Impact Pricing Podcast

Marina Dias has been in the pricing industry for almost ten years. Currently, she is the senior pricing expert and consultant at Competera, a company that helps retailers and brands to increase customer trust by setting and maintaining optimal prices in real-time.

In this episode, Marina explains why constant communication with clients is essential in creating pricing strategies. She also enlightens us on the concept of price elasticity, and why understanding it is especially important in this time of inflation.

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Why you have to check out today’s podcast:

• Learn the importance of having constant communication with your client about pricing strategies despite the widespread of AI and pricing software
• Understand the concept of price elasticity
• Find out how you could adjust your prices in this age of inflation

“Think about governance; and don’t forget that pricing, at the end of the day, is about people – our customers, our colleagues, and our internal resources of an organization.”

– Marina Dias

Topics Covered:

01:01 – How Marina got into pricing

02:58 – Why more than just dealing with numbers, pricing is an art

07:12 – Why talking to clients about pricing strategies is still important despite the widespread of AI and “black box” pricing software

10:35 – Competera‘s advice to their clients with regards to dealing with inflation

14:06 – Pricing shall be focused on experience at all times, but pricing strategy and processes are critical in this time of inflation

16:15 – Defining price elasticity and the different factors that affect it

19:37 – Understanding elasticity, and how it plays a vital role in a company’s decision making

23:21 – Pricing table topics: “Don’t raise prices on subscribers who aren’t using the product.”

27:09 – Marina’s pricing advice

Key Takeaways: 

“I would say that we cannot apply stoicism when we are working at our daily business, because it’s something that if we forget about the things that we cannot control, they will control us.” – Marina Dias

“People migrate between brands. People migrate between competitors. People have the decision at the end of the day, but we have the power to influence. It’s one of the variables that we cannot control, of course. It’s our costumers’ behavior, but we have the power to influence this through pricing.” – Marina Dias

“At the end of the day, elasticity… it’s only a number. But it can help us to drive to have scenarios in our hands and to be able to support our decision making.” – Marina Dias

People / Resources Mentioned:

• Competera: https://competera.net/

Connect with Marina Dias:

• LinkedIn: https://www.linkedin.com/in/marinandias/

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.)

Marina Dias

Think about governance; and don’t forget that pricing, at the end of the day, is about people – our customers, and our colleagues, and our internal sources of the organization.

Mark Stiving

Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the familial relationship between them. I’m Mark Stiving, and today our guest is Marina Dias. And here are three things you’d want to know about Marina before we start: She is the senior pricing expert and consultant at Competera. She’s been in pricing for almost ten whole years and she likes to read philosophy. She is a deep thinker. Welcome, Marina.

Marina Dias

Thank you, Mark. Thank you for having me here.

Mark Stiving

It’s going to be fun. How did you get into pricing?

Marina Dias

I started as a junior pricing analyst at a company, but I really didn’t come from a management or within a background of economics. I studied environmental engineering, and in there I started to understand that continuous improvement and Deming cycle applied to sustainability can have a relation when we start and when we are managing pricing within a company.

So, my first experience was as a junior environmental engineer, translated to a company and starting to have a blank sheet to work with in the pricing. Of course, with my bosses and the people who were in there, but it was from scratch by doing everything: strategy, processes, systems and all the management of trying people to fall in love with pricing and people to understand the capabilities that pricing can give them and can increase also into the business’ different metrics.

Mark Stiving

So, in the very beginning, you took a job as an environmental engineer. They gave you a product or something and they said, “Here, you have to go put a price on it”. Is that right?

Marina Dias

Not at all. So, I did my master’s thesis and I was like an environmental engineer, and I entered the company as an environmental engineer to start to work within an omnichannel perspective broader than pricing. But they understood that since I have studied a lot of mathematics, a lot of things that can be directly connected, they pulled me aside and said “Okay, we have to structure something regarding pricing. So, you will start to work as a pricing project manager, as a pricing analyst. First, use the mathematics.”

Mark Stiving

That’s perfect. And I usually get a chance to talk to my guests for just a few minutes before we hit the record button. And we spent 30 seconds talking about art versus science and pricing. And so, it’s so fascinating because you’re brought in because people look at pricing as a science, right? You’ve got this math degree. And so, it’s got to be science, right? It’s all numbers. And yet, over the course of your almost ten years in pricing now, how much of it has become an art for you?

Marina Dias

It has been becoming an art from the moment that we start to think about people. And when we think about people, we think for some clients and how we can translate within the pricing strategy, the ability for our clients to buy more and more and more, and to keep the brand perception. But at the end of the day, let’s look internally. So pricing, it’s about people who work at the company as well. It’s something that when we start to do a change management within the pricing area, it will involve everyone. And it’s a great feeling for the majority of people when we think about salespeople, online marketing, everyone has an opinion on pricing.

And that’s the bridge on the art side, the art from the perspective of how to listen to everyone’s opinions. Because at the end of the day, also the people that work within the company, they are the costumers as well. So, how to listen to everyone, how to listen to their experiences, to their shopping behavior, and how to gather these – I will say, and it’s not formal information – it’s more informal information to the pricing strategy. In that, it’s an art. And it requires us to be almost like psychologists because it’s ability to listen that is not listening through a database, but it’s with our soul. At the end of the day, it allows us to see more than the data, more than ability of cross-checking tables and cross-checking information and having all the statistics, and a lot of models. No, it’s the ability to really have the client talking to us, and how to look at the price at the end of the day for a product and say “This makes sense. Besides all the forecasts, I know that this price for this product that can be impacted and in fact, a lot of things make sense.”

Mark Stiving

Okay. I am so shocked to hear you give that answer. And by the way, I love the answer, but I am shocked to hear it. And here’s why I’m shocked: First off, you are a mathematical, quantitative type of person. Secondly, you work for Competera. And when I looked up what Competera does, you guys are essentially doing data analytics for retail. And when I asked you what you’re passionate about, what we’re going to talk about, is price elasticities. So, all of this says number, number, number, number, number. And now we’re talking about “Oh, it’s change management. It’s the soul of pricing. It’s talking to different people.” And you’re spot on. Both sides are really important. I was just shocked that you brought that up first. Awesome.

Marina Dias

Yeah, from my experience, and I’m feeling it right now in Competera, although we have a pricing tool that is able to help retailers to grow margins, to grow revenue, we do a lot of calls with clients, so we spend a lot of time listening to the clients and to be able to, together with them, to build the pricing strategy. And sometimes, all the concerns and everything that is connected with the concerns, it’s not only numbers, it’s not only these need to grow for market share and need to grow for margins. It’s almost internal doubts because they read a lot of papers from McKinsey, from BCG, and a lot of information is flowing on their minds. And sometimes, they need to talk to someone who is able to design everything and to put in place a pricing strategy with a tool that is able to execute and support. And this is something that we are only able to do because we are able to listen and think together with them and challenging the customers also.

Mark Stiving

Yeah. I think it’s interesting. And I hadn’t thought of it this way until you just started speaking of this. Companies don’t want to buy pricing software that is just a black box. They want to know that there’s strategy and what the strategy is. And yet, in this world of AI and all this capability that we have, essentially, we want to build a black box to say, “Look, we can help you make these decisions without you having to be involved.” And so, there’s this real fine line that you’re walking between black box and someone in the company directing the pricing strategy. So how do you walk that line?

Marina Dias

We don’t pretend to have black boxes in the way that all the variables that may influence pricing are somewhere and not controlled by anyone. This is not the goal. The goal is to have science and to have processes and information to help us with the calculations and with the assessment of how these variables can impact our pricing decisions. This is something a little bit more mathematical. But in terms of defining which variables and which type of bond duration, which type of value, they may translate into the pricing strategy, that is something that from scratch, we need to talk with people. We need to assess.

If you allow me, let me build a bridge between this and the thing that we were discussing, that I’m a little bit passionate about – philosophy. If we think about stoicism, we have the concept that for us to be happy, we need to be within a network state of mind. That is, we need to only concerned about the things that we can control and forget about the ones that we cannot control. When we think about pricing, when we think about models, of course, as a company, we have a lot of variables that we can control and we have a lot of things that internally we can also measure. The data science and the ability to look at the world, look at historical data, it helps us to look at the ones that we cannot control. So, I would say that we cannot apply stoicism when we are working at our daily business, because it’s something that if we forget about the things that we cannot control, they will control us. And that’s something that data science helps us. It’s to be able to measure the impact of the things that we cannot control, but that we can influence at the end of the day. And the potential of the influence is something that we can learn out of the black boxes, but the black boxes are statistical models. So, if we are open enough and courageous enough to deep dive on them and sometimes to speak with the data science team, to think together with them, this is crucial not to have a relationship about “they are a costumer” and or “am I a customer of the data science team?” This is not the goal at all. The goal is to talk with them, think together with them, and to build the models together, meaning that at the end of the day we know all the variables and we are able to understand the impact of these variables and how they can influence our price decisions.

Mark Stiving

So, I think that was a fabulous answer. Now, let me just toss out something that we have no control over and just tell me what you think about it and what you guys are advising companies to do, and that’s the fact that the world is facing inflation today. Our costs are going up, our competitors’ prices are going up. What are you coaching people to do today?

Marina Dias

It’s the ability to understand first the things that we can control. And by saying that, it’s the way that we buy our products and our relationship with the suppliers. So, first of all, the focus is on the variables that a company can control. But at the end of the day, let’s understand and let’s put the effort in trying to understand how these evolved and how costumers are evolving also in terms of their purchase behavior. If we need to click on different buttons and different buttons that increases and or at least helps to keep the interest. By buttons, I mean promotions; a way to communicate investment on the digital marketing, but not being afraid on sometimes increase prices still on specific articles that are only not connected. I’m seeing price increases not only connected with the cost-plus strategy, but also from the perspective of assortment mix. Still trying to find opportunities to increase price, having no fear to do it. But on the other side, the articles that generate price perception invest on being competitive, invest on having something to the costumer that can create value to them.

But this is only from a price perspective, of course, in these times, we need to think about it with a broader vision. We need to think about the company as a service. We need to think about all the things that can complement and to be able to be exceptional on those so that the price will be from the inflation perspective, the first thing that people will care about. But if we try to complement service with after sales and with a lot of things, of course this can try to minimize and create a trust relation between a company and if we can think about retailers as an example, and the final costumer in keeping this frequency of purchases as a relation.

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Mark Stiving

So, what I find so funny about the answer that you just gave is we often hear pricing people, consultants say “Hey, we have to raise prices, so we should start to focus on value. So, what are the services that we could provide? What are the other things that we could do and make sure our customers perceive our value?” And by the way, I think that’s right. But why don’t we do that when we’re not raising prices? Why don’t we do that all the time and build a competitive advantage? It isn’t inflation that should be driving that. It should be just standard business practice that should be driving that.

Marina Dias

Totally agree with you. I totally agree with you. And sometimes, I feel like doing that within the inflation period. It creates a focus on the things that we should be focusing right now. So right now, probably we should think about services and trying to improve, but not to look at it as something that “Okay, we will invest our time and we will forget about prices and pricing communication and pricing analysis because I want to put flowers in all of our services.” No, this is something and I totally agree with you that we should do for all the time focusing about experience. But pricing should be something that we also focus on all the times, but especially on the inflation, because it’s the first driver of the impact of the inflation in our in our P&L at the end of the day. It’s the first driver. And so, we should focus on experience, yes, but pricing strategy and pricing processes, internal pricing processes are critical at these times and the ability to decide quick and that the science to support this decision – not a “good feeling” decision, it does not make sense to have “good feeling” decisions at this time.

Mark Stiving

Yeah, I think what inflation does is it makes pricing more of a priority because all of a sudden, companies feel like they have to raise prices. So, they’re thinking about “What happens when we raise prices and how to customers perceive that or respond to react to that?” I think it raises it in the importance level inside a company.

But I want to ask you a hard, technical question. You ready? You’re going to love this one, I hope. One of the things that you wrote when I asked, “What are you passionate about?” is you said, when you talk about pricing elasticity. I’m not a fan of pricing elasticity for lots of reasons. But here’s the hard question for you: What if prices around the world go up 10%? I raise my prices 10% and my demand doesn’t change at all. Because it’s just a product that people have to have and they couldn’t go buy it somewhere else because everybody else raised prices. And that’s just what inflation did. What does that do to price elasticity? Because it looks like we’ve got a completely inelastic product. Shouldn’t we now raise our prices 10% more?

Marina Dias

That’s a question assuming that it’s one size fits all, of course, because if you only think about it, all the mixes that we can do and all the substitutes and all the cannibalization effects that we can influence. But I would say that elasticity is not only the behavior – although mathematically it is – but it’s not only the behavior of “Okay, let’s increase prices and demand will be stable or can decrease a little bit.” It’s not only that, because a lot of factors may influence that. So, if everyone increases the prices and the demand is still stable. Of course, if we look at the harder perspective, we can get a conclusion regarding elasticity. But all the things are influencing that in terms of how the communication is being done by everyone, how the weather is going to be, how the war effects are contributing. It may not be translated directly to the demand and to elasticity concept as well, but for sure it influences. And for sure it’s something that, although we cannot measure directly, it’s something that will contribute.

So, the relation of looking at the elasticity as a number and on this number let’s put a forecast, let’s make a promise to our CEOs and to our all of the directors that we will sell these quantities. This is not true. It’s a number based on historical perspective. So as soon as we raise the prices, we don’t know the effect. We can try to simulate and have different scenarios in there, but things will for sure change because some of the competitors may start to communicate vouchers, promotions, a lot of things, a lot of things within the social media that suddenly prices are not the top of mind think. And they change to those competitors and they start to feel that the products are elastic again. So, it’s a lot of variables that can influence this perspective of demand and elasticity due to price increases or decreases, I would say.

Mark Stiving

Okay, although I love your answer, I’m still not sold. I think of price elasticity as something economists came up with to talk about industries, right? So, what happens to the demand for gas when the price goes up 1%? And that’s an overall industry. And I find that we use it in companies saying “What happens when I raise my price 1%? What happens to my demand?” And that doesn’t take into account all of the things you just talked about. And so that’s why I get so frustrated by companies using price elasticity, or I’m totally okay saying “Look, let’s forecast what we think responses are going to be to demand when the following things happen.” And so, having the tool that says, I’m going to predict demand based on my competitor doing a promotion, that’s actually going to affect my demand when that happens. And I think that’s a much easier way to think about it than thinking of it as “When I raise my price, this is what happens to demand.”

Marina Dias

I would say that sometimes somewhere, someone in my life, a CEO from a company where I worked, he mentioned that sometimes it’s better to have a number. Probably it’s not the perfect number, but it helps us to at least to structure scenarios that rather than not having anything. So, I think elasticity is a concept that if we are able to use it wisely, we will get information from that, especially if we combine this with the data science’s ability to work within all the factors, all the impact of the factors that can influence and be influenced by our prices. This generates value at the end of the day for a company.

I totally agree with you that we cannot look at these electricity and quantities that we are forecasting as a promise and predict our P&L based on that. This is not something that makes sense, but at least it helps us to understand price perception, how costumers can react and how we can impact at the end of the day, how we can have our decisions being measured, and our decisions based on scenarios. So, it’s something that helps to build scenarios and to decide and to create different combinations of variables and to be able to assess them, to have a decision that is not a gut feeling decision. But it’s not a promise and something that we need to say “Okay, by dropping prices 1%, we will settle for a lot of quantities” because it’s difficult. It’s not the relation if we think about the retailer, it’s not the relation of a retailer with the customer. It’s also the relation of the retailer with the supplier. And it’s a cycle. So, that influences. And at the end of the day, elasticity, yup, I agree with you, it’s only a number, but it can help us to drive to have scenarios in our hands and to be able to support our decision making.

Mark Stiving

Okay, I will agree it’s just a number, and that if people know what it means, I’m fine with them saying “Oh, here’s where our elasticity is.” I just think most people don’t know what it means when they look at that number. I think that’s the that’s the challenge I have.

Marina Dias

Yeah, it makes sense. It makes sense in that part. I agree with you because you cannot touch it. And most of all, it’s based on historical data. It’s based on the past.

Mark Stiving

And it doesn’t take into account competitor reactions.

Marina Dias

It can.

Mark Stiving

Unless we assume the competitor reacts the same in the future as they reacted in the past.

All right, Marina, we’re going to have to start wrapping this up. This is fascinating. I could talk to you for a long time. But first thing we have to do is we have to play pressing table topics. I warned you ahead of time. Just so you know, Marina had never heard of pricing table topics, but I’m shuffling up my cards. You could just see the nerves on her face right now.

Marina Dias

I like this.

Mark Stiving

But you are going to get the five of spades. Oh, well, this may not fit you, but I’m going to give it to you anyway. Don’t raise prices on subscribers who aren’t using the product.

Marina Dias

Let me just write it because it’s not directly connected with my experience within the pricing. So, it’s prices on the services.

Mark Stiving

Right. And so, this is more about subscription businesses.

Marina Dias

Okay. But first of all, I think I can build a bridge here.

Mark Stiving

Of course.

Marina Dias

My bridge, it will be with retail, the ability to understand price perception from people that never went to our stores. And sometimes, I felt specifically in one of the companies that I worked that we are measuring our NPS, we are doing a lot of questions on the pricing, how customers perceive the prices. But we did not care about people who never went to the stores. But this people know the brands. They know the brand. They have a perception. They have an idea. And when the card says “don’t raise prices on someone who never used the product”, I cannot disagree more because if people did not use it, we need to catch them and captivate them and to try to get their opinions straight to get close to us. So, we need to do pricing movements, I would say. I don’t know if you want to say something.

Mark Stiving

No, that was just to say you made one minute.

Marina Dias

Okay. And by raising prices, probably we will hear a lot of noise, like we will start to read on the news that “These brands raised prices. These brands are doing these price movements.” So, this is publicity. This is a way of reaching these people to generate curiosity. But at the end of the day, okay, we decided to do it. But we need to deliver value. We need to deliver experience. We need to deliver the perfect thing that people did not know they wanted. We need to deliver. So, sometimes, raising prices and having awareness on this price raise, it can be good and can captivate someone who would never used our product because they will be able to get to know us. Although the idea, the first idea will not be good, but they will get to know the company and that we need to do the prep. We need to make sure that everything is easy to translate between the value and the price that they are going to pay. Same for companies that are measuring the NPS only based on their current customers. They need to listen to the ones that are not customers yet, and sometimes to raise prices to create awareness. But to listen to someone who is not our friend, I think that it can create us access to help us at the end of the day, to help us to improve and to help us to grow as well.

Mark Stiving

Alright. You took 2 minutes and 50 seconds for that. But I love the fact that you tried to apply it to retail. Excellent attempt, thank you so much. For everybody else in the audience, if you want to play pricing table topics, you can grab a deck of our cards off our web page. It’s at impactpricing.com/merch. And so now, Marina, last question. What’s one piece of pricing advice you would give our listeners that you think could have a big impact on their business?

Marina Dias

Pricing is about governance as well. And probably it’s the most important topic when we start on when we are doing a price movement or a price improvement on our companies. Think about governance and don’t forget that pricing at the end of the day is about people, our customers and our colleagues and our internal resources of the organization.

Mark Stiving

Right. In fact, we started our conversation with exactly that and all the different people inside the company. And so, making sure that everybody is bought in and they know what their role is. Makes a lot of sense.

Marina Dias

And that they are aligned.

Mark Stiving

Marina, thank you so much for your time today. If anybody wants to contact you, how can they do that?

Marina Dias

They can contact me through Competera, through email. I don’t know if I can say my email.

Mark Stiving

You can if you want. Or we could say LinkedIn. They can find you on LinkedIn?

Marina Dias

It’s Marina Dias. And if you write pricing, probably you will find me a blunt, a little bit more blunt, but it’s me. I promise. It’s me.

Mark Stiving

Alright, episode 199 is all done. Thank you so much for listening. If you enjoyed this, would you please leave us a rating and a review? The easiest way is to go to ratethispodcast.com/impactpricing. And finally, if you have any questions or comments about this podcast or pricing in general, feel free to email me at [email protected]. Now go make an impact.