we try to avoid those discussions around money.
So it's. It's natural for them when those discussions come up, I mean, even you know in your relationship when you're talking about who's going to pay for what, you don't want to have that discussion. So you make it go away as quickly as possible. And what that ends up with is price concessions or commitments because the customer is going to ask for what they want.
You want to maintain your relationship and you're going to give in. So where you need to go towards is you not need to start thinking about making sure.
As a pricing team or revenue management team, make sure you know what value you have, how that, what value you're creating for the customer #2. You need to have a templated way that the sales team can deliver that and it has to be a consistent message, because if you don't have a consistent message for your large sales team, they're going to find their own things that they want to deliver. I kind of assess you say, these three points.
But you honestly need to give them a script and almost needs to be templated into joint business plans for customers that's, you know, you have them going in there on 1/4 on a quarterly basis. And that they're presenting the 360 of the offer, not just, hey, I'm here to show you what your pricing is. Here's your one pager and then it goes straight back to price, and they're kind of back on their heels and they're not in a good space to negotiate.
The other thing is, which is really underserved or underutilized is often we go in and we say, hey, this is the price. You can't give anything back. But we know there's going to be discussion. You need to develop playbooks on what, hey, you're going to get this, this is allowed. This is not allowed. If they ask for this, this is what you need to ask for and this will be allowed, not allowed. So that is so templated out there.
That you're not getting surprised and you're never gonna get any of these commitments that are made to customers. Because it's funny, I've been in so many discussions where sales people have come back and said, sorry, we're locked. Now I made that, I made that concession or I had to make a decision on the spot cuz they were offering me this. But if you have that all templated out, it's a much
different discussion. That you're having with the sales team, you're walking them through that, you're helping them think of objections. You're training them on it. And if they have issues on how that decision tree works, you're having that discussion in advance. It's not happening on the tail end and you're really arming them. I think the key is, is that your sales team, they're busy and they're focused on selling more. You're trying to get your tons of pricing initiatives executed?
You need to make sure that you've got the proper game plan in the proper place so you can get it executed. Because if you leave it in their hands, they have the best interests of the company at heart. They also have their best interests at heart too. But it's not necessarily going to go the way that you want it to go. So it's critical that you focus and you really have that implementation plan because that really is 80% of where the rubber is going to hit the road
at the end of the day. Now that it was such a gem for all business, businesses and industries, I really, I even wrote a note about that one. You got to prepare to avoid and limit those surprises. That's key, Avi. That's excellent work that you shared. We want to thank you for your time today. Any final thoughts before we share with our listeners how we can better connect with you after this episode airs? I want to thank you guys for being here and listening.
Please feel free connect with me on link Revenue Management Labs website at revenueml.com. We've got a ton of content there and a lot of it's on the PPS website too. We're really excited to be participating. Thank you so much, Avi. We want to thank you for your continued partnership and we're going to leave all of that contact information in the description bar as well as we'll have access for that for contacting you on our social media pages as well. We can't wait to feature you
this fall. Thank you again. It's going to be an exciting time. In October, all of our listeners again, you can visit pricingsociety.com to register for our fall pricing conference. It is a virtual event open to everyone around the world. And of course, Mr. Avi Pumwassi will have a featured workshop. So we're excited. Thank you so very much, Avi. Thank you. We'll see you in October. Take care. See you in October.