Kate Mandrell is a trusted executive with a demonstrated track record of over-delivering promised business results in large-scale commercial transformations on leading-edge marketing & sales topics. An inspiring leader, team builder, and impact-oriented problem solver.
In this episode, Kate discusses how you can embed pricing into the company culture in order to gain the best price, not just for the companies benefit, also for the customers as well.
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Why you have to check out today’s podcast:
- Learn how to instill a focus on pricing within your organization
- Find out how to differentiate your product and communicate your value
- Discover how to drive a transformative change within your company by partnering with salespeople to sell on value rather than price
“Make sure that you’re not too internally focused. I think a lot of people get caught up in what are my costs? How do I manage my costs? But pricing has the ability to do so much more than just make money.”
– Kate Mandrell
Topics Covered:
01:17 – How she learned to love pricing and has never looked back since
02:40 – Two things that drive her to want a pricing role
04:18 – What it takes to be successful and grow into a pricing role
07:14 – Echoing Mark’s advice on how to make one’s pricing role have a great impact on the company
08:03 – Sharing her thoughts on better word choice: ‘make value a part of the culture’ versus ‘make pricing a part of the culture’
09:16 – Communicating the ‘attitude of value’ inside the company
11:02 – Solving the big picture rather than selling the individual pieces
12:46 – How to go about understanding your product packaging exercise
15:15 – Convincing salespeople of the right approach to ‘sell on value’
17:55 – Proving value-selling works even when she was not actually out selling the product
20:51 – Where’s the art in pricing
23:48 – Kate’s pricing advice that has a great impact on one’s business
Key Takeaways:
“The more that you can do to drive the pricing change, show the impact of that change, and then really embed that into the culture of how the company thinks that will help your company and it will certainly help your careers as well.” – Kate Mandrell
“We changed our pricing to align to value and therefore made value of what we could deliver the focal point of the conversation versus price, as the focal point of the conversation.” – Kate Mandrell
“We did a lot of research upfront. We had conversations with our customers; we understood what our competitors were doing. We really tried to see how we are differentiated, what do we do that is different, better, and special. And that was really the focal point of where we started [changing the company’s pricing culture].” – Kate Mandrell
“As you go through a packaging exercise, it’s really important to understand who are the different segments that you’re targeting, and make sure you don’t take a one-size-fits-all approach in all cases.” – Kate Mandrell
“In pricing roles, we need to understand how do we tailor our packages and our pricing to deliver the value and the outcome that those unique segments are looking for.” – Kate Mandrell
“Every time you introduce something new or drive a change, you have to have sales right there with you, because they’re the face of the customer that has to be able to articulate that value.” – Kate Mandrell
People / Resources Mentioned:
- McDonald’s: https://www.linkedin.com/company/mcdonald%27s-corporation/
- Ecco Restaurant: https://www.ecco-atlanta.com/
Connect with Kate Mandrell:
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.)
Kate Mandrell
Make sure that you’re not too internally focused. I think a lot of people get caught up in what are my costs? How do I manage my costs? But pricing has the ability to do so much more than just make money.
[Intro]
Mark Stiving
Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the artistic relationship between them. I’m Mark Stiving. My mission is to help your company win more business at higher prices. Today, our guest is Kate Mandrell. Here are three things you want to know about Kate before we start. She started her career by spending six years at McKinsey. She left consulting to join NCR as a Senior Director of Global pricing, and in a measly three years, became Executive Vice President of Commercial Strategy and Operations. Oh, and she also studied in Prague, learning how to speak Czech. Welcome, Kate.
Kate Mandrell
Thanks for having me, Mark. I’m happy to be here today.
Mark Stiving
It’s going to be fun. So how did you get into pricing?
Kate Mandrell
It’s a great question, actually. I actually went to the University of Richmond. I majored in Leadership Studies and minored in Cultural Anthropology and Communication. So, nothing to do with pricing. Upon coming out of school, I really knew that I wanted to be in business, but I didn’t know exactly what I wanted to do. And so that is why I ended up joining McKinsey to great place to work on a lot of different really intellectually challenging and interesting projects with a range of clients and the topics that really continue to draw my attention to my focus are those related to revenue management, those related to pricing and promotions. And how can we link the value of what we want to sell to a price? Right, it really, pricing is definitely a science, there’s a lot of data to it. But there’s also a lot of art to it. And so, I think that kind of blended my background from my studies of being interested in data and analytics, but also the softer, the people side, how are people going to react? So, it was really by chance throughout McKinsey that the projects that led me to pricing, and I fell in love with it and haven’t looked back since.
Mark Stiving
Nice, nice. And so, when you left McKinsey, you jumped into your first role, director of pricing. How did you say, oh, I want a pricing role when I leave consulting?
Kate Mandrell
Yeah, that’s a great question. So, while I was at McKinsey, you know, by the time I left as an associate partner, I really focused on pricing, revenue management, and marketing and sales, transformation topics. And when I was leaving McKinsey, I was really looking for two things. I was looking for a place where I could drive transformation and change on a large scale. And the second thing I was looking for was the ability to leverage pricing and build up a team or a function around that because I saw how much impact pricing could bring to companies with just a little bit of discipline. And so, I was excited about that. And NCR was a perfect opportunity because prior to me joining, pricing was really managed by individual product manager in a kind of a cost-plus model. And so, I had the ability to come in, build a team from scratch, and totally rethink our approach to pricing, more focused again, on value, as opposed to just cost. So, it was a really unique opportunity for me to come in, build something from scratch and totally change and transform an organization that is really, you know, over 150 years old at this point.
Mark Stiving
Yeah, that’s fascinating. And so, I want to talk to you about pricing in just a minute. But I have one more career question. And then we’ll jump into pricing. How is it that you could go from a director of pricing to an executive vice president in such a huge company in only three years? So, what are the skills, the attitudes, what is it about you that made that possible?
Kate Mandrell
Yeah, it’s a great question. And it’s something I try to reflect on myself as well. I think it goes back to what I said around pricing having the potential to drive so much impact for any company if you do it in the right way. And one of the first things that I did when I came in was just looking at what is the state of where we are. And I really took kind of a whiteboard approach to say, where are the challenges, where are the opportunities? And we did some really basic things around; instead of selling individual products, we shifted to selling packages, right? So, what is the value that my customer or my consumer wants? And so, we looked, and we took the consumer and the customer lens to how we went to market that really started to drive a really radical shift for NCR without changing anything actually about our products, right? We just said we’re going to sell to you differently, we’re going to package you differently, we’re going to price you differently. And that alone made a huge difference in the way that our customers perceived us. And so, I think taking that white slate approach and really challenging the status quo was one thing that has helped.
Another thing that helped is we embedded pricing as a part of our culture at NCR. So, it was something previously said product managers would think about from a cost-plus approach. And we really made a pivot to say, not only does it matter to product managers, but this is something that should matter to sales. And so, we actually helped create, effectively, a deal scoring module that looked at pricing relative to comparable deals. And we provided real-time pricing guidance to every sales rep every time they created a quote; how good is my price relative to other deals, and then we comped them on it. So, we paid them more if they had a good price, and we paid them less if they didn’t have a good price. And that really helped entrenched pricing as part of our culture and our DNA of how we go to the market to have the best price for NCR and the best price for our customers. And so, I think the things that really have allowed me to be successful and grow in the role is to take that whiteboard approach, the white slate; how do we really drive change based on what our customers want so they can be successful? And then how do you embed pricing as a part of our culture to drive the transformational change on a broad scale?
Mark Stiving
Okay, so I’m going to offer a different opinion, if I may.
Kate Mandrell
Sure.
Mark Stiving
First off, I’m positive that you are extremely talented. I’ll bet a big chunk of it is the fact that you found yourself in pricing and so few companies really do pricing well that there was this huge opportunity to have a big impact inside this new company.
Kate Mandrell
That’s absolutely right. It’s absolutely true.
Mark Stiving
I say that in a self-serving way so that all the pricing people out there start to think, hey, how can I have an impact in my company?
Kate Mandrell
If you’re a pricing person, I think you can have the biggest impact on your company. And I think if you can find those 1, 2, 3 initiatives, the tangible impact is there. And the more that you can do to drive the pricing change, show the impact of that change, and then really embed that, again, into the culture of how the company thinks that will help your company, and it will certainly help your careers as well. So, I think that’s great advice, Mark.
Mark Stiving
So, I want to push back on something you said, and it’s a hopeful push back — you said that you made NCR’s, you made pricing part of the culture. And what I would rather have heard you say is we made value part of the culture?
Kate Mandrell
Yes.
Mark Stiving
So, what do you think about my thoughts?
Kate Mandrell
I think it’s an astute observation and probably a better word choice. I think that value… I think pricing was a part of the culture before. And it was, we’re going to sell you this product at this price. And all the negotiations happened around price. And I think by aligning our price to what the market was willing to pay based on the value of what we were delivering is how we were able to change the dialogue. So, I agree; we changed our pricing to align to value and therefore made the value of what we could deliver the focal point of the conversation versus price, the focal point of the conversation.
Mark Stiving
Nice. And so, how do you change the company’s culture or attitude to start thinking about value? Let me ask the harder question first. My experiences, most companies don’t even know what value means, right? They don’t understand how their customers perceive value. So how do you get that across to the people inside the company?
Kate Mandrell
Yeah, well, we did a lot of research upfront, right? We had conversations with our customers; we understood what competitors were doing. We really tried to see how we are differentiated, right? What do we do that is different, better, special, and that was really the focal point of where we started, right? So, there was a lot of research we did, whether it was through surveys or customer interviews, competitive research, right? That was the focal point is, what is our secret sauce, right? What’s different? and that is how we got to a bit of value. And that’s where we started to learn things like when we sell individual products to a customer, understanding the value of each one of those on a standalone basis is a lot harder than understanding them in context altogether. So that’s where we said our value is when you build all of these things together into an integrated solution, that’s where we become truly differentiated. And that’s why we pivoted from selling products to selling packages. So, it was really through that level of dialogue that helped us understand how we are differentiated. And then, you know, what are customers willing to pay as a result of that differentiated value that we provide to them?
Mark Stiving
Yeah, it sounds like one of the things I often teach people is your customers don’t want to buy your products, right? Nobody likes your product. Everybody wants a solution to a problem.
Kate Mandrell
They want an outcome.
Mark Stiving
Yeah, they want an outcome. Right? So, you guys step back to say, what are the real problems we’re solving? And the problem was bigger than the pieces. The problem was putting all the pieces together.
Kate Mandrell
That’s right.
Mark Stiving
And so, how can we help our customers solve that big-level problem instead of just the individual pieces that we sell?
Kate Mandrell
Yeah, that’s exactly right. And I think that’s where you start to change the conversation to say, to your point, let’s talk about the outcome that we’re going to deliver to you, right? We will help give you everything you need to run your restaurant operations. Rather than selling you this product for $10 and this product for $2 because assigning the value at that level is a lot more difficult than assigning value of, I’m going to run all your technology for you.
Mark Stiving
If something breaks, and you sold me pieces., now I got to go figure out what got broken, how to fix it. If you sell me a solution and something breaks, I know who I get to call.
Kate Mandrell
Absolutely.
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Mark Stiving
When we talked a little bit in the pre-talk, you talked about the value-based packaging. Is this exactly what we’re talking about or are we talking about something additional?
Kate Mandrell
No, I think this is, you know, kind of what we’re talking about. I think one of the interesting things, as we’ve made this shift, is there’s a set of capabilities that universally all of your customers are going to want. And so, figuring out what kind of that core set of capabilities we should offer to anyone. And everyone, I think is really critical. And then the next step, and that is to say, well, there’s going to be add-on packages or additions or other components that different levels of customers may want depending upon the outcomes that they’re trying to deliver. And so, one of the things that we had to do as we were making this transition is go through that process to say, what’s the value universally? And then what’s the value to targeted segments? So, I think as you go through a packaging exercise, it’s really important to understand your different segments that you’re targeting, and make sure you don’t take a one-size-fits-all approach in all cases.
Mark Stiving
I dearly love this; I think you and I are thinking the exact same way. Because once you go out and start listening to your marketplace and understanding what they value and what’s different. Suddenly you realize there are different segments out there, different people that value different things, we have to create packages, and we can create pricing and capture different pricing from those different segments.
Kate Mandrell
Yeah, I mean, if you think about, you know, one of NCRs industries that we support is hospitality, right? So, if you think about the hospitality industry, we support big customers like McDonald’s. And then we support small customers like in Midtown in Atlanta, just down the road, and a great Italian place called Echo, right? And they have just a few stores, a few restaurants in Atlanta. And so, the needs of what they have to have to operate their restaurant look very different. And in pricing roles, it’s very important for us to understand how we tailor our packages and our pricing to deliver the value and the outcome that those unique segments are looking for?
Mark Stiving
Nice. So, I’m spending a lot of time lately thinking about sales and selling value. In fact, I’m working on a book now called Selling Value. And so, I’d love to hear your thoughts on you created this new pricing strategy that we’re going to package things together and go sell value. How did you convince the salespeople besides just changing their compensation plan? How did you convince the salespeople that this was the right approach?
Kate Mandrell
Yeah, it’s a great question. And I think it’s still, frankly, an ongoing journey, right? Every time you introduce something new or drive a change, you have to have sales right there with you because they’re the face of the customer that has to be able to articulate that value. And so, what we did was a few things. One is, we brought sales in on the journey from the very beginning. So, we brought them in, and we said, hey, here’s what we want to do. Here’s why we want to do it. What do you need to feel comfortable that we’ve arrived at the right answer by the end of this exercise? And a lot of their feedback was, talk to our customers, talk to my sales team, understand the pushback that they get when they’re talking to customers. How do we manage those things? So, we brought them in at the beginning of the process versus the end of the process, so that they were a part of the transformation in the journey. The other thing that we did is we actually did some pilots, right? So, we took this package out to different types of customers as we rolled them out and released them. And we created real data points around the excitement, and the feedback we were getting, because our sales teams could then see, oh, wow, it’s working. Right? The other thing we did, we did surveys, right? So, to people that were not our customers, right? So, we did a much broader sampling of potential customers; what are you looking for? Right? What do you need? What are the challenges you face? And so, we actually leverage that data to help create talking points and help design and construct our go-to-market strategy. And so, really, along the way, we were creating those facts and the toolkits for the sales team to leverage. And then even to this day, we’re iterating. Right? You don’t go out with the perfect answer. That’s the beauty of pricing, right? It’s an art. And it’s a science, as we’ve said, and so we have to iterate, learn, take feedback, and the markets ever evolving as well, right? And so, we’ve shown to the sales team that we listen, we monitor what works, what doesn’t, and we’re open to making changes. And so, through that, we’ve been able to develop a great partnership, to kind of say we’re in this together to drive the change that we need for the organization,
Mark Stiving
I have to say my favorite words that you just said, were, we’ve shown the sales team that we’re listening, right? I think that’s so important for us, we’d be working with product management or product marketing, and we have to show them that we’re listening if we expect them to listen to us back. So, I love those words. Now, as a director of pricing, where you actually out selling the product to prove that this value selling would work.
Kate Mandrell
That’s a great question. I was not actually, and so that is part of the challenge, right? When, you know, one of the things that we did in this journey was, we were in a model where we were selling not only products, rather than packages, we were also selling on a perpetual basis rather than recurring. So, we had the one-time sale. It was kind of the selling-forget-model versus the lend-and-expand model, which we’ve shifted to around, sell them a package for a simple recurring subscription, and then find other ways to support them with additional value over the longer term. And so that was actually, in some ways, harder to make that transition. How do you change that discussion with the customer to, hey, buy this one-time thing versus really, you’re investing in a platform and an ongoing relationship? And that was part of the challenge, right? I came in, a lot of the people I worked with, they said, hey, I’ve been doing this for 50 years, I know what my customers are, I know what they want to buy, you don’t know what you’re talking about. We’ve been successful; we’re not going to change, right? And so that definitely was a challenge. And so, I had to build credibility by listening into certain sales conversations and seeing the challenges they had, so that I could be more well informed and not just sit, you know, in an ivory tower and say this is what pricing should be right. So, I think I was not out there selling, but I found ways to get that firsthand feedback by listening in on sales conversations with customers, supporting pushback that they got to really make sure that we were learning about, you know, the obstacles that they were facing. And the interesting thing is that the business leader who actually had the most pushback, the sales leader, or the most pushback to moving to the package subscription model, said that’s never going to work. We’re never going to sell that way. Today, two years later, it’s the only way he sells. He’s moved the entire business to package subscription-based models because he sees that customers resonate with the value of that model because we have a partnership, we want to provide ongoing support over that relationship, as opposed to we sell you something and move on to the next guy. And so, again, it really has been that journey. And I think as pricing professionals, we have to figure out ways to really back to the point of listening, listening, getting feedback, and putting ourselves in those tough conversations and positions that our sales teams are in so that we can earn credibility we’re driving strategy.
Mark Stiving
Absolutely. Now, you’ve said the words art and science several times in our conversation so far. And so, the science I get, that’s easy. What do you think is the art of pricing?
Kate Mandrell
Yeah, well, I think science is easy, right? You look at the data, you look at the numbers, and you figure out what the price should be, I think the art is really ascribing value to that price. Right? So, the data can tell you it’s 10.99. But why, right? What’s the value? And how do you articulate the value behind that number? Or how do you tailor that number, depending upon where the market is heading? Right? And how are things shifting? And so, I think the art really comes into play around the data tells you a number. But how do you iterate and evolve after you’ve put that number out there? Right? So, if we say, hey, this iPhone is going to be $100, right? The data may say 90% of consumers will buy this phone at $100. But then you have to take into consideration where other phones relative to my phone, right? The phone that you’re pricing? And is the value enough to justify going to that phone, right? Will consumers feel like they’re getting enough to differentiate versus the next price point out there? You have to be able to look at, am I providing enough input to what the sales teams are talking about, from, you know, whatever differentiated points exist? So, I think that it’s really around people thinking that you can go away with spreadsheets and come up with the right answer. And I actually think that it’s really 50/50 in terms of the art and the science beyond actually understanding competitive dynamics, internal cost dynamics, sales, feedback, the ability to sell, you know, consumer willingness to pay versus the next best alternative. And so that is really where the art comes in is evaluating all of those things, knowing that imperfection is okay, as long as you constantly are iterating and adjusting as the market evolves.
Mark Stiving
Okay, I’m going to answer the question myself. And I love the answer you gave because you gave me a new answer. The answer I would have given was the art is in having 100 different frameworks and figuring out which framework to apply in which situation. Now, that’s what I would have said before I heard your answer. Now that I heard your answer, which I love more than mine, I think art is understanding and communicating value.
Kate Mandrell
Yeah, I think that’s right. It’s understanding communicating value, and all the pieces that are tied to that.
Mark Stiving
Yeah, I love that. Kate, we’re going to have to start wrapping this up. But I got one more question for you.
Kate Mandrell
Sure.
Mark Stiving
What’s one piece of pricing advice you’d give our listeners that you think could have a big impact on their business? Yeah,
Kate Mandrell
Yeah, I think the piece of advice that I would have is, make sure that you’re not too internally focused. I think a lot of people get caught up in, what are my costs? How do I manage my costs? But pricing has the ability to do so much more than just make money, right? How do you drive the value? How do you drive your differentiation? How do you get your consumers to think about you differently? How do you drive the satisfaction of your customer base? So, make sure you’re not too internally focused; make sure you’re constantly keeping your eye externally, whether that be your customers, your competitors. And I think if you do that, and if you always listen, as we said, that will differentiate your business from others out there.
Mark Stiving
You know, what’s fascinating is I think, really early in our conversation, you said that you spent a bunch of time with one-on-one customer conversations, with surveys. And that’s absolutely right. We have to listen to our marketplace if we expect to understand where that value is and where the art is.
Kate Mandrell
Exactly, absolutely.
Mark Stiving
Nice job. Kate, thank you so much for your time today. If anybody wants to contact you, how can they do that?
Kate Mandrell
They can feel free to message me on LinkedIn.
Mark Stiving
Okay, we’ll have a link to your LinkedIn profile in the show notes. Episode 151 is all done. Thank you for listening. If you enjoyed this, would you please leave us a rating and a review? Speaking of reviews, David Nealy left this review on my LinkedIn recommendations. He wrote:
“Mark’s ‘Win Keep Grow’ is the best pricing book that I have ever read. It is focused on subscription services but all companies will benefit from his insight and clear writing style. Every business person should read this book today.”
Thank you, David. And I didn’t even pay him money to write that. That was awesome.
Kate Mandrell
I think I’m going to go buy copies for everyone on my team now.
Mark Stiving
Oh, perfect. Thank you. Well, this was a valuable podcast. Finally, if you have any questions or comments about the podcast or pricing in general, feel free to email me at [email protected]. Now, go make an impact!
