Impact Pricing Podcast

#624: How Effective Writing Shapes Pricing Strategy with Frank Luby

Frank Luby is a writing partner and editor for business books, articles, and corporate communication and co-founder and CEO at Present Tense LLC.

In this episode, Frank emphasizes the importance of clear and effective writing for pricing professionals, offering techniques like the “10-10” and “Rule of 13” methods to structure writing efficiently. He highlights how good writing can influence decision-making within organizations, often reaching and persuading people beyond initial conversations. Additionally, he underscores the value of listening to customers and understanding their real needs, which can significantly enhance pricing strategies and company success.

Why you have to check out today’s podcast:

  • Discover practical writing tips and actionable strategies to help you organize and improve your writing, making it more persuasive and impactful.
  • Learn how writing plays a crucial role in influencing and shifting thinking within organizations amplifying your message beyond one-on-one conversations.
  • Gain insights on structuring effective communication, prioritizing the right information in your writing and focusing on making a single point effectively.

Truly, honestly, listen to customers.

Frank Luby

Topics Covered:

01:33 – How he got into pricing

03:23 – What’s his contribution in Hermann Simon’s book on pricing

04:21 – Noting two challenging tasks that makes writing about pricing difficult

05:39 – Acknowledging the complexity of the term “value” in pricing

07:36 – Deciding which narrative perspective to use in writing between blogs and books

09:15 – An effective writing technique to engage readers

10:05 – What his role is at the upcoming PPS (Professional Pricing Society) conference

12:09 – Why a pricing director or manager should care about improving their writing skills, even if they feel confident writing emails

14:10 – How writing can have a greater influence than many people realize

15:46 – Sharing two key writing approaches to help people organize their thoughts effectively

18:50 – Comparing writing to architecture

20:03 – Explaining the “Rule of 13” method as a way to test whether a chapter idea can stand alone

21:21 – The concept of prioritizing writing tasks using the acronym “CSR”.

23:01 – Importance of understanding your audience, especially when trying to shift or replace existing strategies in pricing 

25:53 – Introducing the 50/500 rule: Making a single, clear point in writing

27:31 – Frank’s best pricing advice.

28:24 – Why businesses often don’t listen to their customers, despite it being an obvious necessity

Key Takeaways:

“I often make the analogy to writing an architecture. And you wouldn’t want somebody building your house just by having a bunch of bricks and cement and two by fours delivered. You’d like to see a plan, you’d like to see what they’re going to design. And it’s hard to change things later on. So, that planning part, especially for a book, is immensely important.” – Frank Luby

“That’s where this 13-method comes in where you can test some of those things that if you can’t have those three supporting pieces, or three examples or three ways to elaborate on a particular point, that’s your signal right off the bat that that might not carry a chapter.” – Frank Luby

“The other hint is prioritizing what you want to write about.” – Frank Luby

“We love simplification and we love to have simple answers and simple descriptions, and no segment of customers, or no individual customer, is really that simple. So, we pick up on the things that we can make easy groups out of and we tend to ignore the rest. And sometimes, the rest we’re ignoring is really the vital part of the equation.” – Frank Luby

People/Resources Mentioned:

Connect with Frank Luby:

Connect with Mark Stiving:

               

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.)

Frank Luby

Truly, honestly, listen to customers.

[Intro / Ad]

Mark Stiving

Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the confusing relationship between them. I’m Mark Stiving, and our guest today is Frank Luby. Here are three things you want to know about Frank before we start. He is a writer slash editor. Now I know, why do we care? But he spent 13 years as a pricing person and then an editor at Simon-Kucher Partners. He’s been running his own company, Present Tense, LLC since 2014. And believe it or not, he worked for eight years as a music critic. By the way, he’s also speaking at the upcoming PPS conference in Vegas. Welcome, Frank.

Frank Luby

Yeah, thank you, Mark. Thank you for having me.

Mark Stiving

Hey, so how did you get into pricing ?

Frank Luby

Yeah, that’s a very interesting story working in Germany at the time as a journalist. And Dow Jones bought our company and shut down the English Language Service. So I needed work. And someone in the office that I was working in, in Bonn Germany knew someone who was one of the original five major partners at Simon-Kucher and connected me. And I remember, this was February 1996. My first moment at Simon-Kucher was a sit down interview with Hermann Simon and who of course slid a book across the table and said, you need to read this. And I found it fascinating.

Mark Stiving

What was the book?

Frank Luby

The book was the German version of price management, probably two or three editions ago, but he had one called Price Management Compact. So it was about that thick. I think I still have it flying around here somewhere. The pages are starting to fall out, and it’s highlighted and posted, noted the depth. But it was a great read. It got me up to speed on things and I had majored in Physics, so I had a quantitative background, but I’d done a lot of writing. And I think that’s, I’m sure any pricing person out there that’s listening to this kind of sees that you need both sides at some point to do this work. So Simon-Kucher had 50 people at the time and one office, and they hired me, and that’s what started the work on getting into what used to be just conjoint analysis and simpler things back then. And by the time I left the firm, they were 1500 people, I think. It was great to watch that whole growth trajectory. It was a lot of fun.

Mark Stiving

So the banner on your LinkedIn page shows a lot of books, including Confessions of a Pricing Man, I think it’s what it is by Hermann Simon. Did you help write those books?

Frank Luby

I don’t like to necessarily use the term ghost writer, but I was a writing partner, or I had a significant role in every one of those books. And so for the books with Hermann Simon, a lot of it was taking what he’d written in German, and not only translating a lot of that, but making it more accessible for an English language audience. Because sometimes the way you’d structure something in German for a German audience isn’t quite the same as what you would do for an English audience. In a lot of cases it’s from the ground up we’re serving as a sparring partner doing research, helping them with the writing. But yeah, you’re right. I had a significant role in every one of those books.

Mark Stiving

Nice. So we’re going to talk about writing about pricing. So, I write a lot about pricing as you know you write about pricing. Why do I find it so freaking hard?

Frank Luby

Yeah. I think it’s because it smashes together two very hard things. Writing and business writing is often considered one of those underdeveloped skills. It’s something that a lot of companies look for. Don’t get in it. It’s something that’s not really taught. And business writing is a lot different than what you learned in your 11th grade English class. It’s a challenge unto itself. And then you mix in what we both know, and most pricing people know is one of the hardest things in business to do, which is to come up with a pricing strategy, set prices, come up with a discount strategy, convince salespeople to go along with whatever you’re doing. So you combine those two challenges. And I haven’t figured out whether it’s hard plus hard, hard times, hard or hard to the hard power but it’s difficult. And that’s, I think, one of the reasons why I wanted to stay with it. I find it fascinating and very challenging every single project or every single piece of work to try to make a connection with people.

Mark Stiving

Yeah. So, let’s start with the hardest question I know of, and that is, I don’t know what the word value means. Well, yeah. Okay. I know what it means. It only has 20 different meanings. How do we use the word value in our writing?

Frank Luby

Yeah. I think that if we step back a bit, I think a lot of that starts with the audience that you’re going after and trying to understand what their definition of value is. Because if you go in with your definition, they have another working definition, whether this is a sales person, a C-level executive, a customer there’s going to be a clash. And that’s where the confusing part that you mentioned at the outset comes in. You’re not speaking the same language. Before you’re going to sit down and write something. And this could be everything from an email to an article to something larger. It’s trying to figure out what definition of value that audience works with. And you’re right. And half of those definitions start with, it depends. So, it’s really hard to pin down what value means. I don’t think there is any consensus definition. It all depends on the context.

Mark Stiving

And so, you pretty much have to define it every time you use it.

Frank Luby

Yep. And make sure that that’s a definition again that you’re not going to have to spend half your time in the writing of the presentation reconciling your definition with someone else’s.

Mark Stiving

Yes, so, let me ask a writing question, if I may. I spend most of my time writing two different types of things. I write a blog. Every week I write a blog, and then I write books occasionally when I get the mood to say, ‘Hey, here’s a message I want to get out. I’ll write another book.’ And so the blog I write, I almost always write it in second person as though I’m talking to somebody. And that just feels so natural to me. It’s like I’m standing in front of a stage, or I’m having a one-on-one conversation. When I write books I have such a hard time not writing it in second person. So, tell me about what person should we be writing about and what tense, what’s the right word to use?

Frank Luby

What person should you be writing it? Is it first? Is it second? Is it third? It is hard to mix that. I completely agree with a blog that should be written especially in an area where you’re trying to persuade someone to do something, to convince them to take a certain action, to look at something from a different perspective. You almost have to do it exactly the way you described and write that in second person. And in some cases it’s a common recommendation. If someone’s trying to do what you’re doing and write a blog and they’re stuck you break out the recorder and you have a conversation, and you simulate exactly what you described. Pretend you’ve met someone on an airplane and they ask you about that topic and riff on it. What would you tell them?

And work with that as your raw material. I find that books, depending on the audience depending on the topic, you can mix. So, and there’s ways to even have that trend and be relatively smooth that you could write a chapter in third person but have the recommendations being in second person. And sometimes that juxtaposition or that jarring nature brings people into the topic all of a sudden. They might have been thinking it’s not part of what they do, and then you rope them in by switching to second person. So that’s something that I do quite often working with authors on a book.

Mark Stiving

Oh, that’s really interesting. So, you start out with, ‘Hey, let’s talk about what price segmentation is and how it can be used, and the pros and cons of different types. And by the way, here’s what you should be thinking.’ And that’s actually a really nice approach.

Frank Luby

Yeah. And you can even bracket that with an imperative to start. One of the most powerful words that you can use to introduce any topic is just the word Imagine, for example. Imagine that your director of sales walks in and wants to talk about the most successful quarter they’ve ever had. You get all excited, and then they start laying out what they did, and you don’t know what to do. And you start shaking your head and you’re like, uh oh, okay, we’re going to have some issues. Immediately you’re drawing someone in, and then you have a chance to interpret that in the third person. And then, like we were talking about, switch back to bring them back in the story at the end with recommendations written in the second person.

Mark Stiving

Yeah. That’s pretty fascinating. So, what are you going to do at PPS? Can I ask that?

Frank Luby

Sure. I’m going to conduct a writing workshop, and that’s going to… I’ve been working in pricing since 1996 in one form or another. I’ve been working as a professional writer, this goes all the way back, believe it or not, to the late 1970s. So I think every year since then, someone has paid me to write something in some form. So I’ve learned a lot of different approaches to helping people get started, helping people build their confidence, and helping people be more efficient at writing. And as we talked about earlier you combine those two challenges, writing and pricing, it’s hard. So, what PPS has asked me to come in and work on with people, give them some techniques that they can work on right then in the workshop that will help them figure out who their audience is a little bit better, understand the impact between the lines of what they’re writing, how to structure, how to get started, how to make a prioritized insights and so forth.

Do a lot of the things that people might not have thought of or people might have done, but not necessarily see how it all works together. And by the end of the day, give them something they can walk away with that gives them, like I said, more confidence, makes them more efficient, and improves the quality and the persuasiveness of what they’re writing. And that could be everything from a report to guidelines for a team to an actual fully developed pricing strategy, change or alternative that you’re presenting upward in the organization. So I think that is a skill that’s underestimated, and that’s why I’m excited to be able to do this. Because I think there’s a lot of benefit for people that are going to be in pricing for a long time to pick up this skill and help themselves out.

Mark Stiving

So before I ask you to share a couple secrets so that I can learn without having to go to your seminar, why would a director of pricing or pricing manager care? I can write emails, right?

Frank Luby

Yeah. You can write emails, and I think we write all the time. I mean, people like to say that the world’s drowning in data. I think we’re drowning in words. We see we’re hit with so many different things that are written. But the question is, what impact is that going to have? Should this have even been an email? Is it too long? There’s a lot of questions that come up, even with an email and without having someone torture themselves about perfection with an email. I think the point is, everything you write has a job to do. Everything you write has a mission, and it’s usually to either inform or persuade. And you can almost say you have a win rate with what you’re writing.

And if you’re able to produce more things that can target more people and persuade more people, that’s an argument for efficiency. To see what works and what doesn’t work for you is something that will build your confidence as a writer. So I think, to make it short and sweet, it’ll save them time, it’ll make what they write better. And ultimately, over time, it could make them be recognized as a go-to person and a bit of an authority. Good writing can help project authority and can help strengthen your reputation. It’s almost a signal of where, what you wear and how you act, people will judge you by it. And if you’re able to improve it, enhance it, and make it work for you and your organization, that will get noticed in a good way. So I think there’s career benefits and there’s organizational benefits to be able to write about pricing better.

Mark Stiving

So, Frank, first I want to say I love that answer, right? And back when I was actually doing pricing for a company,, I always thought of the influence, persuasion as one-on-one conversations. And I never thought about what I wrote as influencing people. And now that’s a really interesting insight that says, ‘Hey when I write something, it probably says even more than the conversations I have with people.’

Frank Luby

Yeah. And that’s why the very first part of the talk or the workshop will deal with what I refer to as the meta level. And you hit on exactly what people don’t realize sometimes is that someone will read a blog post of yours, and their conclusion is not, ‘I took away three insights on discounting, Mark’s smart or Mark’s wrong,’ or they’ll make judgements about you and your material and your approach to it. And we do this subconsciously, and we also do it all the time. So there’s just heightening people’s sensitivity to the fact that their writing reverberates that they’re writing, you might have that one-on-one conversation with someone, but the real impact of your writing might be from who that person passes onto. So sometimes your real audience is not even in the room when you’re having that conversation and you’re talking to another messenger.

Do they want to multiply and amplify what you said? Or do they want to block it? So, there’s a lot of dynamics that play into this. And part of the challenge in the workshop is to not just lay all this out and have people go, oh my God you’re making it, it was hard enough to begin with. Why are you making it even harder? But to get into some techniques to say, okay, let’s stop with the hard, let’s start making this easier on yourselves. Here’s some approaches to think these things through. Here are some rabbit holes. We don’t want you to go down and actually bring out some of the actual tactical approaches to writing better.

Mark Stiving

Okay. So give us a secret or two. I’m really curious what you’re going to teach.

Frank Luby

Yeah. I think if we get into one of the big areas that works really well with people when I teach this, it is taking one of two approaches to organizing what you’re going to write. One of them is called 10/10, and that is writing 10 simple declarative sentences to explain end to end what you’re writing about, and then come up separately with a list of keywords that have to be in there. And both of those challenges help you in a couple ways. The key words start you asking yourself questions about, well do I want to describe this with the word success? Do I want to have a positive tone here? Do I want to have a list of positive words? Are there verbs that might help me make this point better? And then you start from that 10-sentence version, that’s an outline.

And the nice thing about it is that the outline is shareable. You give someone five pages to read and ask them what they think. You’ll be lucky if they even read it. You give someone 10 sentences on one page, and they can read it, and they can move things around and they can say, ‘Hey, you know what? You got this backwards. You should put this first, you should start with this for this person.’ That kind of thing. So it allows you to plan what you’re writing very efficiently upfront. And that works very well with people that have a bit more of a qualitative orientation that are more of the storyteller-fied. But a lot of people that get into pricing or come from an engineering or a quantitative background, and they need, what I refer to as the rule of 13, you’ve got a main point.

You’ve got three sub points, you’ve got three arguments for each of those sub points, and you need to fill in that grid. And then every single argument, and every single point needs to earn its way onto that page. So there, the discussion is, well, I think that evidence is weak. It allows you to find what’s the weakest link in my argument? Where do we need more evidence? Should I tell the story in three points and conclusion or conclusion in three points? But it still organizes your thoughts, again, in a very simple way on one page. And that’s something that people who have a more classic training or a quantitative training latch onto. And we go through both, and I ask people to try both and see what works for them. But it’s always fascinating for me in these trainings to see when the magic starts to happen. And people are like, okay, well, I can apply this to something work now, and I’m going to do that.

Mark Stiving

Yeah. So both of those examples you gave, I would call them versions of outlines. You actually said outline on one of them. And what I find fascinating about that is I remember being in elementary school and being told to outline this before you write it. And I hated that. God, it was just horrible. Right? Why would anybody do this? I just want to write. And nowadays I don’t do this when I write a blog, it’s just kind of a stream of consciousness with a point. When I’m writing a book or I’m writing something important, I sit down and I outline the heck out of it. It’s like, okay, where’s this going to go? And how does this fit? And, and so these outline formats I think are huge. And it’s funny that we hated them. I hated them as a kid.

Frank Luby

Yeah. And I think part of the problem might have been that you’re outlining what other people did. And I think that’s where some of us learn to outline, you’re asked to break down what someone else did instead of constructing your own. But again, the difference between school and business writing is we have to focus on efficiency. And if I want input on something, I’m more likely to get input with that one page overview in that snappy shorter compact outline than I am with something longer. I often make the analogy to writing and architecture. And you wouldn’t want somebody building your house just by having a bunch of bricks and cement and two by fours delivered. You’d like to see a plan, you’d like to see what they’re going to design. And it’s hard to change things later on. So that planning part, especially for a book, is immensely important.

Mark Stiving

So, one of the things that I find that happens, and I don’t really care too much, but I just find it fascinating, is that I’ll sit down and outline a book, and then I start to write it. And this chapter is so tiny. It’s like, no, it doesn’t deserve to be its own chapter. I need to go change the outline. Now I need to change the structure to get this to fit someplace else. Is that common?

Frank Luby

It is. It’s surprisingly common. But I think the goal is to, and that’s where the 13 method comes in, that’s where you can test some of those things that if you can’t have those three supporting pieces, or three examples or three ways to elaborate on a particular point, that’s your signal right off the bat that that might not carry a chapter. So your question is, what is this another subset of, and where could that kind of fold into? There’s an old technique. I don’t think people use it very much anymore, but I used to mind map in situations like that to resolve some of those discrepancies. This is a fragment of some other thought. What should I plug into? And the more you can catch those things in the outline stage, the less risk there is to that you’re going to write a chapter that ends up getting discarded or put away. But I think for some books, there’s probably 20 or 30% more written than is actually used for that reason. We see that when you execute it, it doesn’t work the way you want it, and we have to leave an example out or move it somewhere else. So, even if you plan very well, those things can still happen.

Mark Stiving

Yeah. And very interesting. Can you give us another hint before we have to wrap up?

Frank Luby

Yeah. The other hint is prioritizing what you want to write about. And I think that’s something that people need to put the emphasis on the right place. And I refer to this as CSR as kind of an acronym, but whatever you’re writing is either going to confirm what somebody’s thought about or talked about, it’s going to add to their knowledge, it’s going to shift what they think, or it’s going to replace what they think. And along that progression that is both how strong the demands are on your rigor and your work. If you’re just confirming something you got a piece of data back from a survey, it lines up with what everybody thought. That’s the easiest thing in the world. And that’s not as demanding. And I’m guessing five years from now, there’s a gen AI tool that someone’s going to use to punch that out, to save themselves some time.

But if you’re into that shift or replace, if you want to change someone’s mind or change the way an organization works, that’s a much taller order. And that requires more audience research, more structure, more of a time commitment. So if you’re setting your priorities right, that’s where you don’t waste your time torturing yourself for two hours on a simple email. You make certain things more efficient, but the further you get toward those shift and replace things, the more you need to put your energy in there. And I think that makes, again, you and the organization better off if you can handle those tasks.

Mark Stiving

And I would think most pricing people are trying to change something inside the company. Right? So they’re trying to shift thinking or replace a strategy with a new strategy. So it probably takes a lot more research, a lot more effort.

Frank Luby

Yeah. And part of it is I’ll give you an example with not knowing an audience that I remember back as a consultant, we presented really groundbreaking results on a potential price increase that literally showed a company could double the price of certain portfolio and rebalance things, and customers would be fine, and they would make a lot more money. And that ran up into someone who said this is great, but I’ve been burned by market research before. I don’t give any weight to market research evidence. You want me to do this, come back with something else. So we had to shift our argument to precedent and go out and find examples of companies that had implemented price increases of between 50 to a hundred percent to rebalance their portfolio and both within their category and outside of their broad category. And once we did that, we got them on board. So sometimes even what you think as a pricing person, you’ve done everything right. You’ve got tremendous research. It worked beyond your dreams. And it still might not convince anyone because that audience thinks a certain way, and you bringing what they don’t like is not going to change their mind. So audience research is another huge, huge, and often overlooked aspect of it.

Mark Stiving

And what’s actually interesting, what I was thinking as you were saying is that as pricing people, we often try to help our salespeople learn to sell the value of our product. And that’s all about what the customer is thinking. How’s the customer making a decision? And yet when we’re trying to sell our ideas, it’s the exact same thing. It’s just we’re now the salespeople. And so are we thinking about that customer or our audience in that respect?

Frank Luby

Yeah. And I think you’re right. And I think in a lot of cases, it doesn’t get the amount of thought that it should. Yeah. I think people like to think the analysis or the data can speak for themselves.

Mark Stiving

So, another comment I wanted to make on writing and, okay, I still tell a quick story. As I said, I’ve been blogging since 2010 every single week. And my first blog I wrote was 1500 words. And I said to myself, how the hell does anybody ever do this? Because that was like real work. And then I’m reading Seth Godin’s blogs and he’s writing 300, 400 words and I said, I could do that. And so I suddenly said, look, my blogs, every single one of my blogs is going to be around 400 words and it’s going to make a single point. That’s it. And I think that’s done really well for me. It’s trained me in this concept that says, you’re making a single point. Can you make a point? And I think a lot of times when we write or when we speak, when we present, we’re trying to make way too many points. And it really needs to be, you’re making a single point.

Frank Luby

Yeah. I think that’s an excellent way to look at this. And I think you’re right that the more distractions you bring in it’s the famous line. I think I saw this in a column by David Brooks from the New York Times many, many years ago. He said that the definition of a giraffe is a horse designed by a committee. And that’s what we often do with what we write, is we try to bring in other things that kind of create what you mentioned. And especially with the length. There’s still some important lessons from the days before the internet when everything was printed. And it’s one of the rules that we’ll look at in the workshop as well, or one of the guidelines, it’s called 50/500. And there was some research that was done that showed that if you can engage someone in the first 50 words of what you write to bring them in or pike their interest in that one point, as you just described, you get a license to write up to 500 words, they will stay with you before their retention drops off without necessarily knowing that research that was done it’s decades old, but I think it still has some validity to it. You captured the essence of it, hook people right off the bat and then get to about four or 500 words and then stop. You’re done. Unless you want to change topics or lead them into something else.

Mark Stiving

So, yeah interesting. Frank, this has been fascinating and fun. I really appreciate it. I’m going to ask you the question I ask everybody anyway, even though you’re more in writing, what is one piece of pricing advice you would give our listeners that you think could have a big impact on their business?

Frank Luby

I think it would be, truly, honestly, listen to your customers. And I know that sounds like a cliche, but my favorite examples when they pop up on LinkedIn or in blogs or wherever else, is this dissonance that’s there sometimes. And the way we ask questions or the way we interpret what customers are saying. And you get into focus groups and listen to customers talk, and they’re not talking about the product or the pricing or the issues the same way that it looks in the textbook sometimes. But those are honest answers. And I think that’s why we might be missing trends in terms of social media influencing how people make pricing decisions online. I think customers, without knowing it, are way ahead of where a lot of pricing thinking is, and it needs to catch up.

Mark Stiving

So, can I say, first off, I love that answer, but let me follow up with the question. Why don’t people listen to their customers? I mean, it seems so obvious to me.

Frank Luby

Yeah. I wish I knew, but I think maybe there’s a psychologist that’s way smarter than both of us that knows the answer. I think you hit on it when you were talking about the writing though, that you know, it’s easy to lose sight of who you are trying to address here and what they really need and how they think and how complicated that is sometimes. And I think part of it is we love simplification and we love to have simple answers and simple descriptions and no segment of customers or no individual customer is really that simple. So we pick up on the things that we can make easy groups out of and we tend to ignore the rest. And sometimes the rest we’re ignoring is really the vital part of the equation.

Mark Stiving

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

Frank Luby

My favorite way would be to try to connect on LinkedIn, actually. And you can find me there under my name. There’s a couple other Frank Lubys out there, but I think you’ll be able to recognize me. That would be the best way.

Mark Stiving

Alright, thank you. And to our listeners, thank you for your time. If you enjoyed this, would you please leave us a rating and a review? That’s the currency in podcasts and we would hugely appreciate it. And finally, 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!

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