Speech Topics
Customers Love Us … Now What?
“Take what you want, God said to man, and pay for it.” (Spanish proverb)
If you want to understand how successful organisations sustain their edge over time, look beyond their ability to understand and serve customers and study how they turn insights into income. Firms ultimately exist to create value for customers and revenue for themselves, yet many business leaders obsess over the first of these tasks and treat the second as a tactical afterthought. In reality, generating revenue is as much about creativity and strategy as it is about dollars and cents, and the decisions one takes educate and stimulate a market as much as they mark the value of a sale. In this session, I talk broadly about the “mission” of prices and pricing and lay out an intuitive, four-step framework to improve this basic skill. I also address common challenges, such as the impact of the digital revolution and the delicate relationship between prices and brands. Getting all of this right unlocks surprising opportunities to capture value – and even grow it.
Talking the Talk and Walking the Walk
“The buck stops here.” (Harry Truman)
Technology is rewriting the rules of commerce. In our era of mobile and cloud computing, the internet of things, advanced analytics and micro transactions, enhanced transparency is putting pressure on organisations to profit from the actual value they provide, not from what they make. Today, accountability is no longer a fashionable marketing slogan, but a strategic imperative. Customers and governments demand it: they struggle to understand what their money buys them, and technology empowers them to challenge the promises that businesses make. In this session, which draws from my book with Oded Koenigsberg, The ‘Ends’ Game: How Smart Companies Stop Selling Products and Start Delivering Value, I use examples from sectors as diverse and consequential as healthcare, automotive, education, media, aviation and mining to map the gradual but relentless evolution of markets to the point where money flows to proof rather than promises. The session helps organisations to not only grasp the fundamental challenges of this shift, but also transform what is essentially economic waste into tangible value that market players can appropriate.
How Technology Shapes Your Revenue Potential
Advances in technology can affect every corner of a business … including how it makes money. As such, it is important to understand the origin and nature of the improvements and, importantly, how best to exploit them. This session explains that, when it comes to generating revenue, new technologies typically impact one or more of these dimensions: transparency, scale and rationality. Failure to understand how these forces affect your environment virtually guarantees that you are not profiting from customers to the extent that is possible. Importantly, it also signals that you are exposing the organisation to serious threats.
How to Price Anything
“There are two fools for every market: one asks for too little, the other for too much.” (Russian proverb)
Every business has to price what it sells. It is inescapable, yet deeply misunderstood. Most organisations have the right intuition: know your costs, track the prices of competitors, understand what customers want and value, and agree on the broader corporate goals. However, the problem often lies in juggling this information and combining it with sufficient confidence. In this session, I recommend that organisations follow three steps: scope, set, and tweak. I draw several lessons, but three stand out. First, pricing anything is a balancing act between looking inside and outside of the organisation for direction. Second, the dominant ingredient is always the same: appreciating how one’s offering is unique and meaningful in the eyes of customers. Third, management must question how the processes of creating and capturing value in a market feed into each other. Decoupling the two can cause organisations to act incongruently, which over time puts sustained financial and brand health in jeopardy.
Selling Value to Customers
“A cynic is a man who knows the price of everything and the value of nothing.” (Oscar Wilde)
At the heart of every proper selling strategy lies the need to communicate value to customers and defend one’s price. Indeed, I subscribe to the belief that price is seldom a problem when the value of an offering is clearly understood by sellers and buyers alike. This session discusses the complications that often arise when an organisation tries to sell value in a market plagued by customers who, strategically or otherwise, are skeptical. To remedy the situation, I lay out a roadmap of five clear actions. There are two major conclusions. The first is that a better understanding of what value means to customers – and how firms can be true to their promises – gives a sense of calibration and confidence that helps fight off the pressure imposed by clients and competitors. The second is that organisations that “stay calm and sell value” see immediate returns, followed by sustained growth and profitability. This roadmap, therefore, is a recipe to capitalise on value creation, particularly in markets where innovation and creativity is fast-paced and expensive.
Cookies, Fences and Bids: Making Prices Personal
“The worst form of inequality is to try to make unequal things equal.” (Aristotle)
Not all customers are created equal. Certain groups find more satisfaction in a given product than others do. A smart professional spots this and realizes that pushing the same price across the market is inefficient: in some cases it leaves a good chunk of money in the pockets of customers, in other cases it prevents sales that would still be profitable at some lower price. This session explores the fascinating challenge of tailoring prices to individual valuations. One lesson is that proper price discrimination requires some input from customers – the traditional “take-it-or-leave-it” approach is not sufficient because it is the customer who ultimately decides whether something is cheap or otherwise. Second, while there are many forms of discrimination, they fall into one of three buckets: observation, choice or mechanism. The session presents several examples to explain these labels and suggests an action plan.
Prices, Pricing and Society
“A business that makes nothing but money is a poor business.” (Henry Ford)
The role of business in society is often criticised, and prices are at the centre of the debate. The first goal of this session is to clarify the broader implications of the pricing policies of organisations. Typically, prices impact access to the market and the norms and expectations that customers hold about a trade. Prices also guide attention and dictate what customers do (or avoid doing). The second goal is to take these insights and lay the foundations for a revenue strategy that is at once profitable and responsible.
The Discounting of Things
“A cheap price is a shortcut to being cheated.” (Chinese proverb)
Discounting is often likened to a potent, dangerous drug. Many businesses “give it a try” heeding to external pressure. The immediate bump in sales is rewarding, but the drop that follows stings even more. As time goes by, the concessions get deeper and more frequent to satisfy customers who are increasingly habituated to receiving offers. One interesting aspect is that this downward spiral is mostly predictable, which begs the questions: Are organizations discounting intelligently? Is there a healthier way to entice customers without mortgaging one’s brand? This session provides answers and a useful checklist. First, we have to understand that discounting is not synonymous with “tactics.” Quite the opposite, the strongest sign of a clever campaign is its ability to serve the broader objectives of the business. Second, there are steps that managers can take to ensure that their investments in temporary price concessions are, indeed, investments. The overarching goal is to put an end to the familiar “can’t live with it, can’t live without it” feeling associated with discounting.
It Takes Three to Tango
“There is no victory at bargain basement prices.” (Dwight D. Eisenhower)
How can you stop a costly price war or, better still, avoid one altogether? What does it take to become a price leader? These questions are pertinent in many markets, and the answers lie in understanding that the “fight” unfolds on three fronts. First, part of the blame certainly rests on the actions of the rival, and your task here is to influence behavior by sending unequivocal, credible, and legal signals. However, price is not the weapon of choice unless there are enough customers in the market who demand it. As such, you must also mitigate customer habituation—the “commodity mindset.” Finally, you may be unaware or too proud to see that your actions trigger a response from the rival. This cannot persist. This double session uses different means to present these perspectives on competition and suggests ways to gain the upper hand.
Anchors, Nudges and Charms: Mastering the Weird Psychology of Price
“Human behavior flows from three main sources: desire, emotion and knowledge.” (Plato)
Perceptions of value are not only measurable, but also malleable. Indeed, customer preferences are not as clear and stable as classical economic thinking predicates. Rather, one’s needs and wants can shift across situations and time in ways that researchers in psychology and sociology have been mapping for years – and that business leaders are only now starting to grasp. This session helps audiences understand how the nuances of human thought and behaviour influences even the most mechanical of pricing decisions. I detail some of the popular anchors, nudges and charms at the disposal of organisations interested in motivating and empowering customers. As I explain, it is a critical, differentiating ability for any business plagued with customers who appear disinterested in any argument other than a low price.
Asking About Price
“If you have to ask how much it costs, you can’t afford it.” (John Pierpont Morgan)
The customer’s perception of value is the ultimate arbiter of price. It needs to be measured carefully. Generally, managers can estimate willingness-to-pay from past or real-time market transactions, or from surveys or experiments that depict hypothetical purchases. All else equal, the manager prefers the first approach because it is consequential—lying to the researcher is costly. But reality forces trade-offs. For example, gathering information on market transactions can burn precious resources, and the data may be noisy. This session provides a critical overview of the manager’s toolbox, discuss the merits of the more popular methods and acknowledge the obstacles that are likely to surface when data are translated into practical insights.
A Better Harvest
“The only person who likes change is a wet baby.” (Mark Twain)
What are the key levers to pull within the organisation that chases a better revenue strategy? Clearly, the first issue is one of attitude: there are certain myths about prices and pricing that must be spotted and eliminated. Next come the basics, including agreeing on objectives, obsessing over customers and what they value, and adopting the right scope. Third, implementing the key frameworks. Fourth, understanding and monitoring progress with the proper diagnostic tool. Fifth, the question of structure, as management needs to decide how far down the organisation to push responsibility and how many different functions to involve. Clearly, there is no “one-size-fits-all” solution. Sixth, people and incentives. What is the ideal job description? What is the beast way to compensate those responsible for the “health” of prices in the market? Last, management has to appreciate and exploit the impact that technology can have on the way organisations turn value into revenue.
