Paolo De Angeli is currently leading the Customer Experience and Customer Value Management teams at Borealis AG. He has a strong background and passion for Customer Value, from Value Creation to Value Based Pricing.
In this episode, Paolo shares the importance of persistence for pricing practitioners, encouraging them to confidently share their insights even when facing resistance. He highlights that pricing is not just about numbers but also about effective change management and influencing senior leaders. By staying committed and focusing on both soft skills and strategy, pricing professionals can drive impactful results.
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Why you have to check out today’s podcast:
- Gain actionable strategies for understanding customer needs, framing value propositions, and making data-driven pricing decisions.
- Dive into valuable lessons on building strong supplier-customer relationships.
- Learn how pricing is as much about effective communication and influencing as it is about numbers, with tips on navigating resistance.
“If you are a pricing practitioner, you spend time learning, investing. Maybe like I did, taking some certification like the Professional Pricing Society, or you’ve been involved in the network. You are entitled to share your opinions.”
– Paolo De Angeli
Topics Covered:
01:47 – How he found himself in pricing and what made him embrace it
03:45 – Reflecting on the evolution of the pricing profession
05:32 – Articulating the strategic reasoning behind his role as Head of Customer Experience and Customer Value Management
09:09 – Explaining how customer experience and customer value management are interconnected within a continuous commercial operations cycle
14:28 – Emphasizing the importance of having more customer value conversations, highlighting that customers are generally receptive to it
15:33 – Explaining how companies often fear customer value conversations due to the risk of their assumptions being challenged
20:08 – What process he employs when customers suggest improvements
22:05 – The importance of leading value discussions and identifying and addressing specific KPIs that matter to the customer to demonstrate value
25:20 – Highlighting the need to understand the customer’s needs before discussing KPIs
27:11 – Why you need to look beyond customer feature requests to uncover the underlying problems
28:56 – How effective value management benefits both the supplier and the customer, creating a win-win scenario
30:13 – Paolo’s best pricing advice
Key Takeaways:
“Everything that we do internally, when we challenge our value proposition, and we try to understand where our differential value is, comes not only from our internal perception but also and above all from what our customers are telling us.” – Paolo De Angeli
“Companies are afraid that customers will not talk, will not share, and will destroy these hypotheses and negotiate on price. And the solution for this is to build a relationship that is more going in the direction of partnership than a transaction with your customers.” – Paolo De Angeli
“If we want to simplify two main applications for customer value management, one is when you launch a new solution in the market, you need to have a differential value, a compelling value proposition, so that you need to be convincing both internally and externally and explain why anyone in the world should be interested in buying from you this new solution and not an existing one.” – Paolo De Angeli
“Managing expectations is the most important thing, it’s not because they ask for something that they will get it, but it’s, I think that what we owe our customers is to listen to them. Have a conversation on why certain things are possible and others are not, and then have a joint collaboration on what’s possible.” – Paolo De Angeli
“Before understanding the KPIs, we need to understand their [customers] needs. We need to understand what their problems are.” – Paolo De Angeli
“It’s important to agree on the KPIs, but what matters is, to understand what their[customers] problems are and help them understand the profit equation.” – Paolo De Angeli
People/Resources Mentioned:
- Professional Pricing Society: https://www.pricingsociety.com/
- European Pricing Platform: https://www.pricingplatform.com/about-epp
- Syngenta: https://www.syngenta.com/
Connect with Paolo De Angeli:
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.)
Paolo De Angeli
If you are a pricing practitioner, you spend time learning, investing. Maybe like I did, taking some certification like the Professional Pricing Society, or you’ve been involved in the network. You are entitled to share your opinions.
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Mark Stiving
Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the overlooked relationship between them. I’m Mark Stiving and I run boot camps to help companies get paid more. Our guest today is Paolo De Angeli, and here are three things you want to know about Paolo before we start. He is the head of customer experience and customer value management at Borealis in Vienna, Austria. By the way, we’re going to talk to him specifically about that title. He spent 10 years as a pricing manager at Syngenta in Milan, Italy, and he also did a stint as a consultant at Accenture. Doesn’t everybody have to do that? Welcome, Paolo.
Paolo De Angeli
Thank you, Mark. It’s my pleasure to be here with you today.
Mark Stiving
Yeah. Hey, how did you get into pricing?
Paolo De Angeli
Actually, it’s quite a funny story. Like many, by the way, pricing by chance, meaning that I was working for Syngenta back then 2009, roughly. And back then, Syngenta was one of the few companies, at least to my knowledge, who had established a former global pricing organization. So every major country had a pricing manager. I was coming with some experience in commercial space as a consultant, as you mentioned. And I was offered this position as a pricing manager first. And I fell in love with pricing. I started studying, learning and jumped into it. And yet I am, after more than 15 years, still working on pricing somehow. Although in the meantime, I also added a couple of things to my role.
Mark Stiving
Yeah. So why did you fall in love with pricing? I know why I love pricing, but why did you fall in love with it?
Paolo De Angeli
Well, I mean, look first of all, as we all know it’s the most important profit lever. And I mean, the possibility to professionally impact the profits of the company you work for with a professional way of doing things is, to me, rewarding. And then also I like very much the fact that you work both with numbers, but also a lot with people. There’s lots of change management in doing things well with pricing. And as a matter of fact we often started pricing projects and we ended up working on commercial operations and change management because that one unlocked the full potential of pricing you need to work on your organization, right? And eventually, you work on the value proposition of your comp. And that’s fun. I think it’s a very nice place to be in a company.
Mark Stiving
That’s a great answer. I absolutely love it. And just to pile on the first piece you said, it is so powerful, and yet so few people understand it. And so it makes us unique and important.
Paolo De Angeli
Agree. And you know very well. I’m sure, Mark, as well as many of the friends who will be following us as well. Everybody owns pricing. Nobody owns pricing, right? How many times we said that in our career, and it’s absolutely true. I think that recently, I mean, when I started, at least in Europe, the pricing profession was really niched. We were really probably few people at the beginning. I remember when I was part of the board of the European Pricing Platform, the Italian board, and we were looking for pricing practitioners to join our events. And companies will send us people that were working in transfer pricing, for example, finance, that they didn’t understand what it was about. Right?
So in the meantime, I think that the profession has developed, it’s changed. We have more professional pricing people around, but still the challenges are, as far as I can tell, are the same ones that we had 15 years ago. So, yeah, we should price our report too and how can we professionally properly position pricing in an organization. Because everybody understands what you said, Mark, but unfortunately, it’s still very difficult to have pricing professional, really top levels, in some cases, right? Which may be probably helping us as practitioners.
Mark Stiving
Yeah. So speaking of where we put pricing, can I just say that I dearly love your title, and so I’m going to repeat it again for everybody to hear. And then I just want you to riff on your title for a second, right?
Paolo De Angeli
Sure.
Mark Stiving
So his title is, I got to figure out where I wrote it down. Oh, Head of Customer Experience and Customer Value Management. Okay. What a fabulous title. Now, what does this mean?
Paolo De Angeli
So it means in a nutshell that Borealis, we recognized some years ago that there is an important link between customer experience, our value proposition, and customer value management. And with customer value management at Borealis, at least provided that, let me specify one thing that everything that I’m sharing today is really my opinions and not the one of the company I work for. Although we have, as a company, developed in the years pretty strong methodology about customer value management. So we talk about customer value creation, value quantification, communication, and capturing. And so these four areas of customer value management have lots to do with customer experience. You need to create value, differential value for your customer. And you need to constantly survey your customers to understand if what you are doing is of value for them, or if what you’re doing, where you’re investing your limited resources, not creating any value for them, then maybe you should have a thought, right?
You need to talk with your customers. This is something very important because they’re often times I see customer value management and not implement it until the end. So lots of companies create value models internally, they discuss the value proposition, but they’re afraid of going out and having value conversations. And then again, the link with customer experience is about listening to what customers are telling us. When we launch a customer engagement service, they give us lots of very good suggestions and advice on how we can improve our value proposition. And this is kind of off the bat if you wish that we decided to commit a couple of years ago to formalize this link to make sure that people in the organization and also outside understand that we really are interested in understanding what customers think of us.
We really are following up as soon as we can on the feedback they give us, because this is a very important input to our value proposition. So everything that we do internally, when we challenge our value proposition, and we try to understand where our differential value is, comes not only from our internal perception, our experts internally, sales managers, marketing managers, supply chain managers, customer service, the years I’ve interviewed many colleagues but also and above all from what our customers are telling us. So the link is there and needs to be reinforced, and that’s why we created this role as clearly as possible.
Mark Stiving
Nice. I’m going to jump back to the link between those two in just a second, but I want to repeat what I think I heard you say, which was incredibly powerful and you said it so quickly that I want to make sure everybody gets to hear this. And that is, you define customer value management as value creation, value quantification, value communication, and value capture. By the way, I think this way all the time. I’ve never defined it as customer value management. I love that for a reason and the way you think about it. And so, first off, listeners, if you get a chance, write those down. Those were brilliant, right? And you should be focused on all of those. Now, how does customer experience tie back into those, right? So I can imagine customer experience fitting really well in, I usually say the phrase proven value as in, how much value did I prove to you that I generated? But the four that you just talked about, I almost think of more as how do I capture new customers?
Paolo De Angeli
Well yes and no. I mean, we also work a lot with existing customers and existing businesses. And actually let me clarify this. I think that if we want to simplify two main applications for customer value management, the way I described it, one is when you launch a new solution in the market, you need to have a differential value, a compelling value proposition, so that you need to be convincing both internally and externally and explain why anyone in the world should be interested in buying from you this new solution and not an existing one. So that’s where I support my colleagues with customer value management, doing the quantification of the value proposition, and eventually in the definition of the right price positioning the right target price. And here, what I also do, I use value maps, value walks, and Van Westendorp methodology and kind of try to triangulate, if you wish, the output of this three analysis, because I think it’s very, very powerful because on one end you may learn that the value walk is projecting a lower price than what whatever Van Westendorp is saying, for example.
And this is an important learning in terms of did I quantify everything? Are customers seeing something that I don’t see? On the other hand, vice versa, if the projected price from value walk is higher than the Van Westendorp you have the possibility will be better on your value communication, maybe they’re not capturing the full value that you think you’re delivering, right? So that’s one area. And the other area is an existing business which is often also protecting your current price levels. It’s not only increasing your prices, but as I typically say to my colleagues, even avoiding discounts is a price increase. So if you can use your value walk, your value proposition to protect a certain price level, if they challenge you on the fact that you are too expensive, then you did your job right as well. And so it’s not only for new customers or new solutions, but it’s also an existing business.
And how does customer experience relate to customer value management? In my opinion, at least what I observed is that the customer experience and customer value management are not two different things. They are not too standalone projects or standalone topics for the commercial organizations, they’re part of a big picture. What I typically call like, kind of the commercial operations wheel, if you wish. So, and you can start from wherever, but at a very high level I think that you can start with customer experience. You ask your customers where you are better than your competitors, what you’re doing particularly well, and where you can improve. You listen, you consolidate the feedback, you challenge your value proposition. Once you have a clear understanding of what your differential value proposition is, and you’re ready for customer value management, and you feed this wheel, this fourth area of customer value management that I was mentioning, you feed this wheel and you start to quantify the value proposition, you start communicating.
You ask for your fair share with value capturing, which can be value-based pricing, right? You can ask for a higher share wallet, reducing the cost to serve, right? And then once you do this, then you’re ready. When your quantified value proposition is clear you’re ready to support your colleagues in defining the right target price, the right price positioning, you’re ready to support your commercial colleagues in like high level commercial guidelines. How to contract, how to, again, position your solutions in the market with a strong understanding of your differential value proposition. And then you enter contract management, your sales guys, your colleagues are out and they try to contract following these guidelines, try to make sure that they respect your value proposition. And then you execute, you manage with exceptions. And after you execute, once again, you ask your customers, how did I do, did I perform well?
Is my value proposition helping you make more money? Or can I improve? And then you start again with the same wheel, right? So it’s not necessarily that we should look at these two areas as two standalone concepts, but they’re absolutely part of a big commercial operation. And this is how I think we should position in the eyes of our marketing and sales colleagues, that otherwise they think of this as an additional work, an additional exercise there to run. No, this is something that is a tool in their pockets, right? To support them selling better eventually. I hope I answer the question.
Mark Stiving
Yeah, absolutely. And so customer experience is a way for us to manage or measure, are we actually delivering the value that we told a client that we were going to be able to deliver? It’s a way for us to learn where our holes are so that we can then go back and refill those holes and deliver even more value in the future and communicate value better in this entire wheel that you put together. So that makes a ton of sense. So here’s a hard question for you. Customer says to you, ‘I don’t like this color red, could you make it blue for me?’ And so that’s a customer experience problem, but it probably has zero value to anybody. How do you handle that?
Paolo De Angeli
So we have a structured methodology to look at customer needs. And before answering your question, Mark, let me stress one thing that I said before that at least to me is very relevant. We need to have more customer value conversations. We need to promote customer value conversations in our pricing or customer value management and network or practitioners. Because still what I observe is that many companies around this exercise internally, but fear going out and having conversations on the value propositions with customers. And as far as my experience goes, customers are happy to have conversations on value propositions. In more than 15 years, I’ve done this job, I was never thrown out of the window because I asked a customer how can I help you be more profitable? What can I do to help you do your job better? Okay, so back to your question.
Mark Stiving
Wait. No, not yet. So why are companies afraid to have these value conversations?
Paolo De Angeli
I think that’s my way of reading things, companies are afraid of customers destroying their hypothesis when it comes to you going with your formulas or with your hypothesis or quantifying the value propositioning. I think that companies are afraid that customers will not talk, will not share, and will destroy these hypotheses and negotiate on price. And the solution for this is to build, and I really mean this, to build a relationship that is more going in the direction of partnership than a transaction with your customers. Not all customers are ready. Not all customers will share the information you need, but it’s of paramount importance that the two companies trust each other, and that the conversation is on the value proposition. So I typically facilitate these workshops with customers, and I start with some ground rules.
And I’m the bad guy sometimes in these workshops when I have, of course, my colleagues from sales and all the relevant people that are representing the functions where we believe we are delivering extra value, okay? And I say, ‘I need to stop you if this conversation goes in the direction of price. Because we’re here to talk about our value proposition. We have to talk about value creation. We’ll first validate our hypothesis on the present because we want to agree that every year you make X percent more with us than with an X best alternative. And we’re here together to identify areas to create more value so you can move from X percent to Y percent. And if we start talking about that complaint that we still didn’t solve or that price that is too high, perfect, I’ll stop the conversation.
We’ll park it in the parking lot, we’ll address it. But that’s not a topic of this conversation. And this helps a lot in building this relationship on value. Because another common mistake I’ve seen is when we go to a customer, we have a one hour meeting. We have on the agenda five topics. We talk about how we see the market, we talk about our new product, we talk about a particular complaint that’s still open. And there is an important fair. I would like to meet you at a fair, and by the way, we still have 10 minutes, I will talk about a value proposition, right? That’s not, in my opinion, my way of doing things. We should have a dedicated meeting. We typically do two hours maximum on the value proposition. We have a standard structured way of working, as I mentioned. First the current, we validate the hypothesis on the current value proposition.
And then back to your question, we ask and now be creative. Tell us everything you wish us to work on or invest more resources so that you can make more money with us. And then we compile a list and we manage expectations. Not everything you’ll tell us you want a red color, for example, will be possible. But what we can commit on is that we come back home, we look at your list, we define out of the, I don’t know, 10 items, the top three that we can or want to work on. And in two, three months we have the second workshop we discuss about what we think is realistic. We propose an accountable person from our side and from your side, because it’s a joint project, and will be responsible for project one, two, and three. And best of all, if we manage, we already put some figures, this project will deliver this extra X thousand or millions Euro dollars and so on.
And this helps us move from X percent to Y percent. And this is of course, as to my experience, one of the most difficult steps, honestly, of the full process. But managing expectations back to your question is the most important thing, because it’s not just because they ask for something that they will get it, but it’s, yeah, I think that what we owe our customers to listen to them, have a conversation on why certain things are possible and others are not, and then have a joint collaboration on what’s possible, right?
Mark Stiving
Okay. So I have to say that I dearly love that whole conversation that you have with the client, the whole value conversation. I think that’s brilliant. and when you come up with a list of 10 different things that they want, right? They say, Hey, these are the things I want. I’m really curious, do you go through each of those 10 with the client and say, how much more money will you make if we can do this for you?
Paolo De Angeli
Yeah. We prioritize, as I said, first, right? So out of the 10 items, we do some homework and we define…
Mark Stiving
But my question, I’m sorry, was, do you ask the customer that, so if we can do this thing that you asked for, how much more money does that make you?
Paolo De Angeli
That is part of the methodology we follow. As I said, this is, to be honest and transparent, probably the most difficult part of the full process because I had less issues in getting to an agreement with the customers on the current differential value proposition than on estimating how much more money they can make thanks to the initiative, which is two months old, right? But, for me, it is very important that we try hard to do this because it’s only if both parties see the additional impact that we can commit on running a project, right? Because otherwise it becomes, again, marketing, blah, blah, as I sometimes say, right? Then it’s easy.
Everybody can say, I am more sustainable than my next best alternative, but unless you show me the money, right? Or, I can tell you, with me, you’ll be more profitable. But unless we agree on the roadmap and even the range is good enough, right, Mark? We don’t need to be precise. But even to say, we expect now we’re at X percent, so the total quantified differential value proposition per year divided by, I don’t know, the revenues, and tomorrow we can add between Y and Z percent based on this and that is good enough to create the commitment to the parties to work on fewer things, but concretely, and then of course, we follow up that, and back to your question, absolutely, yes. We should be able, we should be in the position to agree on these numbers with the customer. Yeah.
Mark Stiving
Nice. Any hints on how to get to that number with the customer? They just say, I don’t know. What do you ask? How do you do the probing?
Paolo De Angeli
Yeah, so that’s a very good question because I think by the way, that that’s where lots of companies fail. I think it’s the suppliers responsibility to come up with a thought process and eventually with some numbers that customers need to validate exactly in line with what you do when you quantify the current differential value proposition that we can prepare, they need to be available as much as possible to answer transparently and honestly, based on their experience to understand if our hypothesis are right, but we come prepared. And what I observe is that often it’s not the number that matters. So the number needs to be realistic enough to initiate a conversation, but what matters the most is the thought process. So I think I’m more reliable than anybody else when it comes to supply reliability.
What does it mean in practical terms for your business? Means that if you buy from me, you can rest assured that you have a 2% higher chance you’ll get the material in the right place, the material you order at the right time. What does it mean? It means that with me, you can have less safety stock. So that turns out to be less warehousing cost, for example, right? So you need to spend less money or invest less money in your premises for my products and the next best alternative. And then you enter in showing some figures, some hypotheses. This thought process oftentimes is what many companies fail in preparing. And that’s where the conversation on the quantified differential value proposition typically then stops. And it’s very important and the same ideas, the same thought process you should have when you think about the future, right?
So we have agreed that, yes, you had a brilliant idea, and should develop a more sustainable solution. I discussed internally we’re willing to work in the next two years in providing you with more sustainable solutions. What does this mean? We think that you can be better than your competitors and sell more volumes or sell with a higher premium price or avoid paying some fees, right? And this is what we see. How do you see it, customer? Does it make sense in terms of the process? Yes, it does, but this doesn’t resonate so much. Okay, let’s remove this last one from the formulas on the thought process that you agree on. We think that the realistic number is 10, it’s more, like, eight. Perfect. Let’s agree on eight. And then you proceed like that, right? And that’s at least my experience.
Mark Stiving
Yeah. And so I’m going to take what you just said and summarize it in the following sense. And I talk about this a lot, and that is, what KPIs are we about to move in our customer, right? It isn’t just profit, it’s productivity, it’s increased ASP, it’s increased close rate. There’s a bunch of KPIs that our customers care about that we can then turn into increased profit once we understand what those KPIs are. And so your point is, we have to walk in the door with a really good feel for what are the KPIs that the customer cares about, and that we believe we can move.
Paolo De Angeli
Yes, absolutely. Let me maybe take a step back because before understanding the KPIs, again, I’m about to say something very simple and I’m sure very well known, but often forgotten. We need to understand their needs. We need to understand what their problems are. And again, what I describe in terms of process follows years of working with your customers to create the right intimacy, the right partnership to really understand what their problems are, back to customer experience, right? You need to ask for open feedback and do something with this feedback. When they tell you what you should do to be a better supplier. And once you understand their needs, then you’re ready to talk about their KPIs.
My experience is that it’s important to agree on the KPIs, but what matters is, again, to understand what their problems are and help them understand the profit equation. Super simple, often forgotten, revenues minus cost. So if you are not able to improve their prices, their volumes, their fixed cost, or their variable cost, simple as this, but often forgotten, then you have a problem. It’s as simple as this. So you can go through an endless list of KPIs, but eventually, if you’re able to prove that thanks to you, they can improve one or more of these four, let’s call them KPIs, the profit equation. Then you’re good to go, right?
Mark Stiving
Yep. So, I have to say, Paolo, you and I think almost identically, so I’m going to ask you the hard question, right? Someone says to you, I need this to be red instead of blue. What they just asked you for was a feature. How do you turn that into a problem?
Paolo De Angeli
That’s a good question. I think that the answer lies a little bit in what we just said, meaning that oftentimes companies just listen to what customers are asking, but they fail to listen to the problem behind the request. And again, I think the answer to this is to try to understand what their needs are and try to understand what they’re really after, what their problems are. And this doesn’t come out of a two-hour workshop. Just to be clear, as I said, right? It comes from asking your customers, reading their feedback.
I’m still so surprised when I talk with colleagues, friends, and peers, how much information is collected in customer engagement service and how often they are not read, they’re not digested, they’re not summarized. I made a commitment when I became head of CX and CVN Borealis to move a follow up to customers from six months, the situation I found, to six weeks, because, if you are a customer and you give me feedback, and it takes me six months to to hear from you and tell me how you’re going to address this red collar request, and then there is a problem in terms of customer experience. So back to your question, yeah, it’s a process that may last years. It’s a constant fine tune that should help suppliers understand what their customer’s requests really mean, right?
Mark Stiving
Yep. Nice. And so I’m going to give a hint to you and to all the listeners, by the way, and this is what I would always say, if someone asked me for a new feature, really simple question, what problem does that solve? Right?
Paolo De Angeli
Yeah, that’s a good point. Why, right? Why are you asking this? And what I try to say with my answer is that sometimes it’s also difficult for the customer to clearly explain, right? Because sometimes things are very difficult, and if a company is able to read the real problems because of this good relationship with that customer then it’s easier also to help each other, right? So, because sometimes I only ask, why are you asking this may not lead necessarily to the solution, at least in this two hours workshop, right? So we need to look at customer value management as I mentioned, as one important element of the big picture, the big commercial relationship, and invest in this relationship because eventually as I typically say it’s a win-win. The one we should lose is your competitor, right? If you are good at this, you win, your customer wins. And then when you see the results coming not only for your customer’s profit, but also on your side, because you’re able to capture your fair share of the value.
Mark Stiving
Nice. Paolo, we are out of time, but I’m going to ask the final question. What is one piece of pricing advice you would give our listeners that you think could have a big impact on their business?
Paolo De Angeli
Don’t give up, because often it’s challenging. Often you find people that think they have the solution. If you are a pricing practitioner, you spend time learning, investing, maybe like I did, taking some certification like the Professional Pricing Society, or you’ve been involved in the network, you are entitled to share your opinions. And don’t give up because oftentimes people are afraid of sharing opinions because we still consider a pricing practitioner as a niche, and we should respectfully, of course, position our opinions in the light of senior leaders. So don’t give up.
Mark Stiving
Nice. Focus on change management, focus on the soft skills. Yeah.
Paolo De Angeli
Absolutely. Almost half, I would say, of the pricing job is change management, they say, and I personally agree with this. Yeah.
Mark Stiving
Yeah. Paolo, thank you so much for your time today. If anybody wants to contact you, how can they do that?
Paolo De Angeli
Best would be to look on LinkedIn, Paolo De Angeli, CPP, is my profile. You can look on LinkedIn and find me.
Mark Stiving
Okay. And we’ll have the link in the show notes. And to our listeners, thank you 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 the podcast, or if your company needs help getting paid more for the value you deliver, feel free to email me, mark@impact pricing.com. Now, go make an impact!
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