Episode 80 Nov 01, 2023

Pricing Should Be at the Heart of Your Organization

Profitability and customer experience are important. That’s about as noncontroversial a statement as you can make in B2B. So, pricing – which is perhaps the biggest driver of both – should be at the heart of every B2B company, right?

“That is quite a controversial statement whenever I make it,” said Karan Sood, pricing expert and today’s guest on B2B Reimagined. “When I show people my spider chart of how pricing is the heart of the organization, some people are very supportive and some people are like, ‘You're smoking something.’ But I do believe pricing is at the heart of the organization.”

Karan and host Barrett Thompson examine the distance between pricing’s theoretical strategic value and the reality - its common lack of organizational influence - through the lens of four pricing paradoxes:

Pricing should be considered first in a new campaign or product launch, but it often comes last. Pricing teams should be forward-looking, but most toil in the past (last quarter’s profitability, what went wrong?). Pricing should lead the organization in data-driven capabilities, but it’s usually one of the last adopters. Pricing should have visibility to the C-suite, but it’s relegated to the back office.

Listen as we diagnose the reasons behind these disconnects and prescribe immediate actions pricing leaders can take to expand their influence, based on real-world examples.

Follow Karan Sood on LinkedIn

Featuring
Karan Sood

Karan Sood

Influence is not made overnight or with a magic spreadsheet. No, influence is made over time where you make one decision after another. Where you listen to other people, where they can actually recognize you, and then can be an advocate for pricing and for yourself and for the organization. And that's the way it should be.
- Karan Sood

Episode Transcript

Karan Sood: Try not to do everything yourself. And I think that's a problem we can run into in pricing. Because we feel like we need to do the data analytics. We need to figure out the finance piece. We need to figure out the forecasting, the supply chain piece. I'm like, no, the more you take on for yourself, the more you'll set yourself up for failure and surprising things.

So you need to be able to leverage the other teams to basically get their perspective and dependencies from them, and then put it together and that's why you need influence more than anything else.

Barrett Thompson: Hello everyone. My name is Barrett Thompson. I'm the General Manager of Commercial Excellence at Zilliant, and I'll be your host for our podcast.

I'm joined today by Karan Sood. Karan is a pricing expert who has been responsible for overseeing more than 6 billion dollars in revenue across a diverse set of industries over the past decade. Through this experience he has gained a deep understanding of the critical role that pricing plays in business success. Karan, welcome to B2B Reimagined.

Karan Sood: Hi Barrett. Thanks for having me. It's a pleasure.

Barrett Thompson: Karan, would you share a little bit more about your professional background with our audience?

Karan Sood: I have been in pricing for almost 15 years. I'm one of those people who actually started in pricing and stayed in pricing.

Unlike a lot of people who come from different places and then they end up in pricing. I've been in pricing for 15 years. I worked in a different industry that worked with GM in automotives. I worked with [00:02:00] Mitsubishi in automotive and parts pricing. I then worked with Yellow Pages selling digital media and print entries for almost six years, pricing for them.

And then currently I am the director of sales operations at Rakuten Kobo. So I'm responsible for pricing strategy, discounting strategy and channel strategy for almost everywhere we sell globally.

Yeah, so I've been fortunate enough to work in pricing for all these years and gained a lot of insights working with different personalities, different execs, different products in different industries. So it helped me shape my experience where it is now.

Barrett Thompson: Well, it's very diverse and very relevant for our audience.

So appreciate you sharing that. That's the professional side. Hey, let me ask, just before we get into our content, Karan, is there anything else you might want to tell me, like maybe a hidden talent or something that you have, something that. [00:03:00] maybe they don't see it in the workplace, but maybe it comes out weekends or nights.

Karan Sood: I, every now and then, I play the guitar and you can see if you see it in the video, you see it's at the back right there. It's the Les Paul LP 100. You know, every now and then when I get a chance, I do play, but I don't play enough.

I would like to play more, but between, you know, work and everything else that goes on. I can do barely enough.

Barrett Thompson: Do you play in front of an audience or do you play just for your own entertainment?

Karan Sood: I play for my own entertainment and if it ever is an audience, it has to be really small where the word doesn't get out.

Barrett Thompson: Well, thanks for sharing that and maybe next time we talk we'll hear that you've actually expanded it a little bit and brought in a small audience and I'm sure people would enjoy it. They enjoy hearing you. Today, I wanted to focus on some things that we've seen in [00:04:00] pricing that honestly, I think they're somewhat paradoxical.

I mean, as you mentioned, you've got a deep experience in pricing. And when I chat with others who spent time in pricing, we might agree on theoretically how pricing should be at the heart of the business and what we'd look and see what's really happening in many of the practices across companies that were familiar with the certain contradictions sort of stand out, don't they?

And so I'd appreciate your help Karan to identify. What some of those paradoxes are and what companies can do about them. So just to get started there, would you take a shot at explaining why you believe pricing should be at the heart of the B2B business?

Karan Sood: Yeah. And that's, you know, that is quite a controversial statement whenever I make it and when I show people sort of my spider chart, that's kind of how pricing is the heart of the organization.

It's, you know, seems to get two sorts of, you know, two different [00:05:00] types of responses. Some people are, you know, like very supportive and some people are like, yeah, you gotta be smoking something. But I do believe pricing is the heart of the organization. Because remember, pricing, you need a product, right?

And product requires a need, right? So, and that can only be made when you, I mean, someone in pricing actually quantifies how much people would pay for that. So like, for example, if you said, Hey, we want to create a product. So you go and figure out, will people pay for the product? And if they will pay for the product, how much will they, how much are they willing to pay for the product?

And then you build that product accordingly with that number in mind. And that's how pricing works with product, right? And then someone makes the product and then it goes to sales and we have to work with sales to figure out what the selling strategy is going to be. You know, where are we going to sell it?

You know, what's going to be some, the general strategy was going to be the price when you get to the nuanced illustrating prices for customers. And then [00:06:00] you've got to work with the supply and supply chain to figure out what's your forecasting going to be, and that's a function of price. Then you work with finance to define your cost and everything else.

That's again, comes back into the same conversation of price cost conversation. Then you talk to marketing and you have a product, you have a need, you have a customer. And now you've got to figure out the communication and value strategy and the value communication, and that's when you work with marketing.

You got, you always have legal, almost everything that we do in pricing from a commercial finance point of view has a term and conditions and, you know, theorems associated with pricing. So you're always working with legal to define that and to fine tune them or reduce them or figure out if you can do something within the bounds of your contracts.

So there's that, and you know, and then you have customer success. You know, you want to make sure that your product is successful. So that at renewal time, you can get, you know, you can get the maximum out of it. So, you know, the only thing that's left is HR and I feel you got to work [00:07:00] with HR to define your talent in terms of what you need, what your needs are for your organization, from a talent point of view and pricing, you require analytics, you require pricing strategy, someone who has a more deeper pricing strategy experience, you know, what, so you're, you'll be working with them at some point.

So I don't think so. I've left a team out there that doesn't have a connection with pricing and it's very unique to pricing. And that's why people in pricing have to work very cross collaboratively with different orgs in the building to figure out where they all live. And that's where it also rubs a lot of people because it comes with some sort of a territorial fights sometimes, because you know, you're pricing and finance, I'm going to control this part.

You can control this part. So it happens, that's the nature of the beast in pricing. So, so that's why pricing is that centric.

Barrett Thompson: I share that point of view, but I want to compare it, you know, to the reality I see so often and get your perspective. So one thing you mentioned was, [00:08:00] shouldn't we start first with a problem we'll solve in the market and what the market would pay to have a solution and then work backward to find a product that we can manufacture at a cost that allows us to hit that price and make a margin for ourselves.

But often I, so that's saying pricing, the pricing would come first and then you'd back into the product that you can build at that price point. But I think so much of B2B as by this stage in their evolution is kind of the other way around, isn't it? Most people who come into pricing, they get handed a product catalog of 10,000 products already exist.

They've been around for decades and they're simply asked to go forward and make a price that fits the product. They didn't make the product to fit the price. What's your point of view on why is that backward or what you might do to turn it around if it is backward inside your organization?

Karan Sood: I think being backward is the norm.

I think that's the norm. I think that's how most B2B orgs work. In fact, I would even say some, a lot of B2B to B2C orgs [00:09:00] sort of function the same way that they have this backwards. And I think that comes back to a fundamental problem that's wrong. There is, I think, there's a lack of pricing visibility in the organization and you know, what the team should be working on.

And that usually happens because I feel the exact support doesn't exist for the function. You hardly see, at least in Canada, for example, we hardly see it. I can count on, you know, two hands how many VPs of pricing that I've ever met in my life. And until we have that growth at the executive level could drive that change that, Hey pricing. Okay, let's figure out this first before we do start making the product. It doesn't happen because product is incentivized to make the product. They have a schedule, they have a certain way, the product has to go out there and live by a certain point, and they are compensated on that, right? They're compensated.

Their incentive is to create the product out there. So they will always [00:10:00] try and get that out there and move along, but it's only, and you see this in SaaS industry, like, like woke up to pricing and monetization, like during the pandemic when the money supply, Oh, this just can't be a paper valuation. It has to make money.

There has to be cashflow coming in. So they got it all backwards as well. Right. And the reason for that is again, they made the product. When I, you know, and they want to catch the user, they want to catch everyone, but they forgot that the fundamental heart of that whole process is pricing and able to capture value.

And then you have, you know, when you don't focus on that, you get into that problem where monetization took a backseat. And now I'm glad it's taking a little bit of, you know, if getting more recognized that, okay, I need to figure out monetization and what models, you know, how we're going to make money.

Right. So I think that's fundamentally comes down to executive level support for that function and companies not understanding where pricing sort of needs to sit in the organization, not at the back, not in the trunk of [00:11:00] the car, but near the driving seat in the front. So while they're working on the product, they need to be at the front somewhere.

Barrett Thompson: That's an important distinction, right? Between how it is handled and how it could so much better be handled. And I agree with you, it needs to be much closer to the front. And we need to be thinking about the pricing, not as an afterthought, you know, once you discover it's not making money or it's not monetized correctly, that's kind of the latest, that's a late time to try and come back and reverse engineer the offering and try and figure out how to monetize it.

You want to start with that in mind.

Karan Sood: I'll tell you, I've been in an organization where... Everything was done, product is made, it's been produced, it's just sitting in the warehouse and someone comes to me and says, Hey Karan, did you look at this product? It may be pricing for like six different customers.

And I'm like, this doesn't even work. The economics doesn't work for that customer. I, we'll be selling this at a loss for, I don't know for how many months [00:12:00] and what strategy are we going to be driving in these channels? And this is a large organization make these errors because the bigger you get, the smaller the pricing team gets in the organization.

So. It's you know, this was not surprising, so this happened.

Barrett Thompson: Recently, Karan, I was taking a look at your excellent newsletter, your pricing newsletter, and I saw an idea there that resonated with me. And I'll characterize it this way. And then I'll share the paradox I've seen that pricing should be forward looking, right?

It should be helping us chart a course into the future for profitability, for growth, you know, for success of the organization, but what I see most often is that pricing actually spends a lot of time backward looking, sort of reporting out on where we've been. This is what happened last quarter and last month.

And I know there's some utility in that. I'm not saying we would never look at those metrics, but I just don't get the sense that many pricing practices are really [00:13:00] forward looking and taking the business to a direction seems like they're more reacting to and reporting on some place that they were dragged against their will, perhaps.

And so I just want to get your point of view with that. Do you find that pricing practice is more often defending themselves or defending why profitability is what it is instead of taking proactive steps to make it be what it should be? What do you see?

Karan Sood: Yeah, absolutely. I think that's a very common theme.

So I used to work with someone who used to, whenever this came up, or whenever we're analyzing something in the rear view mirror, he used to say the same one, same thing. He used to say, Hey, you can't be a Monday morning quarterback for a game that happened Sunday. So that was his thing. And it makes sense.

It makes sense because if you look at it, the whole process in org is set up that way to look at what happened in the past, what happened in Q1, what happened in Q2, what happened in Q3, and you know, and looking at transaction [00:14:00] data on things that have already happened, the entire pricing strategy sort of sit on looking at, hey, look at the transaction data, what's happening in the credit.

But that is all backwards. That is all backwards. That already happened. And if you are in for any organization, even right now, if you are looking at transactional data from Q1 to Q3. It's like Q4, your sales guys that probably already sold most of what they need to sell in Q4, probably even selling into Q1 and Q2 next year in some organizations where the demand cycle is this long.

And in those organizations, it's done. Decisions are logged. You basically bought your product. You basically made, signed contracts. So if you haven't at this point, look at that forward looking pricing strategy or what's changing in the market. Then you're probably really playing catchup come Q1 and Q2.

And it's almost important to not just look at like, like your prices. You got to look at the entire market. Where is the market headed? [00:15:00] What's happening in the entire industry because maybe there's a new competitor out there that basically is, maybe they're low volume in the market, or maybe they've come out with a new product.

You know, so comparative intel is very important in this space. In our, and in any space, you need to know what your competition is doing day in, day out, sort of figure out the next move and that next move can define what you're going to do in the next couple of quarters. Well, you know, I think we need to spend a lot of time on predictive on what's going to happen on predictive analytics to make you say what's going to happen in the future as well.

And to figure out what's, you know, what to do, how the market is changing and look at the transactional prior history data. But make that as one of the things that you're looking at and not the only thing that you're looking at, because if you, that's the only thing you're going to miss out on happening.

If maybe your costs are increasing or your, or suppliers changing, something's going to happen in the market where you will be blindsided.

Barrett Thompson: Yeah [00:16:00] I think that makes sense. And recently I've had a few more customers, in fact, saying. I've got future looking forecast information.

It might be a forecast on commodity costs. It might be a forecast on supply demand, you know, looking out several quarters. And they're asking, how can I use that in setting my prices today? And it ties into this phenomenon that you said, and I just want to call it out. For many businesses, given the cycle time between Selling or pursuing the sale and then fulfillment of the sale when it's going to show up, you know, on invoices and then get into the monthly and quarterly financial activities and decisions we're doing right now are locking in.

The profit and revenue outcomes that we're going to see maybe one or two quarters from now. So that's why we have to be thinking ahead. You can't wait until you get into that quarter and expect to do anything about it. The activities that preceded it have already set the course for that. So that's so important to keep in mind.

[00:17:00]

Karan Sood: Absolutely. And I'll add an example there, right? Like, so commodity prices are increasing and you know, they're going to lift, you know, that your commodity to whatever commodity you have, the raw material product is increasing. It's going to increase in the next two quarters or three quarters. For whatever factors and if you haven't figured out how to change pricing with your customers, going back, looking at your contract, basically say what's allowed, what's not allowed, how much notice they need, etc.

Then you're basically then playing catch up the day the first batch of that higher cost product comes out to the manufacturing line or whatever it is coming out of. That's where you basically, you have to be on top of your terms. You got to be on top of how much notice everyone needs. You've got to be careful about which customers are going to be particular about priorities or which ones are going to be a little bit more difficult to deal with, and you've got to figure all this scheme out before you actually go out there and before that product rolls off the shelf.

So, yeah, so it's, there's a lot of work involved. It's not just that, Hey, plan on paper and do it on a spreadsheet, but you have to go out there and talk to your customer, [00:18:00] talk to your legal team or, you know, someone or a buyer. About what's coming down the pipeline so they can anticipate it. No one wants a surprise at the eleventh hour.

So that's what I believe.

Barrett Thompson: Well, let me take another one. This is one I'm so empathetic to. I really am because when I talk to pricing professionals, I feel quite genuinely from them. They want to be making high quality decisions for the business. They want those decisions to be based in strong data, science, and these kinds of things.

But here's the paradoxical observation. Pricing is often the last place in the business or the place that is least informed by data intelligence, automation, and superior technology and tools, right? People are still banging around in Excel spreadsheets with a lot of glorified guesswork. Now I [00:19:00] say that with all empathy.

But it's really shocking if you look at the rest of the business, think of a national distribution business. If I go into their hundred thousand square foot warehouse, I'm going to see automation and intelligence in their robotic pick, pack, and ship all over the place, and it's been there for a decade.

Right. So the shop floor is already automated. The distribution floor is already intelligent. Vehicle routing has already been optimized. You know, trucks are doing optimized tours to drop off the product and probably in the break room. The vending machine in the break room has a predictive algorithm running inside of it that says, based on the rate of sales and the temperature outside, I know that I need to come back and refill the sodas, you know, on Thursday instead of the normal, you know, waiting until Monday of the next week.

What is your point of view on, and why is it that in an area as important as pricing, instead of being the leader in data and intelligent tools and automation and cutting edge technology, it [00:20:00] seems like the pricing department, pricing function is the laggard. They're the last to get these kinds of capabilities.

Have you seen that? What do you think's going on there and how can we turn that around?

Karan Sood: That's a few different factors playing in there. And I have my hypothesis on that. And I've shared that with a lot of people and they sort of always said, yeah, sort of, that makes sense, or at least, you know, or they have some opinion on it.

Number one being that a lot of pricing people in any organization and are coming from different areas of the business. They were not always in pricing. They didn't go to school for pricing and just like a marketing or finance person would go in and say, Hey, I went and did my, you know, business and masters in finance or, you know, you know, something or a bachelor's degree in finance or CPA or CMA or CGA or whatever, or CFA.

And pricing people don't come out that way. They came [00:21:00] from either a finance team. They came from, or it was a function that was just purely admin at some point, you know, and putting prices into an ERP system. And that person graduated to become a little bit more hands on with like, okay, creating some sort of analysis.

And then they graduated into some sort and so on and so forth. I think the know how of what's required for a great pricing function. It doesn't happen in those organizations. So I know very small subset of organizations that are very forward looking with pricing will have great, I think people with the right capabilities in there.

Otherwise it'll just be just dysfunction. This, you know, people are coming from different, a lot of people you talk to, I'd be, when I have, when you have people coming in for pricing role interviews, I just see tons of people coming from finance, like they're basically, they were financial analysts and they thought pricing was a great fit and I'm like, Hey, you are a great fit from an analytics point of view and not a great fit from a cross functional collaboration point of view that I need. So [00:22:00] I think one of that is that the second, I think is the tech in pricing requires money for something like for some, and I'm not talking about Excel and just analytics, and I'm just talking about like a good pricing software that optimizes your pricing is AI and machine learning based requires connections with data and all these different sources.

That's right, very high level of alignment. It needs a very high, this is not something a pricing manager does. It's not someone a pricing, something a pricing analyst does. This is something that's handled at the exact level, or they even had to see over C suite level. Where someone goes in and say, Hey, we have a pricing problem in the organization, or we have something of some sort of a issue that we need to fix.

And the way to fix it is technology and investments. Like, it's not the easiest. I can tell you the number of pricing managers I've met in my lifetime who I, who had enough credit to go in front of their execs, they reported to go say, [00:23:00] Hey, I need, you know, I mean I need half, half a million dollars to basically get this new system.

And I also need another a hundred thousand next year to basically need to make it running and keep the lights on the system. And a lot of people will be like, oh great, thank you and call it a day. It's not an easy task to ask for that amount of money when people just assume that what the pricing person really does is something in itself.

People just think, hey, you're going to make a mobile laptop and the cell C6 is going to have that magic number that they're looking for. But in actuality, a lot more, and that requires investment and that, and pricing team to come with budget. I can tell you, pricing team with zero budget.

Barrett Thompson: Yeah, I hear that.

And you know, I just have to ask because I've seen this same thing, Karan, that either the experience or the courage to go ask for half a million dollar budget from pricing, they feel awkward, right? And they may have difficulty succeeding at that, but isn't it true that in those same organizations?

Company didn't blink to sign up for 5 million for the new [00:24:00] ERP. And by the way, that was the initial estimate. They're probably 8 million into that 5 million project and still spending, trying to get it done. It's always bewildered me. Companies spend massive amounts and I'm not saying it's wrong to spend that on ERP.

That's not my point of view, but if you're spending 8 million, 10 million to get. The product shipped out and the invoice sent, why is it so hard to spend 800K, a one 10th of that to be sure that we're getting the best possible price, a price that's recovered our cost, a price that ensures we win the deal at the highest margins.

I just, I've never really understood why businesses haven't adopted this point of view on the quality of the dollar invested in pricing. It's really huge, right? The payoff's just huge for it. What have you seen there?

Karan Sood: Back to the same notion of ownership, right? Anything of that sort requires ownership.

ERP has an ownership stake in finance, or it'll have a ownership stake [00:25:00] in CTOs who will want to spend that money. But that's the core of, you know, what, how they run their business. Because there's no exec level support for pricing. Unless there's someone in the organization, or unless there's someone in the executive team who's 80% of the job is to run pricing.

You're not gonna get that support. But then you, and if you're reporting and you know, there's reporting structures like you should reporting to us, you know, pricing, people will report to the CFO or CMO or COO if you're a CMO. You, if you're going to a CMO, think about different places their budget is going to go.

Their budget is going to go in like branding. Their budget is just going to go on SCM, SEO, some email system, some, you know, marketing system, some PR. Where do you think someone who's titled as a CMO is, where is pricing going to sit on their radar? And if you're for the CFO, who is basically then managing, you know, finance and auditors and, you know, [00:26:00] for reporting and all that.

And yeah, whereas finance building that capability is not going to be top of the you know, list for them either. So until you have that exact level of person who basically is mostly working on pricing or at least, you know, spending a good chunk of time on it. They're not going to be able to go and look what else there was out there.

And for that, you require that person, you require middle level managers who probably understand that, can go out there and create a business case for a million dollar investment or a 2 million investment. And yeah, and that's where it comes down to. And pricing teams are thick, like, you know, right. How many pricing teams have you met in your lifetime that had more than five people?

And three of those people will need to be working all the time to keep the lights on. And then, you know, one person is managing, managing, maybe, you know, cross relationships, and then you can't have an entire, this whole thing rests on the shoulder of [00:27:00] one person to run it through and through. It requires organizational lighting.

And that's why, you know, companies, that's why it's consultants. It's very easy to reach the CEO and show them the importance of pricing and then have him sign up for him or her sign up for a 5000 engagement, but it never happens from the ground up. But then it comes from the top down and it gets a different attention.

So yeah, that's what I, that's what my philosophy there is.

Barrett Thompson: Karan, recently in a post that you made on LinkedIn, which I found so valuable, you had picked up on the theme of influence and how pricing teams should be seeking, you know, visibility and influence. Back to among others, you know, the C suite stakeholders, is there anything else you want to share with us either conceptually or practically on how pricing teams might do that?

I'm imagining there's someone in the audience here that says the CXO to whom I ultimately report. Maybe doesn't yet [00:28:00] understand or appreciate, even though they own the function. They don't yet have the comprehension or the faith and the power of pricing or other executives. And do I always have to seek out my own direct report C suite executive as my sponsor?

Could I have somebody from across another part of the organization, maybe that catches the vision and chooses to sponsor with me? What's been your experience?

Karan Sood: Someone asked me, Hey, what should I be working as my key soft skill in pricing?

I'm like, the only thing you should be working on is how to persuade people and gathering influence. A lot of people mistake that pricing need power. They need the power to create pricing. They need to be the power to go out and do something or go against the grain or go against their C suite leader or their manager.

I'm like, no, you don't need power. You need influence. You [00:29:00] need to be go out there and influence a product leader to basically say, Hey, product leader. This is what I think should happen in the stage of your product development. This is this research needs to be carried out or this product needs to be designed this way so that we can market more than the way we are thinking of marketing now, or you need to be able to go to finance and say, Hey guys, I know your expectations of margin on products are always 45, 50, 60 percent or whatever, but actually, you know what, we need to be able to capture more of the market because we want to bring the cost down.

And so we want to be at a 30 percent margin. I'm not saying you should be doing cost based pricing, but just saying, the margin expectation should be around this so that we can go out there and make it happen. And you need to be able to roll all of these people in. rather and influence them and make it almost seem like it's their idea that this should, how it should then basically be like, Hey, I'm the only one who's doing this.

So I think that's why it's very important for these people in pricing to create influence. And I will say to people in pricing that I meet, [00:30:00] find advocates for yourself and other teams that will basically go out there and say, Hey, this is what I found with the pricing team. And this makes sense.

Go out to data analytics to figure out how they can help you and try not to give everything yourself. And I think that's a problem we're going to run into in pricing. Cause we feel like we need to do the data analytics. We need to figure out the finance piece. We need to figure out the forecasting of the supply chain recently.

No, the more you take on for yourself, the more you'll set yourself up for failure and surprising things. You need to be able to leverage the other teams. You need to be able to leverage the CMO and the CFO and the chief supply chain officer to basically get their perspective and dependencies from them and then put it together, you know, and that's why you need influence more than anything else.

And I'll tell you an example. I will ask you, who did you meet in pricing that shaped your, a lot of your opinion. And I tell them, they all surprised, they are surprised. I used [00:31:00] to say, the number one person I met in my life in pricing. Well, the sales director for one of the e com channels in one of the places I used to work, that person was just tired of how pricing was in the market for his product, how he could not go on a sales call without being totally, you know, and brutally hammered with like lack of pricing discipline or products were all over the place and we don't have any strategy.

And he would just try it. And he came to me and, you know, we spoke and he was like, Hey, I'm just tired of this, how do we change this? That person was such a big advocate for pricing in the entire org. You know, it held that he owned channel was up and growing, so people cared for them. People wanna make sure that the channels are up and growing, get the right support.

But that guy was a super advocate to talk to product or talk to CFOs and CEOs and, you know, go into a wild fight with the C suite. Basically say, Hey guys, sometimes we are wrong and we need to [00:32:00] fix this. And that one person was not a C-suite leader. Not a CEO, just a director for a channel who basically earned a lot of respect just for the fact that he actually went out there and basically tried to influence everyone, leaders in other parts of the org.

Barrett Thompson: I love that story, Karan. And what it shows me also is that you didn't take your point of view to them and say, please adopt it. Sounds like you listened to what. They were struggling with, and when they said, I've got this pain and this problem and this challenge in my sales activity, you connected some of the dots back to pricing, right?

So you offered pricing as an answer to problems that they were already facing. Isn't that, I mean, I think we know this innately, right? As, as humans, we know this. It connects better with others when instead of taking our problem to them, my, my job is difficult because I have to do all this hard pricing stuff, you know, give me [00:33:00] money or be my advocate.

Instead, if we go listen to what they're trying to accomplish or the things they're wrestling with, and then say, Hey, I could help you out. Pricing could make a big difference there. That's a very different way to connect our pricing function to their needs and to kind of switch on their advocacy.

Karan Sood: A hundred percent. And I said, pricing will have some sort of stake with every stakeholder in the organization and every team finance will have some pricing, you know, pricing stake, marketing will have a pricing stake and sales will have. So if you just went out there and listened to the problems, everyone would have a problem that if they tell you about it.

Well, always going to be an issue, but I, you know, it's something you have to figure out, but there will always be an issue that needs to be solved. And there's always a pricing angle to it. So if finance doesn't, is not happy with the kind of margin they're making on the product or how sales are, or how sales are going.

Then that's a problem that you can always take back. If [00:34:00] sales has a problem with not being able to sell the product in the market because it lacks, you lack the value story or you lack something in the product that needs fixing, then you take that and then you try and put the pricing spin on the value story.

You know, so a lot of times the sales in my experience has always complained. They don't have the right sales enablement tools or the right training or the right collateral to take to sales call center. So go fix that with marketing. So there's always something that needs solving and that's the beauty of cross collaboration and say, and pricing that you can actually be out there, try to get that and listen more than you talk is something that I feel like is something the pricing team had to work on and listen and then do some, you know, try and get, try to get the solution I created and then go from there.

And that's how you build influence. Influence is not made overnight or with magic with a spreadsheet that you Hey, here's a magic pricing. No, instruments is made over time where you make [00:35:00] one decision after another, where you listen to other people, where they can actually recognize you, and then can be an advocate for pricing and for yourself and the organization.

And that's the way, you know, that's the way it should be.

Barrett Thompson: Your examples made me think of some others that I've seen. And you know, on the surface, The pain points as described by the other leaders didn't sound like pricing pain points at all. But in fact, there was a really powerful connection. So I want to share these to inspire our audience.

One was a sales leader who said, you know, I have about 15 percent turnover on my team every year. I have hundreds of sales reps nationally, 15 percent turnover. It's about average for that industry. And their challenge was when I bring a new rep on board, it takes 10 months or 11 months or 12 months to teach them how to price things properly and how to meet revenue run rate expectations.

And so. Their whole point of view is [00:36:00] it takes a while to get them onboarded. And what we were able to say as well, when it comes to the pricing part, we can make them, if you will, pricing experts on day one, how do we do that? Because the technology is going to deliver up price recommendations to them. And that price recommendation is looking at years of historic transactions.

It's distilling the wisdom of hundreds of sales reps down to a price point. So that was a part of making the onboarding rapid. And that actually became one of the central things that was used to explain the value of the solution was look at that. We're shortening the time to effectiveness for the new recruits that were onboarding because they were bringing on, you know, many people every year.

Another one I hear about quite often, I'm guessing people in our listing audience have this one a bunch. Everybody wants to do things faster, speed, whatever that is. How about I hear this from sales today? It takes four or five days to get a quote back to a customer, but the customer is expecting it in 20 [00:37:00] minutes.

How can I take the time out? Well, the other person you're listening to might be talking about time looks to them like the problem, but as a pricing person, we recognize where's that time going, it's people debating over email on what the discount price ought to be. So if I brought a solution along that solved the discount price problem in an intelligent data driven way, in a quick way, in a way that automated, I could cut the cycle time down tremendously by actually going after the heart of the problem.

It's kind of symptom and cause. The symptom is things are slow. What's the cause? People are debating what the right price should be because nobody knows. So I'll put that challenge to the audience. As you go and listen, if you take Curran's advice here and go listen to other stakeholders. If you hear them talk about key pain points, it's not clear to you how those might connect back to price.

Reach out to Karan. We're going to share his contact info here at the end. Reach out to me. Maybe we can help you look at what you've heard and find a way to [00:38:00] connect that back to price so that you develop advocates. for your pricing practice from other stakeholders throughout the business.

Karan Sood: Absolutely. Pricing's expertise is not always to basically say, Hey, let's do a pricing increase and let's just figure out the next price point. It's always about figuring out the holistic solution as to, Hey, what do you need to fix in that? Like let's fix the time to quote or the right discount and the right discount.

I think I've mentioned it before. Every time you introduce the word discount in a sales conversation, I think it delays the sales cycle by, I don't know, it's like days, because then you're debating at the point, you know, what's the right discount. And there's some fascinating work done by one company.

I don't know if you've heard of Chili Pepper. Chili Pepper just eliminated discounts from their entire, in their entire portfolio and had no more discounts. It's going to be, we came up with a fair price or whatever the price was and said, we're going to eliminate discounts. So they said deals can close faster.

There's [00:39:00] no nuance in the forecast and the budget around what the discount rate is going to be. And we stick with the value story of a product. So, I mean, it's an extreme example, you know, I will say it's an extreme example, you know, pricing is a necessary evil in B2B, but it just goes on to show that if you expedite that part of the process.

It does help, it does speed up things, it does make things happen faster, sales reps are more satisfied and more happy. They can, you know, do some science to something that's being done, rather than just like, Hey, I can get approvals for this much.

Barrett Thompson: Yeah. Maybe another way to say it is, you know, good pricing helps more than just it helps people inside your organization.

It helps people outside of the pricing team and it helps them in a big way. So go look for those connection points. And out of that, you'll. be most likely to find, you know, a chorus of advocates who would help you make the case, get the budget and put the solution in, right? Nobody does anything, you know, as an army of one in [00:40:00] pricing, right?

You really have to have a support team around you, team supporting your vision. Well, Curran, this has been a great conversation and very enlightening. I'm so glad that you've come to on the program to share. Is there anything else that you want to leave our audience with before we sign on?

Karan Sood: I mean, you know, find me on LinkedIn.

I've published tons of content for pricing folks, from everything from strategies to frameworks to, Googling, you know, everything that I find interesting, I learn, whatever I learn, I share, and then I learn from people that are on that, that are in my connections and my list. And I put links that are just out there.

Barrett Thompson: Karan, thank you. I can tell that pricing is definitely in your blood. And so thank you again for sharing with our audience today.

Karan Sood: Thank you. Thanks for having me. It's been a pleasure.

Barrett Thompson: And I want to thank each of [00:41:00] you, our podcast listeners for being with us. If you'll check the show notes, you'll see a link there to Curran's. LinkedIn profile. So you can get connected with him. And I encourage you sign up for his newsletter. Take a look at his blog posts.

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