Patrick Meegan is a Managing Director at Investor Group Services. Experienced in technology, industrials, consumer products, retail and e-commerce, subscription programs, pricing, and product strategy.
In this episode, he delves into the complexities of pricing strategies, emphasizing the importance of aligning prices with the perceived value and understanding market segments. He also explores the nuances between B2C and B2B pricing, highlighting the transparency in B2C and the significance of marketing and packaging in consumer products. Additionally, he provides insights on implementing price changes effectively in different organizational sizes and navigating the challenges of setting prices through distribution channels.
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Why you have to check out today’s podcast:
- Understand buyer drivers in order to make strategic decisions in pricing and packaging
- Learn practical advice on implementing price changes, particularly the challenges and strategies for ensuring successful pricing execution
- Gain valuable insights into the differences between B2C and B2B pricing, including unique challenges in B2C and the role of marketing in consumer products
“Spend time pressure testing the ideas.”
– Patrick Meegan
Topics Covered:
01:51 – The best way to teaching case studies and the how to go about each case
02:49 – How he ended up in pricing despite lack of pricing background
03:59 – Value-based pricing and understanding buyer behavior
05:03 – The process of generating pricing insights
06:39 – Application of a framework to generate pricing insights
08:57 – Challenges and strategies for executing pricing changes, particularly in larger organizations
11:17 – Overcoming fear of raising prices.
13:08 – Strategies for reducing fear and uncertainty when implementing price increases
15:42 – The appropriate role of salespeople in pricing decisions
17:32 – The importance of setting and managing price floors and discounting policies for salespeople
21:34 – Maintaining pricing integrity and avoiding discounts
22:46 – The differences between B2C and B2B pricing strategies and how crucial is setting the end user price first when selling through distribution or channels
26:46 – Pat’s best pricing advice
Key Takeaways:
“If we can’t understand from the buyer’s side what’s driving their purchase, then it’s hard for us to understand how to sell to them, how to negotiate, where to hang the value, how to package and how to structure the pricing model.” – Patrick Meegan
“I cringe so much when I see people going out with a price of whatever it is with a discount right along with it because whatever value established you just eroded by saying it wasn’t worth that.” – Patrick Meegan
“Your portfolio also plays an important role in how you can influence pricing.” – Patrick Meegan
People/Resources Mentioned:
- Kimberly Clark: https://www.kimberly-clark.com/en-us
- Kleenex: https://www.kleenex.com/en-us/
- Huggies: https://www.huggies.com/en-us/
Connect with Patrick Meegan:
- Website: maplestreet.com
- LinkedIn: https://www.linkedin.com/in/patrickmeegan/
- 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.)
Patrick Meegan
Let’s say you’re rebuilding your pricing strategy. And I think one of the best parts of the process is to go through and say, “Okay, we have this data, here we are, we have an idea,” poking holes in is the best thing I’ve ever seen as part of the process.
[Intro/Ads]
Mark Stiving
Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the inextricable relationship between them. I’m Mark Stiving, and our guest today is Pat Meegan. Here are three things you want to know about Pat before we start. He is the managing director at Maple Street Advisors which was just recently bought by IGS. He was VP of Insights and Analytics. He’s a marketing professor at BYU. What I find fascinating is when you look through his LinkedIn, he’s never had pricing in any of his titles. Welcome, Pat.
Patrick Meegan
Yeah. Thanks. Glad to be here.
Mark Stiving
Hey, the other thing I noticed, which I really wanted to ask about, this is not what the podcast is about. I just want to hear from you, you took a course from Harvard on how to teach case studies. In 30 seconds or less, what’s the secret sauce to teaching case studies?
Patrick Meegan
I would say that listening and facilitating yield better results when you let the class participate and develop ideas versus it being a lecture. That was, I think, kind of the core idea of the whole thing.
Mark Stiving
Nice. And are there specific points you’re supposed to get to when you go through a case?
Patrick Meegan
Yeah. So you’d have, some like a theoretical framework you might be using, but often that in the context of the course and what the takeaways are, you’d allow the ideas to develop organically, and the class feels like they’re developing them and they walk away having learned something more rather than you telling them. They’re coming to those conclusions and identifying, not that you’re controlling the outcomes, but kind of guiding them through the experience.
Mark Stiving
Nice. Excellent. I used to teach cases at university, but I never took the course.
Patrick Meegan
It was an amazing experience. I got a lot out of it.
Mark Stiving
Excellent. Well, let’s jump into the real part of the podcast and start with, how did you get into pricing? Even though you’ve never been in pricing?
Patrick Meegan
Yeah. It’s funny because to me the price, I know you focus a lot on value, and to me, that’s why you don’t have pricing in my role. But at the same time, how you’re going to market with the product and being able to articulate the value and claim the pricing for. It is all kinds of parts of one whole concept. So early on in my career, I always liked the idea of consumer and buyer drivers of purchase and pricing has always been something I’ve been interested in. But as I grew up in Kimberly Clark at the first part of my career, I started out in finance. So I saw a lot of things on the cost price side. And then as I got closer to the business unit leadership, I was involved in a lot more of the decision-making and the pricing and packaging strategies. And did a lot of pricing analysis and things, and just really enjoyed it and saw how big of an impact it was. Then I just had different opportunities come up where I was able to, where I think price sometimes was an underutilized lever, was able to elevate that in some of those roles.
Mark Stiving
Yeah. And so when you think of pricing, do you think of value. In the work that you’re doing today, is it value-based pricing and what’s the value to the customer? Or are you thinking some other way?
Patrick Meegan
Definitely value-based and I know there’s a broad way that people think about value-based pricing and how they get to it. But from my perspective, I like to think of it from a buyer’s perspective ultimately, whether it’s B2B or B2C and it can be more challenging in different contexts, different verticals and whatnot. But if we can’t understand from the buyer’s side what’s driving their purchase, then it’s hard for us to understand how to sell to them, how to negotiate, where to hang the value, how to package and how to structure the pricing model so that it makes sense to them versus something that you could technically do, but it doesn’t make sense to a buyer and would frustrate the buying process.
Mark Stiving
Nice. a hundred percent in agreement with everything you just said. So one of the things that you had said we were going to talk about, you were interested in talking about is, pricing insights and how do we get those? And when I think of pricing, I think of, I mean, I rarely actually think of pricing, believe it or not. Because it’s always about the value. So when you’re thinking of generating pricing insights, what are you thinking?
Patrick Meegan
Yeah, great question. It’s interesting, I think part of it is you don’t start with pricing. You start with,context, you kind of understand what’s the value proposition that, say if you’re working with a client company, what’s the value proposition? And then looking at the competitive set, what are the others offering and what are the things that buyers perceive as more or less valuable than the value proposition that your client company or your company has in the market? And then being able to kind of have some benchmarks of value. Say there’s never a perfect market rate in something that’s non-commodity, but having sent a range of where competitors are, and then kinda understanding what’s going to drive you up or down against that benchmark often is a lot of the rationale. We’re using different tools to gauge that. And I’m a firm believer that not sitting on one-legged stools trying to get multiple corroborating pieces of data that help us to say, yeah, this is seeming like it’s the right direction to go. And there’s validation for it to kind of de-risk the implementation.
Mark Stiving
So I’m not sure how to take this to the next level. when I think of value, and you don’t have to think this way at all, but when I think of value, I often think of, first I have to define the market segments, then I can define the product offerings, which includes the packaging, and then the pricing metric, by the way. And then we can get into the pricing and the price levels and the price segmentation, and how do I charge different customers different prices? and so as you start thinking about these insights, where do you go? If you could adopt that framework for a second? Where do you spend your time in the packaging and pricing metrics or way back in the market segmentation piece?
Patrick Meegan
Yeah, okay. I like your framework, and that’s something that we use often and I’ve found to be helpful. First, it’s like when you’re trying to figure out those segments, often I try to take more of an outcome or needs-based approach versus kind of a semi-demographic approach. Now that may fit in a lot of cases, but often it’s kind of what’s the problem to be solved or the job to be done? And kind of group people together and then figure out what’s different between them. Then once you’re looking at that, then you’re kind of seeing, okay, what’s that problem to be solved? Then some of these other natural questions come after. It’s like, if this is what they’re after and here’s a solution for it, well, how do they think about increments of value? So if I just have an all-access package, I could give all the value up front, but then I don’t have the expansion after, right? If I’m trying to drive a metric like, NRR.
Mark Stiving
Net revenue retention.
Patrick Meegan
Net Revenue Retention. Yeah. So net dollar retention is another way to say it. I don’t know why I gapped on that one, but because I used it all day long. But, when you look at that, you’re trying to figure out how do I not just meet what a buyer’s looking for, but I have to think about both the buy side and the business side, right? So I can’t just do everything a buyer wants because it’s going to be free and full capability. I have to balance that and say, okay, what’s going to allow me to provide some level of friction, or expansion with that customer, but not to the point where it’s going to slow down my sales cycle or really disrupt my ability to sell.
But at the same time, if I have no friction, then I’m also leaving a lot of value on the table and not capturing it through my pricing. So, working at the segments, and you’re looking at the products that fit those segments, and then how does value scale across the consumption of that value. And then there’s other pieces too and then you get into things like contract duration and different terms and things that often play an important role of being able to capture value as well.
Mark Stiving
I actually feel like I’m talking to myself. I couldn’t disagree with the thing you’ve said.
Patrick Meegan
I’ll come up with something, I’m sure.
Mark Stiving
I know. I hope so. So let’s talk about executing price changes for a second. Or executing pricing for a second. One of the things I find in my world is if I’m dealing with a 10 to $50 million company, it’s easy, right? You’ve got a CEO that says, hey, let’s go execute this new pricing strategy. And people complain, but they do it. And when you get to the really big companies, it’s like pulling teeth, getting something to change. How do you do that?
Patrick Meegan
Yeah. Okay. I love that because I spend a lot of time on pricing implementation, just beyond, getting to the answer is one thing, but then taking it to the market as a whole other, and the market only sees what you execute. So it’s extremely important, right? I spend a lot of time with mid-market companies and I would say there can be a pretty broad variation across the different types of companies. So for instance, you could have some that have never raised prices before, and it needs to be executed through a sales team that’s unaccustomed to that. And so you’ve got to enable them to have different conversations than they’re used to and sometimes are resistant to. And so part of that is spending time on that implementation and figuring out, okay, what are our risk areas here is we may be able to create a great pricing table in the background, and we have all of our good discounting policies and a good deal desk process.
But then when you actually sit down with the rep, these people haven’t had these conversations before, or getting into a range of pricing they’ve never talked about before can be very uncomfortable. And of course, they also have their number that’s pegged and they’re trying to figure out how to get to that. This can be pretty scary territory for them. For others who are more like a PLG motion, I think sometimes that implementation can be different because you take some of the human element out of it. not that it’s easy by any measure, but yeah. In the smaller companies, I think that it’s easier to kind of give direction. And it’s a smaller group, they’re tighter knit often versus a bigger organization with a lot more of the politics piece. But when you get into the bigger orgs I think a lot of the process is you got to have people’s fingerprints on the strategy, right? So versus if it’s kind of pushed down from above now I don’t think it lands as well. Then if you’re bringing in the right people as you’re developing the strategy, even if it’s done with a third party, they need to be weighing in and pressure testing it and bringing up questions rather than it being, okay, here’s some outsiders come and do this. They’ve dropped this glossy deck on our desk, and now we’re supposed to go figure this out. That
Mark Stiving
So, a realization I’ve had, I would say over the last year, which is pretty interesting, and it’s probably because before the last year, people weren’t worried about raising prices so much. but in the last year, the thing that I’ve really seen is that fear is what’s holding everybody back. and so they just, they’re afraid to make the move, to raise the price. How do you handle fear and help people, salespeople or even executives overcome the fear of raising the price?
Patrick Meegan
I love that you brought this up. I feel like this is the axiom of price strategy change, is that people will be fearful that they’re going to lose a bunch of their customers. It’s always the question that comes up early on. I feel like we have a pricing opportunity, but I don’t want to lose all my customers. And it’s usually overstated. And part of that is perspective, right? So, in the way that I like to approach these things, you’re gathering some market intelligence. I know that you do a lot of internal work. We do a lot of internal work, understanding where there’s opportunities and pockets of opportunities. But I think the fear starts to subside when you set the context, right? It’s like, okay, when we’ve gone and done some of this competitive intelligence, we’ve done some willingness to pay work, and we’ve done some modeling and really, there’s risk areas in certain parts of it.
Say if you’re looking at, let’s say you’re doing a customer, an existing customer increase, okay? If you treat everybody the same, there’s going to be quite a bit of risk in that, across your base. But if you sat down and you’re thinking about it from, okay, what are some indicators we have of stickiness or risk things that make me feel more comfortable, that I could charge more in certain cohorts or those that I need to be more conservative with, then people start to feel a lot better about it than if it’s kind of a broad brush move and you’ve got a clear plan and people have been able to weigh in on it. I think that that alleviates a lot of the fear because it’s clear a lot of those factors have been considered.
Mark Stiving
Okay, Pat, we’re going to have to work harder finding something I’m going to disagree with you about. Okay. So I love what you just said, and I would like the way I try to think about this, and the way I explain it, it’s a hundred percent consistent, but I usually say something to the effect of, if you do it across the board price increase, that’s scary as heck.
Patrick Meegan
Yes, it is.
Mark Stiving
But if you start thinking about who’s going to get a higher price, which products are going to get a higher price, which situations are going to get a higher price? And you define that all around what value means to those customers, products and situations takes a lot of the fear out.
Patrick Meegan
Yeah. And I think also when you’re able to share some of that data so they can see, hey, when you look at the distribution of usage for the accounts, this cohort right here is extremely engaged with the product. And so to say, if we’re going to take, say it’s even a conservative number, we’re going to take a 10% increase on these. They’ve been around for 10 years, you haven’t increased prices in the last five, like this doesn’t stack up to a risky situation. But if I look on this other side who have very low health scores and they have low usage, and we haven’t been able to get a hold of them on our CSM teams, I’m going to feel a lot less confident that this is where the fears of like waking up the bear kind of a thing. Like do they even know they’re still subscribing to us can come up.
Mark Stiving
Yeah. The example I often use is imagine you go to the gym every week and the gym raises your price or three times a week and they raise your price. You’re like, yeah, that sucks, but I’ll pay for it. But imagine you haven’t been in six months and someone raises your price. Like, yeah, okay, thank you for the reminder that I’ve been paying this.
Patrick Meegan
That’s a great way to think about it. Yeah. Because as soon as you start to tie it to things that are indicators of how much value they’re getting, I think it frames the conversation more appropriately. Because if you think about it, the fear, a lot of it comes from the unknown. And the way you dispel that is not just, it really is by taking the time to show them the true situation. And then people start to realize, okay, it’s not a broad brush. I’ve got some indicators that are giving me confidence. Then, really it starts to be like, what are the areas that we have a lot of concern and not a lot of insight into that we need to potentially treat differently than the rest?
Mark Stiving
Yeah, absolutely. I had a fascinating session with a client once, and after we got done, they’re like, oh my gosh, we’re giving away so much value to our customers. We should be raising prices. Yeah. That’s kind of the whole point, right?
Patrick Meegan
Yeah. And the exciting part is when you start out and that person was the most scared, and by the end they’re kind of saying, hey, we got a lot of opportunity here. It’s like, okay, I think they’re really getting how much value they’re really providing to the market from the market’s perspective.
Mark Stiving
Yeah. I think people just don’t realize how much value they’re really and truly delivering, which is a big deal.
Patrick Meegan
Yep.
Mark Stiving
So let’s talk about salespeople for a second. By the way, I was a failed salesperson, so, I empathize with them a lot, but I also make fun of them a lot. and so I was one of those people.
Patrick Meegan
Well, I mean, I spent years as a sales rep and sales leader. I work day in and day out with salespeople. I love them. I also understand that it is a challenging job. but there are really interesting things that happen in working with sales teams.
Mark Stiving
Yeah. So what role do you think salespeople should have around pricing?
Patrick Meegan
Yeah, I love that. okay. What they shouldn’t have is the ability to own and set pricing. I firmly believe that because that starts to get you into a vicious cycle of price going down.
Mark Stiving
But so real quickly, own and set pricing. Can we call that list price? Is that what you’re really thinking?
Patrick Meegan
Yeah. Like list prices? Yep. Okay. Obviously we’re going to have to quote people, but from a list perspective, I would answer that by saying, often, you have someone in product and or marketing, you have sales and you have finance. I like to think about that kind of triangle of people being involved. And different types of organizations may have different weights in there, or different people, but having some shared responsibility across those three tends to work out really well. Salespeople as kind of a, can we actually do this? And what are the risks and how do we plan against it? What do we need to do to enable them to finance the numbers? And then product and or marketing depending on the type of organization, because they’re the ones who own understanding value and understand what are the solutions to the buyer’s needs.
I’ve not seen that to work really well, but a salesperson definitely owning I think they also need to be guard railed, right? So if you have a list price, you want to make sure that their incentives are aligned with them performing in ways that benefit the organization. we’ve all seen kind of the bad comp strategies where the sales reps are doing something and they’re they’re pushing say discounts really hard to be able to hit a volume number because that’s how, what they’re comped on versus a dollar or a profitability or a balance of profitability and other things that can be a little more kind of virtuous if you will for the P and L.
Mark Stiving
Yep. So when you say guardrail, though, I assume you’re talking about there’s a floor price or that they’re allowed to negotiate to and so then we have escalation policies inside the company. How do you set the floor price? How much leeway are you going to give them?
Patrick Meegan
Yep. A lot of the ways that when I’m designing a pricing solution is I’ll actually do quite a bit in kind of charting what the plan looks like, and kind of having these line charts that show a, it’s like a discount curve or something like that. And that kind of sets the level playing field to have a discussion with people and saying, okay, if you’re on this package or on this tier, and then having like a band around each of those product lines and their price curve, you can see, okay, here’s what the lowest net price that we’d allow. but how we’d set that would be it’s going to go back to that fundamental value conversation that we’re kind of figuring out, okay, at what point does it not make sense or are we trying to move them to a different product if we’re getting too close to another product?
Let’s say it’s a three tier SaaS offering or something. If I know where I want my targets to be, then I have to have some level of banding around that, mostly to kind of allow them to have, say if there’s an expected level of discounting in certain markets, there are others, there aren’t, but then what gives them the latitude to close the deal quickly, but then keeping them from having that temptation to just go deep on discounts to just close a deal or to misread some of the signals. one of the things, the more latitude you give a rep, and I know you’ve talked about this, but I’ve seen this in my work too, is if you give a whole lot of latitude to reps, suddenly price becomes a way bigger influencer in deal values. And it seems like reps will really key in on, hey, the price is an issue, but if you take that lever away a little bit more from them, and they have a lower band to work with, and they tend to to be forced to some extent to improve their value selling.
Mark Stiving
Yeah. I’ve had people on the podcast before actually say, they think there should be no authority for salespeople to discount. So what is wrong with that?
Patrick Meegan
I think in some cases where you are an extremely unique and differentiated product and there’s no reason to discount at all, I think that makes sense. But if I look at, I’ll use SAS as an example, what I see in services too, or in industrials and manufacturers as well. I think there’s a kind of a good faith piece to it. It’s a kind of a more of a relationship piece to say, well, when I’m able to have a little bit of leeway, I can help the buyer to have a perceived gain in the negotiation, it’s an issue when they start to offer it up right away, right? You want that earned discount feeling from a psychological perspective is really what I’m after, is that they’re getting something.
It’s not that I don’t believe in our pricing and I have to give you price and discount at first shot. It’s really giving them a little bit of a leeway to work with, but then if they need more for some reason, like let’s say for instance, it’s a unique situation or it’s a nonprofit and we need to be able to have a little bit more latitude there, having some approval process or a deal desk that accounts for that makes it so it’s not just a rubber stamp, but there actually are some guardrails. They’ve got a hurdle to qualify versus it just being yeah, just go and ask the boss for permission.
Mark Stiving
Yeah. I kind of like the idea that says it’s got to be meaningful to the customer, as in the fact that we gave it at the right time.
Patrick Meegan
Yeah.
Mark Stiving
if we deliver a price, our price is a hundred dollars, but it’s flexible, that’s like, ugh, we just gave away money.
Patrick Meegan
This is our list price, this is our asking price.
Mark Stiving
Right.
Patrick Meegan
If what you’re asking for there is for them to ask for a discount. Yeah.
Mark Stiving
Right. So it’s like, yeah, we’re just announcing it. Hey, come ask for a discount
Patrick Meegan
Right. So, and in fact, I spend a lot of time on pricing change implementations, and the verbiage at the proposal phase is something that I do frequently, because I’ll watch a lot of gong calls in the sales recordings. And you’re just seeing how people are positioning their pricing, and then how does that play into how the buyer reacts. And it’s exactly what you said. If you come out weak, you’re using a certain language, you’re literally opening the door to then cave some of your pricing with a little bit stronger verbiage and a little more practice that could have held the price and realized much more revenue.
Mark Stiving
I absolutely agree. So, I’m going to ask a personal, personal-ish question that you can say no to, but when your clients buy from you, do they negotiate?
Patrick Meegan
Rarely. Yeah. So, I think, but they also come back to why do you buy these kinds of services? Like, do you trust these people? They have a reputation, and in that case it’s kind of a different buy than if you’re looking for an expert to do something for you. but also I think there’s also an expectation that we’re not coming to the table as pricing experts and we’re ready to just give up price. Like a lot of times there’s if there is a scope reduction and in which case they’re having to make hard trade offs, and well, what do you want to not include? Right. So not a lot of that.
Mark Stiving
Yeah. It almost feels like if you offered a discount, you proved that you’re not worth doing your job. Exactly.
Patrick Meegan
Yep. Yeah. And in fact, that same principle applies to whatever people are selling. and that’s why I have such a, I cringe so much when I see people going out with a price of whatever it is with a discount right along with it because whatever value established you just eroded by saying it wasn’t worth that.
Mark Stiving
Yeah. Absolutely. I want to change topics a little bit. You’ve had a lot of experience in B2C and I haven’t had that much experience in that space. What’s the difference between B2C and B2B?
Patrick Meegan
Yeah, okay. Couple things. you have a whole retail and distributor and wholesale element that comes in there. On the retail side, if you’re setting pricing let’s say you’re working with consumer products. I worked in household consumables like diapers and brands like Kleenex and Huggies and whatnot. When you’re setting prices there, it’s all a hundred percent transparent. B2B means, very opaque in many cases, but in a B2C environment, just having the price visible changes a lot of how you consider it. Because you can’t just use the fact that it’s hidden to your advantage. So, you end up having to, it really forces you to focus on value because at the same price, what is a person going to do in terms of their decision-making when they’re at a shelf?
How are you going to influence that? So messaging becomes important. Packaging the actual package, it becomes important. And then being able to make effective claims can be a decision driver. So all that stuff is very different than in the B2B space. And people don’t talk about a lot of that stuff, or the marketing department is very small. Marketing department’s huge on CPG. but you also have to figure out a couple other things. So at a retailer, you’re working with a category manager who’s trying to solve the problem of growth and profit for the entire shelf. So if you’re Huggies, you’re trying to grow your brand, but you’re also trying to benefit that retailer so that you become a partner that allows them to grow their revenue and grow their profitability. So you have to work both sides of the price because the price you sell to the retailer at, and the price you sell or you recommend that they sell to the end user or the buyer at retail are two different things you have to manage at the same time while competing with all the others.
Mark Stiving
Yeah. One of the things I talk to my clients about is, if they’re going to sell through distribution or sell through a channel, I usually recommend that they try to set the end user price first.
Patrick Meegan
Absolutely.
Mark Stiving
And then it’ll work their way backwards. Does that work in B2C as well?
Patrick Meegan
Yeah, absolutely.
Mark Stiving
Even though you don’t have to set that?
Patrick Meegan
Yeah, because if you start the other way, you end up getting into weird situations. if you think about things like price pack architecture, and you’re designing a product for a channel, if you start from the retail price and you’re saying, okay, what’s going to be effective on the shelf in terms of value to the buyer? Because ultimately it only succeeds for the manufacturer and the retailer if someone’s buying it off the shelf. So if you start from there and you say like, hey, we have a strong case here that this is going to be effective, this new pack that we’re going to bring in. And then you work back and see, okay, what are the ranges? Because the other piece you have to think about as a manufacturer too, is often it’s not just as easy as setting, your cost could vary differently in how you configure that product. Remember when I was working on Huggies wipes, you’d often put this pack of like 64 wipes in there, and you can only move in packs of 64. So you have to think about those realities as you’re designing the whole structure.
Mark Stiving
Okay. selfish question for a second. I’ve, I used to teach all the time, and I want to know if this is true, and if you can amplify it, if it is. Is Walmart’s loss leader diapers?
Patrick Meegan
I didn’t have visibility into the whole business, but it’s not. They have a solid business there. But I will say, they’re dead serious about being the best price in the market and they don’t go easy on the big players. so yeah, but I think it’s still a healthy business for them.
Mark Stiving
Yeah. I heard the price of diapers brings in more buyers than any other product that they have.
Patrick Meegan
Yeah, I would say it’s a significant trip driver, right? So, once you’re out of diapers, it’s one of those things you can be out of tortilla chips, but once you’re in diapers or toilet paper, you’re making a trip. And we saw that during COVID. Now, people are making those trips. But when you have another piece, I’d say, in answering to your earlier question, your portfolio also plays an important role in how you can influence pricing. So if you are a manufacturer that has one of those major trip drivers, you can create different strategies across your product line to be able to increase your partnership with that retailer.
Mark Stiving
Nice. Pat, this has just been a blast and we could keep going, but we’re going to have to run out of time. The last question. What’s one piece of pricing advice you’d give our listeners that you think could have a big impact on their business?
Patrick Meegan
Yeah. I’d say, I think time spent on pressure testing the ideas because, for instance, let’s say you’re rebuilding your pricing strategy. And I think one of the best parts of the process is to go through and say okay, we have this data. Here we are, we have an idea. Poking holes in is the best thing I’ve ever seen as part of the process. So we used to do this when I was at Kimberly Clark, and we do it now, which is, what are the unanticipated risks to this plan? Because the market’s going to show them to you if you don’t catch them before that, you roll it out. Okay. And so diligence in that perspective is important, but then also what are the risks as you go to roll it out? What are those things that could bite you? and then plan for those? I’ve never seen anyone say, I regret doing a great job of planning my execution of anything. It’s usually the opposite, in which we’d spent more time on this.
Mark Stiving
Yeah. I’ve heard of something called a pre-mortem, and I’ve never done one, but a pre-mortem essentially says, assume the product failed or the launch failed. Why did it fail?
Patrick Meegan
Huh? I love the concept. I’m going to take that
Mark Stiving
Feel free.
Patrick Meegan
I’ve done plenty of postmortems and I think someone, a good leader is looking forward and trying to figure out where the snags that we just haven’t thought about yet.
Mark Stiving
Yeah, I think it just changes someone’s mindset to say, oh, now I have to make excuses.
Patrick Meegan
So that’s great.
Mark Stiving
Pat, thank you so much for your time today. If anybody wants to contact you, how can they do that?
Patrick Meegan
You can go to maplestreet.com or igsinsights.com. Maple Street just became part of IGS. Or you can look me up on LinkedIn or [email protected].
Mark Stiving
Excellent. And we’ll have your LinkedIn URL in the show notes, I’m sure. And to our listeners, thank you for your time. If you enjoyed this, would you please leave us a rating and a review? They’re very valuable to us. And finally, if you have any questions or comments about the podcast or pricing, feel free to email me, [email protected]. Now, go make an impact!
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