Implementing pricing research HD 1080p

Summary

In 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

00:00

📈 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.

05:02

🔍 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.

10:05

🛠️ 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.

Keywords

💡Pricing Research

Pricing research is a subcategory of market research specifically aimed at understanding how much customers are willing to pay for a product or service. In the video, it is emphasized that when done correctly, pricing research can lead to increased profitability, growth, and market share. The script mentions that this research uncovers data on customer purchase decisions, influences on those decisions, and price points that significantly affect sales volume.

💡Price Whisperer

The 'Price Whisperer' is a nickname for the speaker, Phos, who is an expert in pricing strategies and has written a book by the same title. The term suggests a deep understanding of pricing dynamics and the ability to communicate this knowledge effectively, which is central to the video's theme of implementing pricing research results.

💡Marketplace

The marketplace refers to the environment where buyers and sellers interact to exchange goods and services. The script discusses how pricing research helps companies understand the marketplace's willingness to pay, which is crucial for strategic pricing decisions.

💡Willingness to Pay

Willingness to pay denotes the maximum amount a customer is prepared to pay for a product or service. The video script highlights that pricing research identifies this willingness, which is pivotal for setting prices that maximize both sales and profits.

💡Price Walls

Price walls are psychological barriers where small increases in price can lead to significant drops in demand. The script explains that identifying these walls is part of pricing research, helping companies to set prices that avoid drastic sales declines.

💡Sales Volume

Sales volume refers to the number of units of a product or service sold over a period. The video emphasizes the importance of predicting sales volume at different price points to make informed pricing decisions that balance volume with profitability.

💡Profitability

Profitability is the ability of a company to generate profit. The script mentions that pricing research should predict not only sales volume but also profitability at different prices, helping companies choose between maximizing sales, revenue, or profits.

💡Actionable Information

Actionable information is data that can be directly used to make decisions or take actions. The video stresses that pricing research should result in actionable information that can be turned into specific business strategies or plans.

💡Business Experience

Business experience refers to the practical knowledge and skills gained from working in a business context. The script argues that interpreting pricing research requires individuals with business experience to translate data into meaningful strategies for a company.

💡Change

Change in the context of the video refers to the company's willingness to adapt its strategies based on new insights from pricing research. The speaker emphasizes that companies must be open to change to benefit from the research findings.

💡Gap Analysis

Gap analysis is the process of identifying differences between current performance and desired performance. In the script, it is mentioned as a tool to compare a company's perception of the market with actual market data from pricing research, highlighting discrepancies that need to be addressed.

💡Training Material

Training material in the video refers to the educational resources developed to teach employees about the findings from pricing research and how to act on them. The speaker suggests that such materials are necessary to ensure that customer-facing staff understand and can leverage the insights from the research.

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.