As a consultant, coach, and 6-time executive, Amanda Northcutt has launched, grown, and scaled online businesses with fantastic results on both the individual and organizational level, while creating extraordinary, frictionless, and successful journeys for their customers.
In this episode, Amanda delves on the importance of focusing on customer retention and expansion to maximize recurring revenue. And leveraging foundational desires and social proof to enhance one’s marketing efforts. She also highlights the value of dynamic and continuous pricing strategies and the need for personalized connections in sales and the impact of showing proven value to customers.
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Why you have to check out today’s podcast:
- Learn to prioritize expansion, not just acquiring and retaining customers, to maximize lifetime value
- Discover why it’s crucial to avoid static pricing and the importance of regularly testing and adjusting your pricing
- Gain a deep understanding of your customers’ core desires and master the art of leveraging social proof to create highly effective marketing strategies
“Always be testing your pricing. Your pricing should not be static. That is such a rookie mistake to think that you’ve nailed it the first time, or at any time really.”
– Amanda Northcutt
Topics Covered:
01:39 – An accidental entry into recurring revenue
03:20 – Talking about the time of Salesforce’ rise in the SaaS industry
04:46 – Sharing her journey into the subscription-based business model
05:57 – The challenges and importance of marketing and delivering value in subscription-based businesses
08:25 – An added challenge for SaaS businesses of needing a product that continuously delivers value to retain customers
10:46 – The need to create expansion opportunities with tailored solutions and the need to leverage social proof to strengthen the value proposition to potential and existing customers
13:31 – Understanding and leveraging consumer psychology and desires to drive value perception and retention in both B2B and B2C contexts.
15:46 – Expanding on customer’s foundational desires as effective marketing strategies
17:21 – Helping customers achieve their goals and meet their needs rather than simply trying to make a sale.
20:06 – Describing her current work and her pricing approach for her clients’ customers.
25:52 – Amanda’s best pricing advice
26:57 – What it means to be always testing your pricing
Key Takeaways:
“…the whole deal with recurring revenue: If your marketing sucks, one, people aren’t going to sign up. Two, if you’re not delivering value over and over and over and over and over again, people are going to churn.” – Amanda Northcutt
“If you truly actually care about someone and you want to help match them with a solution that is actually going to help them not only reach their foundational desires, but the real business needs that they have, that’s where the most sales are going to be made.” – Amanda Northcutt
“Desperation is the enemy of all sales, ever.” – Amanda Northcutt
“Another element of closing the deal in an automated sales funnel is that guarantee is very, very, very important. It’s right up there with social proof.” – Amanda Northcutt
People/Resources Mentioned:
- Texas A&M University: https://www.tamu.edu/
- TexAgs.com: https://texags.com
- Marc Benioff: https://en.wikipedia.org/wiki/Marc_Benioff
- Salesforce: https://www.salesforce.com/ap/
- Alan Weiss: https://alanweiss.com/about-alan-weiss/
- Convertkit: https://convertkit.com
- Active Campaign: https://www.activecampaign.com/
- Amazon Prime Video: https://www.primevideo.com/
Connect with Amanda Northcutt:
- LinkedIn: https://www.linkedin.com/in/northcuttamanda/
- Email: [email protected]
Connect with Mark Stiving:
- LinkedIn: https://www.linkedin.com/in/stiving/
- Email: [email protected]
Full Interview Transcript
(Note: This transcript was created with an AI transcription service. Please forgive any transcription or grammatical errors. We probably sounded better in real life.)
Amanda Northcutt
Always be testing your pricing. Your pricing should not be static. That is such a rookie mistake to think that you’ve nailed it the first time, or at any time really.
[Intro/Ad]
Mark Stiving
Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the artistic relationship between them. I’m Mark Stiving, and our guest today is Amanda Northcutt. Here are three things you want to know about Amanda. Before we start. Sometimes you just meet someone that you know is smart, and somehow Amanda and I had a networking call and I was so impressed that I had to have her on the podcast with you. So we’re going to share her knowledge with you. She is the CEO and Co-founder of Level Up Creators. She’s been a fractional c-suite officer for several companies over the last several years. She specializes in recurring revenue businesses, especially mid-tier creators. Oh, and she traveled the world full time when her son was age five to seven. so she worked remotely. Was that amazing or what? Welcome, Amanda.
Amanda Northcutt
Thank you, Mark. That was a very generous intro. I appreciate it and the feeling’s mutual right off the bat, so I’m glad to be here.
Mark Stiving
Oh, no worries. Okay. So I normally ask how’d you get into pricing, but I’m not even going to ask you that. How did you get into recurring revenue? I love recurring revenue.
Amanda Northcutt
Me too. I am obsessed with it. And so, I mean, if pricing goes hand in hand with recurring revenue, because you’re going to really, really screw up your business and lose a lot of opportunities if you’re not capitalizing on the value that you’re providing in a recurring revenue business model. So, I got into recurring revenue by accident when digital recurring revenue was in its infancy. No one knew what that was. I started my career at a company called TexAgs.com, and if you know anything about Texas A&M University in College Station, Texas they’re an SEC school and they have one of the most rabid fan bases in the world. And so this was back in 2005, kind of finding myself a sales job I had already been selling for several years, and got a commission-only gig at this company.
I was employed, number two and ended up staying there for almost a decade. Kind of got my sea legs for sure. And, yeah, I had a very interesting opportunity to build out a cash cow in that organization that I was able to parlay into some pretty big time consulting gigs. And my first company ultimately, and it was there that I fell in love with recurring revenue and just kind of the model of selling digital products that are consumable at a predictable rate. And getting people to re-up every month or every year. That’s pretty exciting. So I was able to kind of pivot that into SaaS a little bit later.
Mark Stiving
Yeah. So 2005 was pretty early, but by the way, before I ask the next question, I just have to point out, and I’m not sure that you know this, I am a huge Ohio State fan. So speaking of rabid fans, we are rabid. So, okay, now back to the content. Do you remember when did Salesforce become popular? Was that before 2005 or after 2005?
Amanda Northcutt
Marc Benioff had his big protest. Like he got that permit pulled in the city of San Francisco to protest something crazy. And like, that was like a huge inflection point for SaaS and for, I mean, obviously they’re kind of like the OG SaaS company. And for Salesforce, I cannot remember when that was. It had to be before 2010 though because they, I mean, that’s a juggernaut of a company we’re talking about. As old as it gets in SaaS.
Mark Stiving
But I kind of think of them as the founders of SaaS now. I’m sure there were, in fact, I know there were a lot of other SaaS companies and businesses, but they were really the beginning of where everybody said, oh my gosh, the world is going SaaS.
Amanda Northcutt
Yeah. Oh, I got it. He was protesting, like on-prem, software, that was the poll protest. And so it was like this movement to the cloud. But yeah, I mean, I don’t remember anyone before Salesforce and Marc Benioff coming into the scene and popularizing that model. But yeah, that’s a good example.
Mark Stiving
Yeah. Well, I asked because I didn’t get into subscriptions until five or six years ago. I’ve been in recurring revenue businesses where we sell components to manufacturers. I’d never been in subscriptions. And when I stopped to study subscriptions, I found this business fascinating. and so it sounds like you grew up in SaaS, in the cloud.
Amanda Northcutt
Oh, yeah, definitely. Since very, very early on in my career. And moving from digital, I mean, it was a membership community, membership site. Like people were paying 13 bucks a month in the early two thousands to get information on like, which high school kids are going to get recruited to go to Texas A&M University, and the game analysis breakdowns and all that kind of stuff, and locker room info, blah, blah, blah. so that was quite a switch to go to software as a service. But I found that many, many, many of the principles of online membership communities translated pretty seamlessly to software as a service. I mean, it’s all a game of acquisition, churn reduction, LTV maximization. And at the end of the day, MRR and ARR maximization. So very similar, human behavior. Beautiful. You’re all working with humans. Right?
Mark Stiving
Okay. So my second book I wrote was called Win Keep Grow, and I titled it that because it’s essentially acquisition, retention, and expansion. Yeah. But I hated those words. So it was like, Win Keep Grow.
Amanda Northcutt
It’s much better for a book title for sure.
Mark Stiving
And so when you think of subscription businesses what’s the big challenge that you see in that area of winning, keeping growing customers? Or is there one?
Amanda Northcutt
Oh, there’s so many different ways that we could take that. Let’s talk about Marc Benioff, the reason that Salesforce took off, and I’m sure there were other SaaS companies before that, but the reason that he’s remembered as the godfather of SaaS is because of marketing. Right? And his product actually matched what he marketed. He did excellent marketing, got people’s attention, made a promise, and he made good on the promise. And that’s kind of the whole deal with recurring revenue If your marketing sucks, one, people aren’t going to sign up. Two, if you promise something that’s not actually deliverable within your recurring revenue product, whatever the hell it is, there’s a lot of different ways you can do this. Whether it’s software, paidnewsletter, membership community, high- group coaching — the list goes on.
if you don’t deliver and deliver over and over and over and over again something that is consumable. And you can take that a bunch of different ways as well. But, whether it’s information, whether that’s data or advice or summaries or insider info, whatever the case may be, if you’re not delivering value over and over and over and over and over again, people are going to churn, right? People aren’t going to sign up if your marketing sucks, if your marketing is good, but your product sucks, people are going to churn. And the whole business model kind of starts to fall apart at that point. And Harvard started doing research on recurring revenue businesses and acquisition. I mean, they’ve been doing it for a really, really long time, but I’m talking about in the 2010s when SaaS really kind of like came into infavor of popularity.
And they published a study, I can’t remember exactly which year, but it was in the 2010s that it costs more than seven times as much to get a new, new customer than it does to keep an existing one. I’m sure there’s a multiplier on that at this point. It’s way more than seven times as much because attention is very, very expensive at this point, right? That’s why brand deals have come into popularity with influencers and why companies are trying to get attention share and wallet share through attention in that way. I mean, any one of those problems you want to double click on or…
Mark Stiving
I absolutely do. Well, so what I want to point out is that every business has the problem that says if your marketing sucks, you don’t win customers. Right? It doesn’t have to be a SaaS business. And then SaaS businesses have the added problem that says if your product sucks, you don’t get to keep the customer. And, I don’t know about you. I’ve worked with a bunch of companies that say, hey, I want to go SaaS. And yet their product doesn’t deliver this continuous stream of benefits. And so they want to go SaaS because it increases their valuation, but the product and the market just doesn’t fit that. Have you seen that much?
Amanda Northcutt
I typically work within the SaaS space, I worked at companies that were already under a SaaS model, and they had the kind of consumability piece and the value metric down on some level. So outside of SaaS, what I do now working with digital thought leaders is kinda what we call them. So creator educators or people like you that are talking on LinkedIn and know their stuff and have information that they can sell, they can sell connections. And so it’s helping people like you really find what the consumability piece is to turn individual intelligence and your network and your influence into recurring revenue. That’s a lot trickier. and that’s more kind of the space that I’m in right now.
Mark Stiving
Nice. So here’s the piece that when you described all the problems or some of the problems, here’s the piece that I thought you missed. And so I want you to address this one. And that’s the grow side, right? I think so many companies focus, they say the words land and expand all the time. And yet they spend all their energy and resources on landing and keeping — important, but they don’t spend resources on expand. So feel free to pontificate on that concept.
Amanda Northcutt
Yeah, definitely. I’m big on expansion opportunities but you got to get the ‘keep’ part down first right before you start on the expansion, unless you can strategically parlay the ‘keep’ into an upsell very, very quickly, right? And so, again, we’re talking about LTV maximization, so you want to get people in, we’ll keep talking about SaaS here, whatever the metric is the value metric, whatever you’re charging. And you want to provide opportunities for increasing the engagement, increasing the value recognition, and therefore increasing the amount of money that people pay you. And so, I like the idea of product laddering and having different opportunities for different customers. I know you’ve talked about platforms versus solutions and things like that, and I thought that was a very interesting way to put that. And so you want to be very specific about the solutions that you’re providing at different levels and make sure that whatever you’re charging is commensurate with the value that is being received by the customer. And so we can talk about some specific examples if you have some in mind, but I mean, that’s the basic deal, is like, keep dangling the carrot out there and prove out through your marketing to your existing customers the value, outcomes, and transformation that they will recognize by the next thing that they buy and the next thing that they buy and the next thing that they buy. which can be tricky with SaaS, but it’s certainly doable.
Mark Stiving
Yeah. I look at talking to smart people and having new realizations and a new realization I had recently that fits this conversation is when people are buying our product for the first time. So we want to win a customer. The only thing they can use is perceived value. So what’s our marketing tell them? What have friends told them? What do they believe once they buy and use our product? Now they have, I’m going to call that experienced value. so they don’t actually know the value of our product, but they know what they’ve experienced in the value of our product. And then I think there’s a third type of value, which I so rarely hear people talk about. And this was a big aha I had recently, and that is what I’ll call proven value. So proven value is, have you gone back to your customers and said, this was the KPI before we worked together, this is the KPI now, here’s how much money you’re making because you’re using us. and I could see that in your world, right? I don’t do that for my customers, right? I should be, there’s no doubt. So thoughts on that?
Amanda Northcutt
That’s the first thing I thought of. Social proof. As soon as you started talking about what value we hope to.. or perceived value. What was the first one you said? Not experience, but…
Mark Stiving
No, perceived value.
Amanda Northcutt
Perceived, yeah. Okay. Perceived value.
Mark Stiving
Experienced value.
Amanda Northcutt
The first thing I thought of was like, prove it from existing customers. Yeah, very important to go and have your marketing team capturing those customer stories, whether case studies, testimonials, and statistics are kind of the three legs of the social proof stool, if you will. And so having a mix of those. You want to get really, really specific, even in a testimonial, you want to ask people, okay, I went from X to Y because of Z and just the level of specificity that you can provide in your marketing materials and whatever channels you’re using in your marketing motion, the better, right? So no fluffy stuff. It sounds like BS, people see right through that. If you made that up, video testimonials are best.
But lots of people aren’t good on video, but if you can have a real picture of a real person with the real words that they actually said that include proof points, their name, and that person’s name actually appears on something like LinkedIn, like it’s a real human. That goes a really, really long way. And then case studies are going to be important. obviously, like in an enterprise sales motion for sure. But they are helpful if you can provide the data points that people are looking for. And then the quantitative data. I mean, if you’re a SaaS company, my God, if you’re not collecting the data to be able to go back to your marketing team and say, here’s the quantitative data on the transformation value and outcomes that we provide for customers. Like, what the hell are you even doing? You know,
Mark Stiving
Yeah.
Amanda Northcutt
That’s a huge piece of it.
Mark Stiving
I think that fits really well with B2B. How do I do that in the B2C world? Do you have any thoughts? So I’m a Texas Aggie fan, and I’m paying you $13 a month. What value am I actually getting from you?
Amanda Northcutt
You are recognizing foundational desires. So we’re going to go more like psychological principles and that which you can absolutely get down to in SaaS for sure. And the best copywriters in the SaaS world know this, right? So people need to look good to their bosses. They want power, control, luxury, relationships, community acceptance. And so you want to make sure that you are understanding your customer on a very, very deep level. Now, on the surface level, they want information about Texas A&M University sports. Okay, that’s great. If you go a little bit deeper, they want to be a part of something. They want nostalgia, they want connection to alumni, to fans. They want to remember their youth favorably, right? When their time back in College Station, Texas, on campus and at Kyle Field standing through the games. And so, and that nostalgia piece, that’s a huge foundational desire.
And so you really want to be playing on those things and then you’re going more for like the qualitative data, right? And so, I mean, I asked for testimonials. We would do an annual survey back at TexAgs to get as much quantitative data as we could, but what we’re really looking for is that qualitative data, the voice of customer being able to turn that around and hopefully choose the ones that playing two foundational desires and wrap that back into our marketing efforts. So that’s one part of the B2C play. But you can also, I mean, all the platforms, SaaS solutions and things like that, that are available for B2C recurring revenue businesses at this point, they do provide a tremendous, tremendous amount of data. and so an example of quantitative data you could use there is like the average customer stays for 10 years or something like that, like the average Aggie fan. I mean, I probably stayed for 20 years, honestly on that website. But that shows so much community and commitment and like, you don’t want to be missing out. FOMO is another one. Fear of missing out, avoidance behavior. Like a loss aversion is a huge, huge, huge sort of foundational desire and a psychological principle.
Mark Stiving
Okay. When I first asked that question, you rattled off six things. I think it was six, I didn’t count instantly. Is that something that you just think of automatically? Did you make those up on the spot? Those were foundational desires. Can you say them again?
Amanda Northcutt
Yeah. There’s a lot more than six. I do think about foundational desires all the time because they’re the basis of all marketing, or they should be the basis of all marketing when you’re talking to a specific human person. So, power control, community, luxury, wealth, belonging, acceptance. Yeah, those are really important ones. looking good to your boss, looking good to your spouse, being attractive.
Mark Stiving
Yeah. So, I’m going to embarrass myself for a second and say another thing that I just recently realized was important and, okay, so everybody’s going to stop listening to me from now on because I’m going to say this is that people have personal desires even when we’re selling B2B businesses. Okay, so is that insane that it took me forever to figure this out, or actually it took me forever to realize that’s foundational.
Amanda Northcutt
No, that is not common knowledge at all. That’s pretty revelatory, I feel like every time I bring it up. So, no, I read a lot of psychology books and papers and things like that. So I think that’s just kind of like a different level, but I’m obsessed with all of those kinds of things. And so, yeah.
Mark Stiving
Well, that’s funny because I think the exact opposite. I think that most salespeople deal with the emotional, personal feelings of the person they’re selling to, and they don’t step back to say, okay, how much money am I going to make the company? Right? What’s really the value of this thing I’m doing for this customer? so it’s funny that you, and I think just the opposite on this issue.
Amanda Northcutt
Well, really the solution is both, right? Absolutely. Because no one’s going to listen to you if you’re an asshole, if you don’t care. It’s like, what’s that old saying? It’s like no one cares how much until they know how much you care, right? That’s been around forever and ever and ever. That is absolutely true in sales. You have to make that personal connection first. But then if you don’t have like your sales battle card memorized, and if you don’t understand the customer stories, case studies, testimonials, quantitative or yeah, quantitative data on value, outcomes and transformation and specific customer stories to draw on, ah, this customer who is similar to you thought this at the same, also thought this thing handling objection, and what they found out was this. And so making sure you’re like locked and loaded with stories of people who are like you because you’ve taken the time to get to know someone and what those foundational desires are that they are seeking on both a personal and professional level.
and then you can really get somewhere, right? And if you’re one, I have a whole thing with like salespeople and the traditional like archetype of, of salespeople, right? If you truly actually care about someone and you want to help match them with a solution that is actually going to help them not only reach their foundational desires, but the real business needs that they have, that’s why they’re approaching you in a B2B situation, right? That’s where the most sales are going to be made. The best salespeople are typically those who are like, oh, I hate selling because I hate X, Y, and Z or whatever. It’s like, no, you actually have the makings of the best salespeople because you actually want to go and help someone. So that’s a whole another discussion for another day. But I’ve trained many, many salespeople and like that paradigm shift has to happen for a sales person to be successful, especially in a recurring revenue model.
Mark Stiving
Yeah, that’s pretty fascinating. I just have to say that I was a salesperson once a long, long time ago, and I was horrible because I was trying to sell. And today I’m a salesperson, not as a salesperson, I’m a salesperson because I run my own company. And all I ever do is help people and they buy from me. So it’s like exactly what you just said. but I don’t have to sell.
Amanda Northcutt
Yeah. And desperation is the enemy of all sales ever, ever, ever. And so if you’re coming with a posture of like, hey, ball’s in your court, we’re here when you need us, but we have this thing and your competitors have our thing too. And so you’re bringing in like you’re leveraging social proof, positive peer pressure but you’ve also taken the time to get to know the person, understand that like the solution that you have matches the need and the wants and the desires of your prospective customer and they will buy. But yeah, desperation is, that’s a big turnoff. and in personal relationships too.
Mark Stiving
Yeah. So in the last few minutes we have, let’s explore what you do today and what we can learn from what you do today. So do you work with people like me, but do you usually work with people that are selling B2B, B2C? Both?
Amanda Northcutt
Both, definitely. So I’m primarily working with individuals who have personal brands. Kind of like one of the terms coming around is like digital thought leaders. So typically we think about people with personal brands as the kind of old model pathway to monetization and fame, if you will, is like getting on the speaking circuit and having a book or two or three. maybe you do, really high ticket one-on-one consulting or something like that. And so people like that who have demonstrated a track record of success, of knowledge, of expertise, wisdom that’s been acquired over the years as young as 30, like that’s enough time to get 10,000 hours in actually in the workplace on up from there. I help those people monetize their personal brands through information-based digital products. And so that could be paid newsletter, courses, membership community, mastermind, high ticket group coaching, and we have kind of a whole customer journey that we help implement for these people who have strong personal brands so that they can maximize LTV and have systems that are automated on the backend that are highly, highly scalable. So we kind of like to build the backend machine to monetize your knowledge, experience and wisdom.
Mark Stiving
Okay. That was way more complicated than the answer that I was hoping for because the next question I wanted to ask you is how do you price it? But how can I price like the 20 things you just listed? So, let’s pick one and how do we figure it out, by the way, when I ask how do you price it, I’m not asking how much you charge your customers? I’m asking how do you price your customers’ products to their customers?
Amanda Northcutt
The same way we price our products. So, I mean, the first time we spoke a month or so ago, Mark, I told you I was like the Alan Weiss model, a million-dollar consultant way back in the day, old, old book at this point. His model is, as a consultant, you should try and capture 10 to 20% of the value that your customer is going to recognize based on your services over the next 18 to 24 months. And so in our consulting firm, it’s not too hard to price it because we have a lot of quantitative data from which to draw and come up with prices that make sense. of course you have to take into account industry norms and willingness to pay quotient and all those kinds of things. But, for instance, we, I’m not going to like to drop that name, but we just helped launch an online membership community for a big influencer in the college sports arena, which is super full circle for our conversation.
And coming up with a value metric for his membership where he helps families with boys who play high school football get scholarships to play in college. And so we did tons of competitor research, voice of customer research, like customer interviews. We looked at all of the statistics. My degree is actually in sport management, so this is a super fun project, but I know what the statistics are in terms of conversion rates from high school to college to pro and, and all the different sports. And looking at the value of a college scholarship, right? Like what does it actually cost to send your kid to university these days? And so, I mean, we had a massive data set. I don’t think it’s anywhere close to the stuff that you and a couple other guys you’ve had on this show are using.
So it’s less sophisticated than that. but I mean we try and have a comprehensive data set and understand willingness to pay, industry norms, value and outcomes and actual dollars and cents plus kind of mixing in like the foundational desires on signing day, right? In like March or whatever, I guess that just happened during their senior year, like that’s the most proud moment of your entire like, parenting journey. And so there’s pretty high value on that. There’s a pretty strong premium on that. So yeah, lots, every single piece of data we can get our hands on, we will take and then try and come up with that value-based pricing model. Again, trying to recognize 10 to 20% of what you have helped them save or help them gain over 18 to 24 months.
Mark Stiving
Yeah, I find that fascinating. I think in the B2B world, it’s pretty easy, not easy, but it’s relatively easy to say, here’s how much money I’m going to make you or save you. In the B2C world consumers just don’t think that way. I mean, every once in a while you see someone doing that with an LED light bulb or they’re doing that with an energy star appliance or something like that. Or maybe my electric car, right? I’ve gone through these calculations, but I think people do that as justifications. They actually haven’t done the math. I think the only place where you see consumers truly do the math and make an economic decision is putting solar on your house. And besides that, I just don’t see it. So I find it surprising that you think you can get people to pay based on how much money you think they’ll save.
Amanda Northcutt
It’s working. We launched yesterday.
Mark Stiving
Nice, nice, nice, nice. Well, I just find it fascinating, right?
Amanda Northcutt
It comes down to the marketing, the messaging, the language, right?
Mark Stiving
Yes. And I’m sure that the foundational desires that you talk about are what’s going to grab their attention and the return on investment is what they’ll use to justify the purchase.
Amanda Northcutt
Yeah. It’s just believing that, okay, this is the solution. This is going to get me there. And having a guarantee is also very helpful and especially in a B2C environment, like, okay, this is safe because I can back out in a certain amount of time kind of a situation. So that’s kind of another element of closing the deal in an automated sales funnel is that guarantee is very, very, very important. It’s right up there with social proof.
Mark Stiving
Nice. Amanda, I think I could talk to you all day, but we’re going to have to stop the recording and then you and I could just keep talking all day. I guess that’s okay. But I am going to ask the final question. What’s one piece of pricing advice you would give our listeners that you think could have a big impact on their business?
Amanda Northcutt
Always be pricing. Not always be closing, but always be pricing. I would say always be testing your pricing. Your pricing should not be static. That is such a rookie mistake to think that you’ve nailed it the first time or at any time really. And so continuously testing the market and being very sophisticated about your approach to pricing and know that you are never going to nail it the first time. And even if you nail it at one time, it’s not going to be the same in 18 months. So, pricing is the biggest lever that you can pull for profitability in your business and it enables, I mean, the downstream impacts of getting your pricing right are so very, very significant. So using someone like Mark to help you with your pricing one time, but then again and again and again, is going to make, I mean that’s going to be your turn on investments going to be just massive. I would say, I would venture to guess that more than anything else pretty much is getting your pricing right. So, yeah.
Mark Stiving
So, a fabulous answer. And I think you imply, and I’m going to ask the question directly, but I think you imply by testing pricing it’s okay to charge different customers different prices. What’s your perception on that?
Amanda Northcutt
Oh yeah, especially in the SaaS world. I mean that’s easier to do in an enterprise package. But I mean I would think about ConvertKit and Active Campaign email service providers. Like their value metric is like, is number of users, typically, so the size of your email list basically determines how much you pay and that’s kind of an interesting value metric, but it kind of does translate to the value recognized potentially from the person sending the emails because you’re likely to make 10 times as many sales of whatever you’re selling if you have 10 times the email list. And so that kind of works in my mind. but yeah, you would be so crazy to charge the same amount to a different customer who’s going to have your product or service is going to have an outsized impact on, you have to leave yourself the opening to go in and make sure you’re capturing the value for your company at a rate commensurate with the value you’re providing always.
Mark Stiving
So now all we have to do is call Amazon and tell them to reprice Prime.
Amanda Northcutt
They do keep repricing Prime.
Mark Stiving
They do.
Amanda Northcutt
I’m tired of it.
Mark Stiving
Amanda, thank you so much for your time today. If anybody wants to contact you, how can they do that?
Amanda Northcutt
Yeah, you can email me, [email protected]. I’m also on LinkedIn and a host of other places, but that’s probably most relevant for this crowd.
Mark Stiving
Okay. And we’ll have, in our show notes as well. Great. And to our listeners, thank you so much for your time. If you enjoyed this, would you please leave us a rating and a review? And I’m going to brag a little bit. Jeremy Borot from Ingenico wrote on Amazon about my book Selling Value titled Great book on Pricing, ‘Selling Value is a solid B2B sales book. It is no nonsense, applicable and structured knowledge sharing with a single daunting pricing question in mind: how do you sell value? This is a key principle of B2B pricing: forget about your product, its features and your cost base. Sell value! Clearly the best book available on the topic.’ Oh my god, Jeremy, I’m sending you a check now. And finally, if you have any questions or comments about the podcast or about pricing in general, feel free to email me, [email protected]. Now, go make an impact!
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