All right. Well, hello and thank you again for joining me for another episode of the professional pricing Society podcast. My name is Terrance and we have a Duo today to help us discuss the topic of optimizing pricing through sales activation. Now, before I introduce these gentlemen, I want to remind all of our listeners that we will be in Dallas, Texas, this upcoming May the 34th annual spring pricing and workshop. Conference will be taking place
May 2nd through the 5th. It is definitely a conference. You won't want to miss and to learn more about that conference. And also to register, you can feel free to visit our website at pricing Society.com our
speakers. Today will also be in attendance for that conference as they look to spearhead the discussion of optimizing pricing through sales activation with today's today, being the teaser, if you will, Pete Morelli is a vice president at holding advisors and leads the company's sales Consulting practice. He helps organizations again Clarity around the value of they provide with sales and negotiation strategies to win more deals at higher.
Is Pete joins us with over 20 years of experience and procurement cells and pricing transformation and deal and coaching Adnan. Akbar, is a senior director of pricing at holding advisors and is responsible for helping clients grow by realizing their full potential of their offerings. Prior to joining the hold invite
holding advisers. He spent the last 12 years of his career focused on the growth initiatives within Fortune, 500 companies including building pricing organizations service offering development and sales strategy. Gentlemen, how are we doing today doing well? Thanks. Terrence paid to be here. Good, I'm glad to have you guys. Yep, it's better to be here for
sure. Said to have you guys here on this podcast, and also excited to see you guys in May for your Workshop. But let's go ahead and dive right into today's discussion about optimizing pricing through cells Activation. So, you know, let me go ahead and ask the first question and you both can feel free to chime in or however you want to respond to these questions.
Why do price you need a workshop on opt As in price through cells Activation. So little bit of kind of background on this one because we put some thought into the scope of the workshop. And this was in part building upon the workshop that Pete and I conducted about a year ago in Chicago where we walked attendees through, a lot of the required analyses to do to really find out some of the gaps. In in pricing.
So, we call that a root cause analysis workshop and the general theme of that was we as organizations have a very significant amount of data, whether that's transactional data, whether that's usage data, whether that's customer data, Etc, that can point to different problems. So then the question becomes, how do you put that all together in a useful? Way that gives you a sense of where there is pricing opportunity. So it's again, very heavy for heavily focused on data so we
wanted to build on that. Game of for this Workshop to say, okay, now that we have a sense of what the pricing should be, how do we operationalize that within an organization and more specifically, how do we kind of bridge that gap between say prices and and sales to be effective in price realization? So that's the theme of this Workshop to say. Okay, now that we are now that we have a price. Now what what are the things that we can do to make this price roll outfits? Peaceful.
Yeah. And just to build on that. I mean, as prices we know how much effort we put into both the art and the science of creating that right price and all of the infrastructure around that and the architecture of the price Model itself. But that confidence, and then vision for how a price should be realized in a business is not shared equally by all team members and this partnership between pricing and sales is such a critical price, piece of
the puzzle to move from that. Set price to get price. Okay, good, that's very interesting. Now, let me ask you this, if pricing teams seem to be doing their job correctly, what functions are falling short at the moment. Well, I think if you were to ask folks in the companies we work with, you would get different answers and it would almost sound like everybody has an
opportunity to improve for. So, for example, you might have product teams that look for Or different research and insights from the marketing team. Whereas the marketing team might not know of the product teams roadmaps and what they should be kind of putting out in the marketplace. Whereas sales might think list prices are too high, too low or too high, too. Out of line with competitive
pressures. They face and and yeah pricing teams might say well sales gets too much, discount Authority. So I think there's actually a lot of a lot of opportunity there where everyone can kind of improve a little bit, but it's more about understanding that it is. Someone falling short. I love this question. I was hoping he was going to call somebody out. It's so so this one it's really interesting to me because of the level of Market volatility that that we're seeing, right?
Like I find that determining what the right price is, is really toughen environment, right? Inflation is is at play and it varies by sector and I think the reality is That it's really hard for prices to arrive at price. It's really hard for businesses to know how much they should be paying for things and when you kind of pick up inflation apart on a sector-by-sector basis, right? It's even more. It can be even, even more
volatile. So from a producer's perspective, you do all this work to assess what that price should be. And then a seller has to go out and position that price to their customers. But the reality is particularly in B2B environment when sellers are going out Auditioning, what are often price increases to their customers? Their customers are facing a lot of headwinds to because their organizations costs have gone up and, you know, budgets are being cut.
So then the question is, how do they take this information and communicate it in an environment that hell's all this volatility and and all this uncertainty. So getting back to the question, right? Which functions are falling short. I think it's exactly what peaches said where, you know, it's not necessarily a single organization. Ian, but there is what we think significant opportunity in the short term to come up with strategies to communicate price and value in these
conversations. And we want to walk our audiences through some really kind of effective ways that we've seen that happen in the market. Yeah. So it sounds like it's a collaborative effort, you know, it's not just on one team or even two teams. It could be a an entire organization coming together to assess the process and essentially come up with a final solution when it comes to the
pricing realm. Now, look the value to price process should be familiar to most prized sirs but what where are the areas where sales and pricing see the world differently? Yeah, I'll take this one off. I mean, I think there's some fundamental differences and how prices and sales team, see the world.
If we just think through a flow that, you know, a lot of prices would be familiar with from kind of what's your top level price strategy, you might have the prices think, prophets are K, whereas the sales team or is often dissented on volume, and they'll just think about making that sale for Revenue. So that's one area as you move towards value. You can think about the pricing team trying to quantify Defy that value to share equitably in a in a price and that's very
quantitative mindset. Whereas the sales team might think qualitative relationships and then as you get more towards the pricing, you know, you kind of think of the, the rule-based nuances and different packages at the pricing Team sets, whereas the, the sales team wants a very simple, go to market structures, they can think about it and communicate it efficiently. And then finally, when you think, you know the price Getting motion. How do we actually realize these prices?
That the pricing team is often taking a portfolio View and thinking about will take some losses with the winds to protect the price and the target. The segment's, we really want, whereas, that, that seller takes a very account, their world specific point of view, about hate losing this deal. Just means a lot to me, even though if it means last in the grand scheme of things to her portfolio. So you really have to think about those different nuances.
Has about how they see the world to try to come to some compromise. Yeah, I think there's there's benefit on both sides, right? If I'll preiser put some effort and said puts themselves in a salesperson shoes, meaning now that I have this price change, what is it specifically that I would say in a customer conversation to position this price change, right? There's absolute benefit in doing that because that's going to start to bridge that that Chasm. And then the inverse is also
true. Are a seller puts himself in an Enterprise, your shoes where they are managing, what the product or service should be valued at. It is a fair value. So then the question is, how do we position that in the marketplace now that we know the fair value? So a big part of this equation is making sure that you have that fair value, right? Then you can defend it in all parts of the organization.
Not just pricing, not Just sales, but anyone within your organization, you could be customer service functions, it could be account management function. So, you know, that's in part. What I really like about pricing is that it just touches so many different areas of, of organizations. We talk about pricing and sales often because it's in many ways a world we live in but it certainly can be broader than that. Sure, absolutely, okay. That's interesting.
You made a point about, you know, understanding the fair value, you know, given those different perspectives you guys just described. What what can we do to increase the effectiveness of? Pricing sales partnership moving forward. Yeah. I would say the first thing is you have to establish a common set of beliefs that both Chrysler's and sellers can agree on. So, this is about, what is the value that our company is actually provide to the
marketplace. So when we think about conducting value research, whether that's quantitative survey oriented, or qualitative interview oriented kind of Methodist, you really want to understand why what'd you do do is worth by anshel dollars to your end customers and it pricing and sales can agree on this.
That forms the foundation of how you can have a conversation about, why these are good prices, why you should as a salesperson be confident and communicating the value of those services and products to the marketplace. And really, this is pricing 101 stuff, but when you have those value anchor points established, you can make your gift, get
trade-offs. And Form, the groundwork for conducting, those negotiation conversations all the way to the end of that, you know, get price at the Spectrum. Look at this one through the lens of a recent project that we were on where we had a client and they had what was a highly differentiated product? It was one of those situations where the value of this thing was head significantly. Increased as a result of covid because it enabled some remote operations. You know there are certain
sectors where that did occur. So what happened was they realize if this mean that this was highly differentiated and they priced at what they thought was a fair value is on the higher end. So sales went out started to sell this thing and you know in 2020 had some level of success but then as things changed and you know we're getting back into
a sense of normalcy. Well, you wasn't quite there but it was still pretty highly differentiated point being that what happened was they were priced too high and they were having a lot of trouble positioning this in the
marketplace. And when we started to pick this apart and look internally at their data, we saw that their realized price for the sales that they were getting was, you know, drastically lower than their list price right into the realm of maybe 30, 40 percent and then, you know, we started talking to the folks internally and they said, yeah, this is we're just not able to sell this. Thing. It's causing a lot of friction in the organization. It's going through reviews.
There's like multiple management multiple layers of management had to be involved. So they can put this in the marketplace and they can get these discounts approved. So, what we did is we said, okay, let's take a step back. Let's figure out what the actual value is today in today's economic environment, and then recommend a list products. So then we came up with a list price and then said, okay, if you saw it at this price what's there's a few things going to
happen. One is All this kind of internal effort and friction is going to be eliminated because this is actual right price. You're not gonna have to go through this. Discounting process to your volume is going to increase because you're not going to customers that are going to frown at this initial price that you had proposed. So you're going to get
incremental volume. And by the way, we have verified this with with customers and then third and perhaps most importantly is your actual realize price is going to go up because this excessive discounting You're having for the deals that are closing or going to decrease. So just kind of in example of why, knowing the value is so important in a sales conversation, because in this scenario, right? We recommended a lower list price, but the ultimate result was a higher realized price.
Do the factors that I just mentioned? Mmm. That's really interesting actually. Okay, that's good. Now that's all one. That's a whole process of analyzing and evaluating that. Situation is that is that type of situation, common. Sure. I'd say, yeah, it varies but certainly get all. All flavors, I'm sure Pete can speak to some situations where that's happened. Yeah, I was gonna say without even getting another specific example.
I think that the fundamental truth about value-based pricing is that sometimes he absolutely go in and partner with the client and you find those areas of opportunity where the value aligned price is a price increase. And that means good. Things for the revenue but there's also those kind of hard truth situations where when you do the research and the value is actually lower than they expected and their prices at aligned with the marketplace in
the wrong direction. You have to deliver that that news also and say you know, maybe the potential of this particular product or service is not what you thought it was going to be. But the way you can best leverage at or realize it is to set a value align the price that maybe lower them, the price that they went in with and and that's kind of a Hindsight lesson learned that you got to get the pricing teams involved sooner especially for new product
Innovations npi's because you may have priced it wrong from the get-go and then he kind of got a upside-down product at the end of the day. Wow. Okay good to hear good news, that's a nugget from myself and I'm sure it's a nugget for the listeners as well. Now you might have touched on this as well before but just for clarity, you know, but when it comes to the relationship between prices and sellers, how can prices Help sellers, use that value Foundation to defend those prices.
Simplicity is it's got to be very straightforward any type of communication that goes out in the marketplace you know as somebody that enjoys data likes to kind of put together an Excel document and be very comprehensive. What I've started to realize is that any type of a sales conversation has to be focused on value, and that value message has to be succinct. Meaning, you know, it's got to be in that elevator pitch type of a format. It's that combination of Art and Science on.
How do you position that value in a very crisp succinct way that anybody can understand it. So that's, that's one of the key things that I like to hone in on. Yeah, I think that that's great. And then the other one I think can be a lot of pressures will think about the basic blocking and tackling that they do in the course of a pricing project or effort is you know, building in those packages that are tiered
or your good better best. So you give That's sales team options to pitch a lower value product or service to a budget constraint customer and or defend the price. When a given customer asked for that discount, you can say sure. But we have to take away this item of value. So, just being thoughtful about how you construct your pricing. Those kind of 101 level components, the pricing project
actually bear fruit. When you can communicate them clearly to a salesperson and why, That optionality is there for them and that kind of helps them establish their give guests and trade-offs for the negotiation and build those fences to protect the value that you try to defend as as a pricing team. Okay, okay, good. Now, you guys really discussed necessary tools. If you will, what you both mention. Is there a certain way to go about positioning this to the
sales team that they can find? It useful? There's a range of things that come into play. For sure, you know, we've Incorporated several of them and think some of which Pete had mentioned, where you want to have these set of what we call give gets in your back pocket because inevitably you're going to go to a customer and they're going to ask for some type of a price concession. So when asked for Price, concession, you have to be well
equipped to know. Sure I can make a price concession but you're doing it in exchange for something so that it's reflective of the values out. Price, concession, you're going to take with value in, in some way. That's something that we often use and, you know, building on that a little bit further, it's a matter of knowing the competitive market well, so that you can build out what we call flanking product.
So, for example, if there's a situation where, you know, getting back to what I said earlier, where there's a highly differentiated product, but that customer for whatever reason, perhaps doesn't have the budget to pay, or they don't necessarily need, say the cattle. That version of the product for their specific business, that's okay. You just have to go in and from a product perspective figure out what is needed. How do you create a lower priced lower value version of that
product? So that sales teams can go out there and more effectively defend pricing, you know, there's a slew of other tools that that come into play that really depend on the applicability of certain business situations. Yeah, I'm getting a key enabler for any of those things. Add Just tipped through is to bring the sales team in earlier in that pricing process, then most prices are typically accustomed to. So it's not only, hey, what do you seen in the marketplace?
But if you can establish that by in earlier with, hey, here's why we're recommending these prices and the structure you're going to have better adoption and confidence flowing through to the commercial end. Okay. Understood understood. Now is there any additional advice you would give to Give to someone with your experience working with B2B clients. I think probably just in.
We think about this pricing sales partnership is to necessary components of almost every monetization model, particularly in B2B Industries where you have some sort of seller initiated or completed process, you know, pricing and some of the associated activities that are also informed by, you know, product teams and marketing teams. They help generally aggregate information and Market Intel to both set prices and the direction.
But sales, can't simply be an execution function to negotiate with customers. They really need to be bought in and just as confident and that price. And in fact, Seven teams are often the best Devil's Advocate so you can get because they'll Echo your customer objections, effectively verbatim. So you're going to get that
truth to some degree. As sometimes people say, sellers are overly pessimistic or friendly with customers, but I think if you want to really get what that other side of the table will say, salespeople, your best Advocate there. So, when you get them on board and probably sitting next to you at the desk, to work on a problem rather than across, The table, I think the results could really be pretty stunning.
I love that. Yeah, that collaboration is absolutely key and, you know, that kind of Builds on a lot of what I was going to say where it's just super important to be laser focused on what is going to move needle within the
organization. So from a pricing perspective, we've seen teams that get pulled in a lot of different directions whether that be reporting or whether that be, you know, getting pulled into the the cost side of things which, which matter Her. But at the same time, you have to prioritize in such a way that is going to drive profitability and pulls the organization together really around the differentiated value of what they have. And when that is at the center of pricing and sales activities,
that's what we see. A lot of success. Okay, all right. Well, Hey, listen, Pete Morelli. And I like Barbie, I want to thank you so much again for your time speaking with me today. Now for our listeners, of course, want to remind you while they will be with us, in May at our spring conference leading their workshop there.
Now, for the inquiring minds pmf Adnan, where can listeners go to find out more information about yourselves holding advisors or any other resource for material Pretty easy to find. You can just get a hold of the advisors.com and I are both on and Linkedin and we both have we have a hefty presence with our company, in terms of thought, leadership and blog posts and podcasts ourselves that are posted you that channel. So and finally, you know, at PBS will have a booth will be at a
workshop. We've got a keynote for our founder of read holdin that he's presenting. So, we'll, we'll see a lot of the team on site in Dallas. Okay. Sounds great. Well, thank you all so much again for listening and we will see you all in Dallas. Have a good one. Bye, bye.