John Mansour founded Product Management University to unlock one’s full growth potential by making quantifiable customer outcomes the starting point for everything.
In this episode, John explains the concept of buyers trading money for value. Therefore, it is crucial to consider the quantifiable value aspect, as it forms the basis for developing effective pricing strategies.
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Why you have to check out today’s podcast:
- Understand why it is crucial to prioritize providing value to customers when a company’s sustainability is on the line
- Learn the difference in measuring quantitative value in B2C and B2B contexts in order to effectively deliver the value and achieve the desired outcomes for your customers, and price your offer accordingly
- Discover how to identify the most straightforward quantifiable value component and use it as a foundation to develop the optimal pricing strategy
“The quantifiable value piece is so important in what we do, which is, if you can quantify a unit of value to the customer for what your products are doing, that is a good starting point to figure out your pricing.”
– John Mansour
Topics Covered:
01:31 – Reading a snippet from John’s LinkedIn About Section
02:04 – What prompted him to conceive that idea in his LinkedIn About section?
04:56 – Why often customer value comes only secondary to most companies
06:49 – A matter of a discovery journey and digging down the customer’s why
09:28 – One key thing to understand when dealing with your customers’ key decision makers for your questions to be relevant to them
11:17 – Quantifying value in B2C versus B2B
12:52 – Ways to measure quantitative value
15:03 – Measuring quantitative value other than in dollars
19:26 – A process for identifying quantifiable value [case studies illustrating this]
22:43 – John’s best pricing advice
Key Takeaways:
“If you deliver quantifiable value to the customer, it’s going to come back to you in spades to your own organization and support whatever your strategic goals are.” – John Mansour
“It’s a matter of just understanding what their priorities and their agenda is. Because if they’re going to trade value for money, we have to understand what’s valuable to them and how it can be quantified.” – John Mansour
“The dollars aren’t always at the forefront. It’s the impact that you have on things that are important.” – John Mansour
“The more you can quantify those units of value, the easier it is to come up with a price that you can sell because you’re selling the value.” – John Mansour
Connect with John Mansour:
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.)
John Mansour
The quantifiable value piece is so important in what we do, which is, if you can quantify a unit of value to the customer for what your products are doing, that is a good starting point to figure out your pricing.
[Intro]
Mark Stiving
Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the direct relationship between them. I’m Mark Stiving, and our guest today is John Mansour. Here are three things you want to know about John before we start. Most importantly, he has a bachelor’s of science degree from the Ohio State University, which shows you that he’s brilliant. He’s been running the product management university since 2001, and he had real experience before that in both product management and product marketing. so I can’t wait to hear how he puts it all together. And oh, by the way, he claims to be a kitchen hack, a real foodie, and he makes stuff in his kitchen that you and I would just buy at the grocery store. Welcome John.
John Mansour
Thank you. Nice to be here.
Mark Stiving
Hey I want to read the first paragraph of your About Section from LinkedIn. Just because I thought it was so beautiful. And it’s exactly the way I think too. So he writes, ‘Imagine your growth trajectory of product management, product marketing, sales, and customer success teams we’re completely aligned to a common view of the customer, focused on customer outcomes with quantifiable strategic value.’ Now, I thought that was brilliant. And I have to say, the only thing missing is the word pricing in there.
John Mansour
It was a shocker.
Mark Stiving
Exactly. How did you get to this view because I think you and I think almost identically about this?
John Mansour
So, over the course of my practitioner experience, and I would say probably one of the last couple of gigs of mine as a practitioner, I worked for a company that just really understood the whole, like, getting everybody aligned to the customer focus. It was a ‘culture’ thing. And over the course of my 22 years of training, a handful of customers I’ve seen do the same thing. And it’s like everything in the company revolves around delivering measurable value to the customer. And then the whole culture is built around that. And everybody, it doesn’t matter which discipline you work in, it’s understanding that as long as you’re delivering value to the customer, everything’s going to be okay. Dot com recession in 2001 was when I started the business.
We had the 2008 recession. We’ve had a few bumps in the economy since then. Pandemic being the most recent. And the companies that really get this, they don’t ever lose money, or it’s not negative growth. They might not be growing at 20 or 25%, but even during a recession, they’re growing at 12 or 15. Right. Which most people would take. And so to me product management is obviously the core of everything because everything starts with the product. But it’s like, if you deliver quantifiable value to the customer, it’s going to come back to you in spades to your own organization and support whatever your strategic goals are. And it’s the reverse of how most companies think, right? Because you got investors saying, you got to hit certain plateaus and do this and do that. And it becomes all about how we’re going to make our numbers as opposed to, let’s start with how do we help our customers make or exceed their numbers or make them better at what they do, and then figure out how to take those solutions to market in a way that comes back to us to support those goals.
So it’s just kind of a reverse way of thinking. But so much of how my training and stuff has evolved over the years has totally been shaped or inspired by my customers and the successes they’ve had. And I’ve seen it work in far too many cases to know that, I mean, it’s real. It works.
Mark Stiving
Yeah. So I want to ask by the way, this isn’t going to be easy because I’m going to ask you hard questions and I call them hard because I don’t know the answers. How’s that? So, I recently have come to the conclusion that this one phrase, buyers trade money for value is the underlying, let’s call it the first principle of all business, right? If we’re not delivering value to customers, they’re not giving us money. And so we’re out of business, right? So buyers trade money for value. And this is so fundamental or foundational. Why is it that so many companies ignore the buyer, ignore the value to the buyer.
John Mansour
I honestly don’t know if I have an answer to that, Mark, because it does seem so incredibly obvious. And this gets back to when I look at how companies do strategic planning and how that affects product management, it is completely inside out, right? They start with, let’s look at our corporate goals, right? We want to grow by X percent. it’s where we are here in 23, so we’re going to grow by, we need to grow by X percent or hit these revenue goals in 24, right? We need to think about more adoption and retention and market share and whatever metrics are important to companies strategically. And then everyone’s like, okay, how are we going to help our company meet those goals? And then in my mind, customer value becomes secondary. You’ve probably seen this a lot too, because somehow it’s easy to convince ourselves that something we’re going to do that has value to us will be value to the customer. Like, oh, we need greater adoption for our products. Well, let’s do all these things to try to get greater adoption. But we haven’t thought about trading value for money to get greater adoption. That seems to be the absent part of the equation.
Mark Stiving
Yes. And since you’re on the product management side of this let’s talk a little bit about product and product development or roadmaps or feature prioritization. Customers are always asking us for things, right? Can you give me this option? Can you make it do this? Can you paint it this color? Whatever that happens to be. AndI think companies just say, oh, that means value. That means some willingness to pay for that. How do we get them out of that mode of, I mean, it’s almost the opposite of what you want. It’s almost exactly what we’re saying, but it’s not. What we’re saying is listen to the customer for the value and not listen to the customer for the requests.
John Mansour
Yes. So you’ve heard this a million times from lots of people in our profession, customers don’t know what they want. And in many cases that’s true. But here’s what they do know. They do know what they need to accomplish and why it’s important, and they know what success looks like. And I think it’s not just product management, it’s product marketing, it’s sales, it’s even customer success teams doing strategic account management. We don’t ask why. Why do you want the button red instead of blue? Tell me what you’re trying to accomplish. Tell me why that’s important. Give me the big picture. We don’t ask enough questions. And it always gets back to that whole discovery thing. And again, not limited to product management, because I spent many years as a pre-sales, solution engineer.
And actually when the pandemic hit, I did a little fractional work for one of my clients. They lost their SE and asked me to come in and pinch hit. So I’m doing demos again 30 years after my first software job. And nothing has changed. We go into the sales cycle and we ask questions to prospects, just like product managers do to customers to validate something we already think or have in mind, right? I call it leading the witness, right? If my product helps you be more efficient with your data in a single repository, it’s Mark, tell me what kind of problems you have with data all over the organization instead of just Mark, you’re the head of the loan origination department. Tell me what’s on your A list and why it’s important to the company. And just let’s talk about the business. It’s a skill. There’s a big opportunity. I’ll just say that across all the customer facing functions to have business conversations, to do discovery, instead of, I want to ask you questions to verify that you have problems my product will solve.
Mark Stiving
Yeah. So one of the things I often think about when we go in to ask these questions is what does the person across the table… What are they thinking? So they know who I am, they know what I walk in with, what capabilities I might have. I mean, not that well, but they have an idea.
John Mansour
Sure.
Mark Stiving
And when I ask the question, what keeps you up at night? They’re like, yeah, yeah, yeah. That’s like a stupid question, right? Let’s get into something that’s meaningful and important. And it almost feels like the questions we ask have to be really relevant to them, and they believe they’re relevant to us. Go ahead and address that for a second.
John Mansour
Um, that’s a great question. And here’s what I tell every product manager, every product marketing manager, every sales person, every customer success manager, your economic buyers or the decision makers in your existing and or target customers, they have compensation tied to results, also known as outcomes, right? So when you are talking to folks at that level, the most important thing to understand is what is on their A list or on their agenda, because they have compensation tied to it at any given year, and understand why those things are important to their function or their department, and even in the bigger picture why they’re important to the organization, right? And it’s like, okay, Mark, I know top priority for you is employee retention, but as a manufacturer, tell me, give me some context around why that retention is so critical to a manufacturer, right? And we’re not having those conversations, right? Tell me what you’re losing sleep over. I mean, that could be anything that’s like, hey, Mark, tell me what your biggest problems are. Well, how much time do you have?
Mark Stiving
Right.
John Mansour
And so it’s a matter of just understanding what their priorities and their agenda is. Because if they’re going to trade value for money, we have to understand what’s valuable to them and how it can be quantified. And most of the time their agenda can be quantified if they have compensation tied to it, it’s something that’s measurable.
Mark Stiving
Okay, you have said the word quantified. Oh, 20 times since we’ve started. And by the way, I love that. Don’t get me wrong. Right? Let me start with the following. Can I quantify value for B2C companies or only for B2B companies?
John Mansour
I played in the B2B space, and what I can tell you is in the B2C space where the user is the buyer, we buy what we want and then somehow use logic to justify it as consumers. I just bought an iPhone 14, but I want a 15. Right? I don’t really have to justify that to anyone other than my own family if I’m married or whatever, but if I want one, I’m going to go buy one. Right? I do that in the business world, you can’t do that. And that’s what makes it different. The definition of customer is very different in a business because there are three layers there. You’ve got the C-suite, you’ve got the department heads, then you’ve got the users down in the trenches. And so the people who eventually sign the contracts, there has to be value there for them, okay? And I always say my two line product management job description is we have to make users better at their jobs in ways that have strategic value to their organization. And then we got to take them to market in a way that brings strategic value back to our organization. Right? That’s kind of the bottom line in my mind.
Mark Stiving
Yeah. Nice. Okay. So I’m totally with you. It is so much easier to quantify value when we talk about B2B. Now, if we’re going to talk about B2B, especially if I’m trying to justify this to the C-suite, I’m trying to get the purchase order approved, do you always bring it back to dollars? So are you measuring quantitative value in dollars? Or is there some other way that you measure quantitative value?
John Mansour
There are a lot of ways to measure quantitative value. I mean, at some level it’s all going to come back to dollars, but the dollars of it might not be what’s top of mind for someone, but in one way, shape, or form, it impacts the dollars, right? So quantifying value just depends, like, okay, if you’re selling something to an HR department, how do you quantify turnover, right? Every industry has some metric. Like, here’s what it costs to hire and train a customer service rep in retail. Here’s what it costs to hire an assembly line employee in manufacturing, right? So measurements for turnover, right? So if turnover is a big deal, there’s ways to quantify that, right? how do you measure compliance solutions in the finance department, right? I mean, how many times did you go outside the lines or this or that? So there’s ways to measure those things that eventually impact something that impacts dollars. Okay? So it might be a couple of degrees removed. and that’s why to me, the whole understanding of what’s driving the organization strategically is where discovery starts, because that’ll lead you down to the departments and the jobs and the workflows that have the biggest impact on something up here.
Mark Stiving
Yeah. So I often think there’s potentially a huge difference between the user, even if the user is part of the purchase decision or part of the decision. There’s a huge difference between what the user values and what the company values, or we’ll call it the buyer values. I think eventually the buyer has to go to dollars, right? There’s no choice. We have to go to dollars. No company’s going to buy something from us if we’re not making them more profit by buying it.
But on the other hand, if I’m selling to a doctor in a hospital, right? The doctor couldn’t care less if the hospital makes more money, but the doctor does care about how much time they get to spend with the patients, or what’s the efficacy of this new procedure, or there’s things that that doctor really values. And so yes, we need to step outside the dollar thing once in a while, but we have to understand the dollar thing. There’s no doubt.
John Mansour
Yeah. But, so let’s take your example, right? The doctor doesn’t care about the dollars, the doctor cares about the patient outcomes and so on and so forth, right? And so the hospital cares about its reputation, and especially these days where, you know the healthcare system in the United States, at any rate, you get paid for patient outcomes not just for services rendered. So like I said, it might be a few degrees removed, but hospitals either aren’t getting paid all they’re entitled to, or it takes them longer to get their money, or it costs them more money to get their money when patients don’t get the outcomes, right? So the doctor who is caring about a certain thing in the efficacy of a procedure, like I said, it might be a few degrees removed, but it comes back to the reputation of that organization. And somehow other dollars may come into play. They might not be first and foremost, but somewhere in there it’s impacted.
Mark Stiving
Yeah. As I’m thinking. I want to bring something up and when I put myself in the shoes of product management and I go out and I talk to a doctor, I personally could say, yes, the patient outcomes I know are going to end up driving value to the hospital. So I don’t really have to go put that in dollars right away. But if I’m a salesperson trying to sell, I actually want to use that doctor and say, okay, so let’s try to quantify the dollar value so that we can go to hospital administration and let them know this is a really smart decision for many reasons.Would you agree with that?
John Mansour
No, I wholeheartedly agree with that. And I’m going to take the sales situation right back to product management before we build that product for the hospital. We should know what the metric is, right? We don’t know the number, but we should know what the metric is that impacts that’s important to the hospital before we build the product. That way we can equip our salespeople and in the ideal world, you, when you launch this product, you launch with a couple of customer testimonials who will say, yes, it’s had this outcome and here’s the impact of it. We ideally equip our salespeople with that. But even if we don’t, salespeople need the story behind the reason customers buy it is the reason we built it. There’s no difference there. The only difference is we didn’t have a product. Now we do, right? And so the reason we build it is what I should be selling with that outcome in mind. If product development starts with that outcome, then that’s what I should be selling. I should be leading with the outcome, why it’s important to the hospital and why you can’t get there, and how our product helps you get over the hurdles to that outcome.
Mark Stiving
Yes. And so I want to step back again because I’m not sure what I said was right. And so now I want to change my own mind, if that’s okay.
John Mansour
Oh, I missed that.
Mark Stiving
No. I think that as a product manager, when I go talk to a doctor, I don’t need to know the profitability to that hospital of this outcome. But I do need to know the profitability in general to hospitals, otherwise, why would I be building this product? And soI don’t want to imply that product managers don’t need that quantified value in dollars, but I don’t need it in every interview, in every customer or potential buyer interaction.
John Mansour
You’re a hundred percent correct. And in this hospital example the dollars, like I said, might not be at the forefront, patient outcomes might be at the forefront, and that’s where the quantification is, right?
Mark Stiving
Yep.
John Mansour
The executive suite and the people who make the buying decisions will understand the dollars behind that. So the dollars aren’t always at the forefront. It’s the impact that you have on things that are important to the hospital now, right? I mean, money’s always important, but if you’re selling to the head of all clinical operations, right? The reason that person’s in that position is to make sure the hospital’s doing everything it can to get the best patient outcomes, right? And so understanding where the hurdles are to getting patient outcomes in a million situations and how your product eliminates those obstacles to me the quantifiable value is there.
Mark Stiving
Yeah.
John Mansour
And dollars might not even come into it.
Mark Stiving
Do you have a process to teach people how to find quantifiable value?
John Mansour
Yeah.
Mark Stiving
Can you share? Or is that proprietary?
John Mansour
It’s not proprietary. You ask, right? I mean, if you’re the doctor, Mark, and I’m selling you this thing, and I say, Mark, when you’re doing this procedure as a heart surgeon, tell me what success looks like. How do you know that the procedure was more successful than what you’ve been doing?
Mark Stiving
That just seems way too simple.
John Mansour
Yeah.
Mark Stiving
You can’t get paid teaching people that, that’s all I just wanted. I just want to say that.
John Mansour
Well I keep thinking, and I’ve been saying it from the day I started this business, what I’m teaching you is not rocket science. It’s common sense, but we somehow get lost in all the technology and this and that, and somehow common sense it can get lost. And it’s to me it’s just, it really is simple. They’ll give you an example. So one of my clients, literally yesterday, right? They target community banks and credit unions. So understanding what’s going on in the market now with high interest rates, right? These banks and credit unions are looking for alternate sources of income because people aren’t taking as many loans out, right? Interest rates are high. So they have an idea about how to help these banks and credit unions generate more revenue from non-loan business.
And the way they explained it to me sounded right on the money. So they’re like, okay, John, tell us, we’ve not gone down this path before. What we typically do is we have an idea of something that we know is going to help customers. They don’t know they need it till they see it. We just run with it. And we’ve had mixed results with that. What are we going to do here? Right? I said, well, you’re going to get a dozen credit unions and small banks together, and you’re going to ask them what they’re doing to make up for the lost income on loans. And they have the same reaction. Well, that seems too simple. I don’t know.
Maybe I have a gift I never knew about, but that’s to me, again, you start at the top and understand what’s strategic to them. And right now what’s strategic to those credit unions and community banks is how are we going to compensate for the income stream we’re losing because interest rates are so high, we got to have other things here to offer our customers, right? How are we doing that? So I said, well, go to the banks and credit unions and find out and see if the thing you think is a good idea for them is in their A list. And if it’s not, that doesn’t mean they won’t, I’d throw it out there anyway because maybe it’s one of those and be like, oh, well we never thought about that.
Mark Stiving
Yeah. And see if there’s a possibility.
John Mansour
Yeah.
Mark Stiving
Yeah. I find it fascinating that companies are afraid to, or at least they don’t take the time to go talk to their customers to go talk to their market. And I don’t care if you’re product management, product marketing, pricing, sales, I really don’t care. Yeah. We need to be listening to our market way more. So, alright, John, this has just been fascinating. Let me ask the final question, if I may.
John Mansour
Sure.
Mark Stiving
What is one piece of pricing advice you would give our listeners that you think could have a big impact on their business?
John Mansour
The best pricing advice I can give them is, and you know this better than me and everybody else, everyone’s looking for the black box that they feed a few variables into, and it comes out and says, Mark, here’s how to price your product. Right? How you’ve been asked that a million times, right? And that’s why I think the quantifiable value piece is so important in what we do, which is if you can quantify a unit of value to the customer for what your products are doing, that is a good starting point to figure out your pricing. Okay? And of course, there’s all kind of variables in what the market will bear, where the competition is, so on and so forth. But if you can justify that value, and I have a customer who actually did this. They were a point of sale software for car washes. Their customers washed 40% more cars than the industry average at an average wash price because of the add-ons of an average wash price of, I don’t know, about 20 to 25% higher than the industry average. So they figured out they could charge something significantly more than all of their competitors, and they did it and they didn’t discount. And customers would say it’s December 31st, and I’m looking for the year end deal. And they’re like, no, this is the price. And their customer was gripe and scream and they’d sign the contract. And so if you can quantify those, the more you can quantify those units of value, the easier it is to come up with a price that you can sell because you’re selling the value.
Mark Stiving
Yep. I agree a hundred percent. Let me add on just a little bit. If you have competition and you can quantify the value of your differentiation,…
John Mansour
That’s it.
Mark Stiving
Now you know how much you can charge above and beyond your competitors.
John Mansour
Exactly. And that’s really it is quantifying your differentiation.
Mark Stiving
Yeah. Nice. Yeah. John, thank you so much for your time today. If anybody wants to contact you, how can they do that?
John Mansour
They can ping me on LinkedIn or [email protected].
Mark Stiving
Perfect. And we’ll put your LinkedIn link in the show notes. 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 if you have any questions or comments about this podcast or pricing in general, feel free to email me, [email protected]. Now, go make an impact!
