Implementing pricing research HD 1080p
Summary
TLDRIn this video, Phos, the 'Price Whisperer,' discusses the importance of pricing research, a market research subcategory, for understanding customers' willingness to pay. He emphasizes the necessity of turning research data into actionable insights, requiring business experience. Phos stresses the need for companies to embrace change based on new findings and the importance of training employees to act on these insights. He concludes by highlighting the potential for significant growth and profitability when pricing research is effectively implemented.
Takeaways
- 📚 Pricing research is a critical subcategory of market research aimed at understanding customer willingness to pay for a product or service.
- 📈 Correctly executed pricing research can lead to increased profitability, growth, and market share for a company.
- 📊 The research provides valuable data on customer purchase decisions, influences on those decisions, and buyer profiles, including psychological price points.
- 💡 Pricing research should not only predict sales volume at different prices but also forecast revenue and profits to guide strategic business decisions.
- 🛠️ It's essential for the research to be actionable and include interpretations that are relevant to the company's specific circumstances.
- 👨💼 Business experience is vital in turning research data into actionable insights and plans, as mere data summaries are not enough.
- 🔍 Each pricing research project uncovers new insights, requiring companies to be open to embracing and acting on this new information.
- 🔄 Companies must be willing to change their strategies and operations based on the findings from pricing research.
- 🏢 Resistance to change is common in companies, so it's crucial to bridge the gap between market realities and company perceptions through training.
- 👥 Training should be ongoing and include role-play to prepare customer-facing staff for real-world interactions and to reduce the gaps in market understanding.
- 🔄 Regular updates to pricing research are necessary as markets evolve, and companies implementing its findings are effectively reshaping their market.
Q & A
What is the primary purpose of pricing research?
-Pricing research aims to understand what the marketplace is willing to pay for a company's product or service, which, when done correctly, can help increase prices, profitability, and market share.
What are the key outcomes of effective pricing research?
-Effective pricing research provides data on customer purchase decisions, influences on those decisions, buyer profiles, willingness to pay, and identifies price walls and psychological price points.
Why is it important to have business experience when interpreting pricing research data?
-Having business experience is crucial because it allows for the transformation of raw data into actionable insights and plans tailored to a company's specific circumstances.
What does the term 'buyer liar' refer to in the context of pricing research?
-The term 'buyer liar' refers to the tendency of customers to be untruthful or withhold information when asked about their purchasing decisions, which can lead to a skewed perception of the market by companies.
Why is it necessary for a company to be willing to change after conducting pricing research?
-A company must be willing to change because new information from the marketplace may require strategic adjustments. If a company is not open to change, the research will not yield actionable results.
How can a company ensure that the insights from pricing research are implemented?
-A company can ensure implementation by creating training material based on the research findings, training customer-facing personnel, and establishing a process to monitor and follow up on the application of these insights.
What role does training play in the implementation of pricing research?
-Training is essential to prepare employees, especially those in customer-facing roles, to understand and act on the findings from pricing research. It helps bridge the gap between market insights and company actions.
Why is it important to understand non-buyers in addition to current customers during pricing research?
-Understanding non-buyers is crucial because market growth often comes from converting non-customers. Their motivations and barriers to purchase can provide valuable insights for strategic pricing and marketing decisions.
How often should a company repeat its pricing research?
-Pricing research should be repeated periodically, such as every year, two years, or three years, depending on market dynamics and the company's turnover, to account for changes in the market and the effectiveness of implemented strategies.
What are the potential benefits of acting on pricing research for a company?
-Acting on pricing research can lead to significant growth, such as doubling in size over a few years, becoming a market leader, and improving the company's financial performance and shareholder value.
Why might conducting pricing research be a waste of resources for some companies?
-Conducting pricing research can be a waste if a company is not willing to embrace the changes suggested by the research findings, as it requires adaptation and implementation of new strategies.
Outlines
📈 Implementing Pricing Research Insights
Phos, the Price Whisperer, introduces the concept of pricing research as a subset of market research aimed at understanding customer willingness to pay for a company's products or services. He emphasizes the importance of correctly interpreting the data gathered from pricing research to increase profitability, growth, and market share. Phos stresses the necessity of having business experience to transform research data into actionable information and plans. He also highlights the need for companies to be prepared to embrace new findings and adapt their strategies accordingly.
🔍 Embracing Change Through Pricing Research
In this paragraph, Phos discusses the importance of companies being open to change as a result of pricing research. He points out that new insights can lead to significant shifts in business strategy. Phos suggests conducting internal company research alongside market research to identify gaps in understanding between the company's perception and the actual market dynamics. He also addresses the challenge of 'buyer liars,' where customers may not provide accurate information about their purchasing decisions. Phos argues for the necessity of training materials and regular training sessions for employees, especially those in customer-facing roles, to bridge these gaps and adapt to market realities.
🛠️ Continuous Learning and Implementation
Phos concludes by stressing the continuous nature of market changes and the need for ongoing training and updates in company practices. He advocates for role-playing exercises during training to prepare employees for real-world scenarios. Phos also highlights the importance of regular follow-ups and updates to pricing research to ensure that companies stay aligned with market developments. He shares examples of companies that have doubled in size by acting on pricing research findings and encourages viewers to consider whether their companies are ready to embrace change for significant growth.
Mindmap
Keywords
💡Pricing Research
💡Price Whisperer
💡Marketplace
💡Willingness to Pay
💡Price Walls
💡Sales Volume
💡Profitability
💡Actionable Information
💡Business Experience
💡Change
💡Gap Analysis
💡Training Material
Highlights
Pricing research is a subcategory of market research aimed at understanding what the marketplace is willing to pay for a company's product or service.
Correctly done pricing research can increase prices, profitability, and market share.
Pricing research provides data on customer purchase decisions, influences on those decisions, and buyer profiles.
Identifying price walls and psychological price points where small price changes affect sales volume is crucial.
Predicting sales volume and revenue at different prices is important for strategic decision-making.
Pricing research should include variables that are actionable and relevant to a company's specific situation.
Pricing research requires analysis by individuals with business experience to turn data into actionable information.
Pricing research will always reveal new insights, requiring companies to be prepared to embrace change.
Companies need to be willing to change based on new information from pricing research.
The output of pricing research must be actionable, business-oriented, and relevant to the company's situation.
Companies are often resistant to change, which can be a barrier to implementing pricing research findings.
Understanding the gap between what the market says and what the company thinks about the market is essential.
The concept of 'buyer liar' suggests that customers may not be truthful when surveyed about their purchasing decisions.
It's important to understand what drives non-buyers, as growth often comes from converting non-customers.
Gap analysis should be turned into training material for relevant people within the organization.
Training, including role play, is necessary for customer-facing staff to understand and mitigate gaps in market understanding.
Training should be repeated periodically to account for market changes and company turnover.
There needs to be a process to ensure that recommendations from pricing research are implemented.
Acting on pricing research can lead to significant growth, such as doubling in size over a few years.
If a company is not willing to change, it should not conduct pricing research as it would be a waste of resources.
Embracing change through pricing research can improve not only financial outcomes but also the company culture.
Transcripts
- So, who am I?
Well, my name is Phos.
I'm called the Price Whisperer,
and I'm involved in a lot of business organizations.
And of course I have my new book out there called The
Price Whisperer as well.
Hi there. In this episode I want to talk about how
to implement the result of pricing research.
So let's first just define what is pricing research?
Well, pricing research is a subcategory of market research,
and it's specifically done to understand
a com, the what the marketplace
to a company are willing to pay
for their product or service.
And pricing research, when is done correctly, will
allow the company to often increase prices
and make it more, more profitable and,
and increase growth and market share all at the same time.
And obviously I've been talking about
that in many other videos, so I'm not gonna cover that here.
But how do you implement this?
Well, first
and foremost, when you do this, this, this pricing research,
it's absolutely crucial that the,
that the, the, the, the result.
I mean, you get a lot of data, right? A lot of data.
And again, if the, if the research is done correctly, you,
you, you get a lot of data on how customers in a, in a,
in a company's marketplace make their purchase decision
decisions, I should say, how,
what influences those decisions
and the various profiles of various buyers
and, and, and so forth.
And of course, willingness to pay and,
and specifically identification of price walls and,
and which has psychological price points
where small price changes generate significant
change in sales volume.
And not only, not only predicting
sales volume at different prices,
but also predicting revenue
and profits at different prices is obviously very important
because many, many times a company can make a choice,
either select to use
to focus its operation on, on maximizing sales volume,
which is the right strategic choice in, in some cases
or in other cases, focus on profitability
or focus on, on on revenue
because those are the
right strategic choices for the particular company.
And of course this
is, this
- Is so, so the, the pricing research need to include
those, those variables.
Otherwise it's kind of useless
and it's also often useless if
whoever looks at the data created in the research
doesn't have actual business experience.
It's not good enough to have a, some kind of
research analyst look at the data and, and,
and in a summary of some sort say, this is
what the data says.
Because that is not for a company particularly
actionable what the, what what data says is
it's just data to be really valuable.
It has to include what it means
and what it means for the particular company in their
particular circumstance.
And, and in order to do that, it's absolutely necessary
to have people with business experience to,
to, to take that data created in,
in pricing research and,
and make it into actionable information
and action plans, right?
So, so, so, so that's the first thing to consider when,
when, when looking at implementing pricing research, right?
The, the, the other thing to consider is
that pricing research will always discover new things
every time a company do one
of these pricing research projects.
Some of the, some of the variables that,
that are being discovered is, is, okay, I kind of knew that,
but now it's good to know from hard data
and other, other information points are,
I had no idea about this.
This is a, a complete revelation. I did not know, right?
And, and,
and that happens every time that just,
just every, every time.
So pricing research will, will discover things
that the company didn't really know.
And that means that the company needs to be prepared to
embrace this new information.
The company needs to be prepared and willing to, to change
because the company is going to get
new valuable information from its marketplace
that it didn't know before, right?
And, and, and,
and if you didn't know it, you didn't act on it.
Now you know it, and you have to act on it.
And, and, and,
and that is the same thing as, as it,
it requires change, right?
So, so
- If the company is not willing to change,
there's no point in doing pricing research, right?
Because it, it's, it's, it's going to, you know,
the research is gonna end up as a stack
of paper somewhere propping up the CEO's door or, or, or,
or something to that ilk, right?
That's probably not what you've done.
What, what you want after you are spending whatever money
you're spending on the pricing research, right?
So, so it's very important that the, the,
the output of the research is actionable,
that is business oriented and, and,
and that is that it is relevant
to the particular company's situation.
Right? Now,
companies are typically rather resistant to change.
And I'm saying companies here,
what I'm really talking about is the individuals who are
working in a company all the way from the CEO down, right?
They, they, they, they have their routines, they do
what they always done, and, and it,
and change is hard, right?
So, so how do you, how do you make sure
that the company is willing to, to, to make that change?
Well, first of all, what you do is not,
not only do you do your pricing research and,
and the pricing research, like I said, it would say the,
this is the market's willingness to pay.
This is what drives the purchase desire.
This is what drives, this is
what influenced the purchase desire and so forth.
But then you want to administer a version of
that same project to the company itself, right?
To become a another source of,
of, of information.
So on one end, you had have, this is what the markets say,
what the market, what drives the market and so forth.
And this is what the company thinks about the market.
And there's always gaps, always, always gaps.
And one reason why it's always, always gaps is
that it's very hard for a, for a company
to really understand its, its market
because there's a term called buyer liar, right?
So you talk to your, your, your, your customers.
And some of them, some of them would simply
be untruthful when you're trying to understand why they,
they, they bought and why, you know, and, and,
and certainly most
of them would withhold some level of information.
And, and, and that means that companies typically get a,
a slightly skewed perception of the marketplace.
The other thing of course, is that talking
to customers is good, but those are already customers.
The growth is gonna come from those
who are non-customers or non-buyers.
So it's actually more important to understand
what drives those non-buyers than
what drives the buyers, right?
And, and ideally, of course, you wanna serve both,
both these, these groups of people.
So you have this gap analysis, what the,
what the market says,
and this is what we think about the market.
And, and, and that then needs
to be turned into training material, right?
And for, for, for, for relevant people within,
within the organization, certainly those
who are customer facing needs to be, be aware
of these gaps
and be trained on how these gaps can,
can be, can be
mitigated, can be reduced.
There are always gonna be gaps.
The question is how big are these gaps?
And, and so,
so training material training is absolutely necessary,
especially for these customer facing people.
Like obviously sales people,
like marketing people like customer support
or customer service people,
but also for those who do product development or,
or those who do service definitions
because it's in
necessary for the, for, for these folks to really know the,
really know the, the what drives the market
better than, than they typically do today, right?
And so, and training obviously is, is important
and it always need to include a, a level of, of
a level of, of, of role play.
Very uncomfortable for most people,
but it's actually, we know it's, it, it is very important.
You wanna, you want to train
to deliver whatever value, description
and train on understanding the, the, the,
the, the, the market on, on people
who are not potential customers, right?
You wanna make, make your mistakes
where it doesn't matter, right?
And, and then of course the, this training needs
to be followed up.
You can't do it once, right?
You have to do it maybe every six months, maybe every year,
maybe every three months.
It depends on your company, depends on the, the, the,
the kind of turnover you have and,
and, and all different things.
But it needs to be done.
And because every market also changes,
no, if nothing else, every market changes
because when you are starting
to implement in your company the recommendation
of the pricing research,
- You are changing the market.
And because you are changing the market,
the pricing research need to be redone at some point, right?
Again, within a year, within two years,
within three years, something like that.
So, and, and, and then of course there need to be a process.
There need to be a process to make sure that
these recommendations that is found in,
in pricing research are actually implemented.
That, that the people
that are trained are actually action
the way they should do on, on the training and so forth.
So it's a, it is a very involved process,
but it, it, it gives tremendous feedback and,
and not feedback, but results, right?
And it's not unusual to find companies that
conducted pricing research
and then acted on it to double in size over a couple
of years, right?
They, they may have had flat sales for, for, for years
and years or nearly flat sales for years, and,
and suddenly, suddenly can, they can double in size.
Suddenly maybe they become the market leader, right?
So anyway, that's all I have to say.
Pricing research when you acted on is involved,
but it, it, it deals tremendous results.
So think about that.
And most importantly,
think about whether your company is willing
to change or not.
Because if it's not, don't do the research.
It's a waste of time, it's a waste of money,
it's a waste of resources.
But if you can embrace change for real, then,
then it will have tremendous results,
not only in in revenue, profits, and shareholder value,
but it actually will make the company a
better place to work for.
Right? Alright, thank you so much for your time
and I hope you enjoyed this little video
and I'm looking forward to see you on the next one.
Thanks.
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