Impact Pricing Blog

Using Value to Break Down Silos

For several years I’ve conducted “Pricing” bootcamps for companies and PE firms.  Although they usually hire me to effect pricing strategy, what we really do is focus on how their buyers value their products.  That leads us to profitable new pricing strategies.  

However, my clients often say they received an additional HUGE benefit.  These workshops get people who are usually in tense relationships with each other working together to solve a problem that matters.  

For example, I remember walking into a room where they expected to talk about how to raise prices.  Some people came in excited to do it, while others came in adamant that we couldn’t do that to their customers.  Not a great place to start a “Pricing” boot camp.  

If we jump to the end of the story, these people left the boot camp realizing there was room to raise prices quite a bit without significantly hurting sales.  The animosity was gone.  They were working together to do what was best for the company.  

How and why did this happen?  After introspection, here is what I believe.  

We don’t start by talking about pricing.  In fact, pricing is almost an afterthought.  Instead, we laser focus on buyers and customers.  How do they get value?  This one piece of information should be foundational to most business decisions, but almost nobody knows the answer.  My clients do some exercises to begin figuring it out.  Since nobody “knows”, they all get to contribute and think.  Since we aren’t threatening anybody’s turf, they all focus on the same goal.  

Then, as we make breakthroughs on how customers value products, everyone in the room starts to see how that crucial piece of information helps them in their role and helps the company.  

When they see that some customers are receiving way more value than others, but paying the same or even less, the conversation about raising prices happens naturally.  Then they realize they should be paid more for all of the value they deliver to almost every customer.  

Think about all of the decisions besides pricing that cause conflict inside your company.  Which features should development prioritize?  What market segments should you target?  How should you package your products?  Different people have different opinions based on what makes their job easier.  But if you can change their thinking from “what’s easy for me” to “what delivers the most value to customers,” you reduce conflict, build teamwork, and most importantly, motivate decisions that are best for your customers and your company. 

Value is the key. Focus on how customers perceive and receive value.  Your company will operate more smoothly and growth will accelerate.  If you’d like some help, please reach out to us. 

Share your comments on the LinkedIn post.

Now, go make an impact!

Tags: pricing, pricing foundation, value, value foundation

Related Posts