Impact Pricing Podcast

Sarah Williams, founder and CEO of Leading Culture and former director at GAP Consulting for 23 years, brings her accounting background and business growth strategy expertise to a spirited debate about ROI, value-based pricing, and why companies leave money on the table. 

From her home in New Zealand (Mark’s second favorite country), Sarah challenges conventional pricing wisdom—arguing that ROI applies to both B2B and B2C, that we should ignore competitors when determining value, and that the antidote to the curse of knowledge is thinking with a beginner’s mind. 

Mark pushes back on opportunity costs, explains why competitor pricing matters, and uses everything from vests to Louis Vuitton handbags to make his points in this engaging conversation about helping customers understand the true value of what they’re buying.

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Why you have to check out today’s podcast:

• Understand why teaching customers to think in ROI is the fastest way to eliminate buyer’s remorse, increase prices, and differentiate from competitors who focus on features.
• Discover the beginner’s mind approach that prevents the #1 mistake pricing experts make—assuming customers know what seems “obvious” to you.
• Master vulnerability-based trust by inviting customers to ask questions without fear—the counterintuitive sales technique that accelerates deals faster than “looking professional”.

“Think in terms of value from the customer’s perspective.“

– Sarah Williams

Topics Covered:

03:01 – Why ROI should be everyone’s decision-making framework

06:10 – Helping customers think in ROI terms: Your job as the provider

08:12 – Utility in economics: The B2C zlternative to monetary ROI

20:00 – The opportunity cost debate: Pricing vs. budgeting decisions

25:19 – Differentiation value: Starting with competitor’s price, then adding

27:57 – Louis Vuitton vs. $40 handbags: Conspicuous consumption and what people really buy

32:31 – Starting with a blank slate: Thinking myopically about customer value

35:32 – Final advice: Think in terms of value from the customer’s perspective

Key Takeaways:

ROI on its own can be a decision-making framework. From the point of view of maybe even making a personal decision, I can think about, well, what’s the return on investment? And that might even be an investment of my time.” – Sarah Williams

“We’re doing our customers a disservice if we’re not helping them to think in terms of ROI. Like, what really am I getting? Because buyer’s remorse is really, really prevalent. People make split-second decisions now and then live to regret it 24 hours later.” – Sarah Williams

“In economics, there’s this concept called utility, right? So, I think in terms of when you’re thinking B2C, now you’re shifting the conversation a little bit more towards the utility angle in economics.” – Sarah Williams

Resources and People Mentioned:

• Jim Collins: Author of “Good to Great”
• Chip and Dan Heath: Authors of “Made to Stick” and the concept of the curse of knowledge
• Patrick Lencioni: Leadership expert who popularized vulnerability-based trust and predictive trust concepts
• GAP Consulting: Where Sarah served as director for 23 years
• Complete Learning Solutions: Where Sarah was Chief Inspiration Officer
• Louis Vuitton: Used as example of luxury pricing vs. commodity pricing
• iPhone: Example of blue ocean differentiation where customers don’t compare competitor prices
• Huawei: Mentioned as iPhone alternative that iPhone users don’t consider when upgrading

Connect with Sarah Williams:

• Email: [email protected]
• Website: https://www.leadingculture.co.nz/home 
• AI Summit Link: https://www.leadingculture.co.nz/ai-summit-registration-page

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.)

Sarah Williams

Think in terms of value from the customer’s perspective.

[Intro / Ad]

Mark Stiving

Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the undeniable relationship between them. I’m Mark Stiving, Chief Educator at Impact Pricing, and we offer programs to help your company get paid more. Our guest today is Sarah Williams. Here are three things you want to know about Sarah before we start. 

She is the founder and CEO of Leading Culture. She’s been doing that for six years. She was the director at GAP Consulting for 23 years. She was a chief inspiration officer, what a fabulous title, at Complete Learning Solutions. And possibly my favorite thing about the few moments I’ve spent with her so far, she’s from my second favorite country in the world, New Zealand. Welcome, Sarah.

Sarah Williams

Well, kia ora Mark, wonderful to be here. Thank you so much for having me.

Mark Stiving

Oh, it’s going to be fun. Just from the brief conversation, I could tell this is going to be fun. Okay. So, first question, always, how did you get into pricing?

Sarah Williams

Wow. Okay. So I’m a business growth strategist, formerly an accountant. And as part of the work that I do as a business growth strategist, I started to realize that a lot of my clients were leaving some things on the table that I kind of thought were obvious. And one of those was pricing. And so I find myself in conversations about pricing and I’m hoping that we’ll have a few debates around this today, Mark, because I find myself in conversations around pricing all the time with my clients. And as I said before, they’re leaving money on the table and it bothers me greatly.

Mark Stiving

As it should. And can I say that very, very few companies do pricing well. There’s many, many reasons for that, but very few do. So it doesn’t surprise me at all that you find companies that need pricing help. One of the things that you wrote to me is ROI. In fact, you said the words ROI a whole bunch of times. 

How do you do ROI in pricing? And trust me, I have a technique too, so I’m gonna be, before I hit record, by the way, for the audience, I told Sarah that I might argue with her just because I wanna argue with her and take the other side, because I have a feeling we agree on way too many things. So go ahead, let’s hear it. How do you use ROI?

Sarah Williams

Okay, so a few approaches, and one of the reasons I reached out to you, Mark, is because of your, I’m gonna call it a bias, towards value-based pricing. I really believe that the world should have more value-based pricing. And ROI, to me, is one of those things that I thought everybody did. They thought in terms of what is the return on investment that I am, in this case, offering to my clients? 

And so, that’s why I mentioned it so many times when I reached out to you because I am very passionate about ROI. I believe that ROI on its own can be a decision-making framework. So from the point of view of maybe even making a personal decision, I can think about, well, what’s the return on investment? And that might even be an investment of my time. It may not necessarily be monetary. But we’re here today to talk about ROI in relation to pricing. 

And when I think about ROI in relation to pricing, I’m encouraging my clients to really put themselves in their customers’ shoes and say, well, what is the return on investment that they’re going to get if they shell out their hard-earned, precious money to you in return for the product? So I’m asking them to think about things like, is there an opportunity cost here? So, are there things like, if I use this product, for example, will I save time? 

You know, like that’s a classic one. How do people value time? Well, that’s a personal decision, right? My time might be incredibly valuable to me because I have so little of it versus somebody else who might have a lot of time and not feel like it’s nearly as valuable. So there’s that trade-off piece around ROI. And then thinking about the value that the product or service is actually bringing into the customer’s life as well. 

So I almost think about it in terms of the opportunity cost, like past focus. So what is it that I’m going to trade off? What am I going to win through that? And then future focus, what is the value that this is going to bring? And this is kind of the conversation that we’re really talking about. What is the value that this is going to bring? What might this open up in terms of possibilities in my customer’s life? 

And I think that’s probably a place where people struggle a little bit more because it’s asking for. broader thinking, I suppose, you know, like it’s really getting my clients to put themselves in their customer’s shoes and be able to go, okay, what now becomes possible for my customers? And it’s exciting work. I won’t deny that when they get into that, it’s incredibly exciting work. 

And so then they can start to build out based on the kind of the swap out. Am I getting some sort of. I believe you would probably talk about it in terms of productivity gains, those sorts of things. Am I getting that? But also, what’s the additional value that this product or service is bringing? And when you start to put those together, you can create a really compelling return on investment.

Mark Stiving

Okay. By the way, you did say one thing I disagreed with, but I’m not going to get to that yet. Before I get to that, I want to push back on the concept of ROI. And what would you say if one of your clients says to you, yeah, but my customers don’t think in ROI?

Sarah Williams

Well, I’d agree with them. I absolutely agree with them. And I think it’s our job as the provider of the product or service to help our customers to think in terms of ROI. I think that today more than ever, we have got a society where oftentimes very surface level decision making is happening, right? We’re doing our customers a disservice if we’re not helping them to think in terms of ROI. Like, what really am I getting? 

Because, you know, buyer’s remorse is really, really prevalent. People make split-second decisions now and then live to regret it 24 hours later. And so if you haven’t done a good job in really highlighting the value or the return on investment that they’re going to get, you’re going to end up with things like refunds and returns and those sorts of things. Yeah.

Mark Stiving

One of my favorite things when I work with salespeople is I tell them, if a client asks you for help with a business case, that is gold. Because they’re essentially saying, hey, I need to figure out the ROI. Help me do that. And that’s really what we’re talking about when we say, do ROI. We’re saying, hey, can you help them with the business case? So in B2B, this makes sense. Here’s a hard question for you. When I bought this vest, what was my ROI?

Sarah Williams

Wow. Okay. Well, I’d have a few questions for you. First of all, what did you have beforehand? Did you have a previous vest?

Mark Stiving

So I think you’re going to miss the point here. It’s B2C versus B2B. I think in B2B, you and I, as an accountant especially, think in terms of how much more money am I gonna make because I bought this thing and used it? As a consumer, I don’t make any more money because I bought and wore this vest.

Sarah Williams

Yeah, totally. But my argument to that is, in economics, you’d be all across this, there’s this concept called utility, right? In economics, right? So I think in terms of when you’re thinking B2C, now you’re shifting the conversation a little bit more towards the utility angle in economics. Like, what is the utility of this product? And therefore, what will that consumer end up realizing there’s still an ROI there. You can’t argue that one out of me. 

There’s still an ROI, and I believe there’s still a duty of care by the company to share that ROI with the customer. And they do. You think about marketing messages that you see all the time. That is them describing the ROI to you. Like that’s what the marketing messages are. You know, like your vest, for example, it might be made of beautiful New Zealand Merino wool, for example, right? Just drop it a little bit there. But, you know, it might be made of that. 

Therefore you’ve got, you know, moisture wicking qualities. It’s warm, it’s thin, it’s durable, like all of those pieces, right? That’s describing ROI in a way that consumers really think about, because you’re right, like B2B, B2B is thinking about monetary value. What does this mean to my bottom line? Like all of that sort of stuff. Consumers aren’t thinking in that way, not at all, but they are thinking in terms of utility, but we have to help them connect the dots.

Mark Stiving

Okay, so I think what we’ll just do is disagree on some definitions, but I think we’re in the right spot. So when I think of – I rarely use ROI unless I’m actually talking to a business. And so what I – I have a few definitions. You can tell me if you like these or don’t. But one of them is value, and value is the result of solving problems. 

And so, now you can tell me all about my vest and whether it’s merino wool and what problems I have and what results I’m going to get when I solve those problems. And I’m totally 100% with you in maximizing value. I always say buyers trade money for value, right? And then in B2B, value is measured in incremental profit. It’s in dollars. Or New Zealand dollars, right? Take your pick. But the point is–

Sarah Williams

I think you’d want to pick US over New Zealand. You’ve got a stronger currency for sure.

Mark Stiving

But the point is value is measured in dollars in B2B and value is not measured in dollars. You can call it utils or utility or something. But I just stop at the result of solving problems. I don’t go on to say ROI because I don’t picture a vest of having ROI unless you, I mean, as an accountant, you could not put a number on this.

Sarah Williams

I could try. Just saying.

Mark Stiving

Of course.

Sarah Williams

There’s always a number for everything in my world. I love that definition and I would love to see more businesses think in that term as well, because the contrast that, you know, like I work obviously business to business a lot more, but those businesses are serving consumers and a lot of cases, right? So they’re having to straddle both of those worlds. 

So their marketing messages are consumer facing. Internally, they’re focused on bottom line, you know, impact on profit, those sorts of things, or other metrics. But, you know, they are very much in a space of still having to think about value when they’re thinking about pricing. And I just don’t think they think deep enough about it.

Mark Stiving

They don’t understand it. So what’s fascinating is companies tend not to know how their customers perceive the value of their products. So if you took pricing out of the picture for a second, it doesn’t really matter. They don’t get why customers really care. They see that someone bought it and they’re like, oh, isn’t that really cool, they bought it. And so they try to force fit what one customer bought into every customer.

Sarah Williams

So I think what you’ve just described is the difference between, you know, if we take the term good to great, right. From Jim Collins’s work. I think what you’ve just described is that difference. I think that the businesses that I work with that are doing an outstanding job are really diving into this concept, where is the value for my customer? How do I enhance that value for my customer? How do I help them to understand where the value is? 

Because so much of it in many cases is still an education piece, whether they’re going B2B or B2C. But I agree with you entirely. I think the danger is that, and I think all of us are guilty of this. The danger is that we go, of course people will know this. Of course people, I mean, I just started the call by saying, of course people will know about ROI. Of course they will. And so we make this mistake all the time, and therefore, we’re really leaving money on the table.

Mark Stiving

Huge, huge. Yeah. So I read this in a different book, Made to Stick, by Chip and- Dan Heath? Dan Heath. There we go, thank you, yes. Chip and Dan Heath. And they talked about the curse of knowledge. And the curse of knowledge is when you know something so well, you have forgotten what it’s like to not know it. 

And so, when you think everybody knows ROI, it’s because you know it so well. It’s like the way you think. And so when I talk about, not me personally, but when someone talks about their product features, they assume that when I mentioned this feature, everybody knows what problems it solves and what results they’re gonna get. And it turns out they don’t.

Sarah Williams

Yeah. So, so true. And the worst thing about that as well is that, especially in a corporate situation, nobody wants to look stupid, right? So they don’t want to go, oh, sorry, I don’t actually understand that term. Can you explain that? Nobody wants to say that. So they just go through the presentation, the meeting going, Oh, okay. Well, obviously everybody else understood it. 

And then I have literally witnessed this and the meeting afterwards, they’re all sitting around going, does anyone know what that was all about? You know, so this poor company has walked out thinking they did a great job of the sales presentation and it turns out, no, they didn’t at all because the customer was lost. So my antidote to that is I talk to my clients about. Thinking of it with the beginner’s mind. So the curse of knowledge, alive and well, totally. 

And the antidote to the curse of knowledge is to think about it with the beginner’s mind. Imagine that this customer has never seen this before. Imagine, if you need to, that they’ve come from another planet, they’ve just landed here on Earth, and this is the first time they’re experiencing any of this. And then start from that place. It’s not a case of dumbing things down, but it’s a case of making sure that you explain the things that are very inherent within your organization. 

I’m sure that you’ve come across this as well, Mark. There are so many organizations that have their own internal language. You know, I work a lot in organizational culture and one of the things that I uncover for them is the internal language that they have. And because they have this internal language, this unique way of describing things, they talk in, like code almost. 

And the customer is left going, what were they talking about? So yeah, it can be a very interesting thing, especially when they’re trying to articulate the value of their product. And you know, I know that I’m just as bad at this as everybody else because I have the curse of knowledge.

Mark Stiving

Of course, we all do, we all do. So I have to say one of the things, one of the huge advantages of getting old, which I am, was I no longer cared what people thought so much. And so, it just doesn’t bug me to say, I don’t know what you’re talking about. 

I don’t know what that means. And it is so freeing. And in fact, as you were talking, I was thinking about that and I said, you know, if I ever don’t say that, it’s because I’ve checked out of the conversation and I just don’t care.

Sarah Williams

Yeah. Yeah. Yeah. And, you know, I, I hope that there are more people that are braver to be able to do that. Unfortunately, still, and certainly in corporate culture, there’s this whole concept of losing face and I don’t want to look like an idiot or whatever. And so they don’t want to say things like that, but it’s to their own detriment without doubt. So, you know, I hope that there’s more people like you, Mark, sitting in these meetings.

Mark Stiving

So what’s interesting is the thing that I’ve found as I’ve learned to do that, you change your attitude from I’m trying to look good to I’m trying to solve a problem. And so if we’re all focused on how do I solve this problem, then you absolutely look good. You look way better than trying to look good. So go try to solve problems, change your focus. It makes a huge difference.

Sarah Williams

Oh, for sure. And, you know, I spend a lot of time with executive teams. And one of the things I talk about with executive teams, and one of the greatest team building activities that you can do, is vulnerability-based trust, is building trust within an organization, within a team. And vulnerability-based trust is the fastest way to do that. This was popularized by Patrick Lencioni. 

And he talks about it in terms of, you know, there’s predictive trust. After a period of time, I get to know you and I know that you’ll respond in a certain way. And then there’s vulnerability-based trust, which can be developed instantaneously. But it means that for me to help to develop vulnerability-based trust, I need to portray it, right? 

And so, when you think about it in terms of, and I’m talking about it in the context of B2B, but in terms of a sales meeting, for example, so you’re there with your, you know, the business is there with their customer presenting their products. That might look like vulnerability-based trust might look like, hey, today I’m going to go through this, you know, product, this widget. 

There’s probably going to be some things that I might use some terminology that doesn’t make any sense to you and is out of context. Trust me, I didn’t know it either when I first started with this company. I really want you, as soon as you hear a word that you don’t understand, just yell out to me and I’ll make sure I clarify it for you, right? 

So I’ve invited people to be vulnerable in those moments when I’m presenting my product or service, because I can’t get away from the fact that I have the curse of knowledge. So I can’t be inside somebody’s head to work out what it is that they know or don’t know. So I’m just opening up the door for them to be able to ask questions.

Mark Stiving

I think that’s brilliant. I spend a lot of my time trying to educate people. And so I think really, really hard about what they don’t know. And so I struggle with that. I mean, everybody does, but I at least focus on it.

Sarah Williams

Yeah. And you know, I love to think in terms of a hypothesis, right? So I like to think in terms of, I develop a hypothesis and then I have to go out there and test it, right? And so, particularly with this aspect of things, you know, what we know and what we don’t know, what we assume others know, what we assume they don’t know. 

I approach it from the point of view of, I’ve got this hypothesis. I think that this is what they know, but I’m so prepared to be proven wrong on that and to have to be nimble on my feet, double back, and make sure I explain myself a bit clearer.

Mark Stiving

Yeah. Nice. Nice. Okay. I’m going to circle back to your opening dialogue when you said something I disagreed with.

Sarah Williams

Yes. Lay it on me, Mark.

Mark Stiving

Well, when you said the words opportunity cost. Okay. So let’s talk about opportunity costs for a second. There are certain places where opportunity costs make sense. Pricing is not one of them. And so, here’s why.

Sarah Williams

Okay.

Mark Stiving

Imagine that I want to buy a new refrigerator, right? And I’ve got one in mind. My opportunity cost is the second best alternative. So my opportunity cost is if I buy this one, then I’m not going to buy that one. And so, instead of thinking of opportunity costs in the world of pricing, we tend to think in terms of differentiation or difference in pricing or best alternative to something. I don’t remember what it is. 

But we tend not to think in terms of opportunity costs as much as we think in terms of who’s the competitor that’s being considered at the moment. Now I could see opportunity costs playing a role if you were talking about budgeting, right? I’ve got $500,000 I get to spend. Am I going to put it in HR or am I going to put it in manufacturing? So now I’ve got opportunity costs because these aren’t really competitive alternatives.

Sarah Williams

Interesting. So I see, I am going to argue this one out with you. So I see when it comes to pricing, I see that there is the path of we’re looking at pricing and you know, this is a natural thing, right? If somebody is trying to find out, is this good value for me, then comparative pricing is the place that they’ll go to cause it’s the easiest way to do it. Okay, I’ll look at, you know, I’ll compare the benefits and features of this fridge versus this fridge, right? 

Oh, sorry, we call it a fridge, not a refrigerator. We can’t be bothered with all the syllables. So, you know, am I going to buy this one or this one? However, the deeper conversation I still think has a lot to do with opportunity cost because I am investing my money in a fridge, but I could invest my money in something else completely. 

So, there’s still that concept even in the consumer world, I think. It’s much easier to debate and argue in the business world because that is kind of the modus operandi. I don’t think that that’s necessarily how a consumer thinks. I think about it that way. So maybe I’m just unique in that concept, but I might be thinking, okay, if I park, I don’t know, what’s a refrigerator? 

We bought one last year, $6,000 I think we spent on the refrigerator. If I pack $6,000 here, what’s the opportunity cost? Where else could I have put that $6,000? What else could I be buying? I mean, that buys me a lot of shoes and handbags, Mark. You know, like, you know, there’s an opportunity cost right there.

Mark Stiving

Okay. I buy what you’re saying. Let me share with you how I think about it. And then, by the way, it doesn’t mean one’s right, one’s wrong.

Sarah Williams

Not at all.

Mark Stiving

But I tend to think that buyers make two different decisions. The first decision we make is, will I buy something in the product category? And so will I buy a new refrigerator? The second decision we make is, which one am I going to go buy? I could see the argument that says opportunity cost matters on the ‘will I’ decision. Am I going to go buy a new refrigerator? But on the other hand, what I almost always say is price isn’t driving that decision. 

You’re not sitting around saying, you know, my refrigerator works great, but I think it would be really nice to get a new refrigerator. You wait till your refrigerator breaks. It’s like, oh my God, the food’s spoiling. We better get something as fast as we can. Yes, I’m going to go buy a new refrigerator. And so we tend not to think about the alternatives when we’re making that ‘will I’ decision.

Sarah Williams

Yeah, totally. Yeah, I totally agree with that. Opportunity cost definitely starts at that first decision. Will I go and buy in the product category? Then when we get into the pricing, then opportunity cost is not, yeah, is not as, no, it doesn’t feature in that decision. That’s when the value really has to come in, right?

Mark Stiving

Especially the differentiation value. How am I different from my competitors? How am I better than my competitors?

Sarah Williams

And when you’re talking with companies, now I’m going to interview you, when you’re talking with companies about that differentiation factor or those differentiation factors, how are you helping them to work out the pricing factor of that?

Mark Stiving

So first off, the way it typically would work is you start with whatever the competitor’s price is. And then assuming that you’re a better product, I’m just going to make that assumption. You take the value of what it is you have that’s different and you get to add some portion of that to the competitor’s price. Now, how much can you add? It depends on how much your buyer perceives there’s incremental value.

Sarah Williams

Yes. That’s the million dollar question, isn’t it? Because then the organization, the company has to be able to quantify, well, first of all, they have to be able to get a description from the customer about what their incremental value difference is. And then they have to be able to quantify that in some way, shape or form.

Mark Stiving

Yeah, I like to think of this as having a value conversation with your customer, where you’re trying to figure out what are the problems that your customer has. In particular, if you know that you solve some problems your competitors don’t, we focus a lot on those problems. And if we can identify what those problems are, what would be the results if we could fix those problems? And so results in business are always KPIs. 

What KPI am I going to move for you, my customer? And then if I can move a KPI from, you know, if I can move turnover from 2% to 1.5%, what does that do to your profitability? And now do we have the business acumen to go figure that out? And so let’s assume that I just showed you I’m going to make you an extra $300,000 a year. 

How much of that do I get to keep as the seller? So, I don’t get to keep $300,000. Depending on the overall price of the product, I could probably keep up to $150,000 of that. But if the price of the product is pretty low, then I’m going to keep a much smaller portion of that.

Sarah Williams

Yeah. Yeah. So tell me, cause I have this debate all the time with my customers, how do you describe the pricing differential between luxury products, and just regular products? So, I’m thinking, the one that I always pick just because it’s near and dear to my heart, Louis Vuitton handbags. 

Like you can go and buy a regular handbag for like $40. It does the job perfectly well. Half the time it’s made of good leather and stuff like that. Louis Vuitton, however, $3,500. It’s not even made of leather. It does the job, but no better than anything else. How do they get to charge $3,500?

Mark Stiving

And so, the question is, what do you think people are buying when they buy a Louis Vuitton handbag? And so, it is all about – everything I do in value is about problems and results. So what’s the problem someone has or what’s the result they’re looking for when they buy a Louis Vuitton handbag? And although I don’t really know, I don’t spend a whole lot of time in B2C type work, I would project that it is conspicuous consumption. 

I want to look like I’m successful. I want to look like a famous movie star. So it’s an image thing that I personally care about, and I’m willing to spend money to be able to project this image that I’d like to have. And so that’s the result that we’re selling. We’re not selling, hey, I can carry my wallet in a handbag.

Sarah Williams

Yeah, yeah. And this is where I go with my clients all the time because half the time they’re thinking about practical utility, right? So what is the utilization of this product? Can I carry my wallet around and maybe my drink bottle, you know, like in this handbag versus the piece of, well, actually there’s other things at play here when you’re thinking about, say, Louis Vuitton handbags, right? 

You know, like you can go and get a handbag for 40 bucks, good as gold or any kind of bag, a suitcase, you know, like their suitcases are what? $8,000, I think. You can get a regular suitcase for $150. And so there’s a very different problem that’s been solved in this situation. 

And many customers don’t think about that. So many of my clients aren’t thinking in that way. And therefore, because of that, they’re not thinking about the true value that they’re bringing to their customers and the price that people are prepared to pay as a result of it.

Mark Stiving

And here’s what’s even worse about what you just said, is if they don’t think about the value, that means they’re not communicating that value to new customers. So therefore, they’re losing deals they could have won and they’re losing them at prices that were ridiculously too low anyway.

Sarah Williams

Yeah. Yeah. So, and you know, you might want to shoot me after saying this, but sorry, that’s a totally appropriate thing to say in New Zealand. I realize it’s probably not in the US.

Mark Stiving

I’m going to tell a story on this podcast right after you finish this point because it’s so cool, but go ahead.

Sarah Williams

Oh dear, the kiwi in me is coming out. Sorry about that. So one of the things that you were talking about before was looking at where your competitors are at and then looking at the pricing differential from there. I like to try and blow my clients’ minds up and say, no, let’s just start with a blank slate of paper. I don’t care what the competitors are doing. 

I want you to think just from the point of view of your customer and just be myopic in your focus and go, what is it that we’re providing through this product or service to this customer? And therefore, how would they value it? And, you know, like I said, then we- Can I pause you? Yes.

Mark Stiving

Can I pause you?

Sarah Williams

Yes.

Mark Stiving

I get this completely. Here’s the point, right? Remember earlier when I said the will I and the which one decisions? What you’re essentially asking your customers to do is value it as though there’s no competitor, right? What’s the value of solving the problem? So quick question for you, how much value do you get out of having air to breathe?

Sarah Williams

Oh, unlimited value.

Mark Stiving

I just captured some fresh Reno air. How much will you pay me for it?

Sarah Williams

Absolutely nothing.

Mark Stiving

And that’s because, relative value, so the value of all the air you have around you is free. And so, I have no qualms with what you just did. You know, when you work with a client and say, Hey, what’s the value that you deliver to your clients? A really important question. 

But as soon as I say, I need to buy some air, then I step back and I say, okay, which air am I going to buy? And Sarah’s trying to sell me New Zealand air at a hundred dollars. And I’m like, no, I’ll just take my Reno air for free. It’s okay.

Sarah Williams

New Zealand air would be worth a hundred dollars by the way.

Mark Stiving

It would be. But the point is our buyers, when they’re making that ‘which one’ decision, they’re looking at our competitor’s price. So our competitor’s price matters. If they’re not, there’s a lot of times where people don’t look at competitor’s prices. So if you’re using an iPhone today, you are not looking at the price of a Huawei when you upgrade your iPhone. So there’s a lot of times where we don’t look at competitors’ prices, but when we do, it’s important.

Sarah Williams

Yeah. And I think this comes back to the debate about commoditizing pricing as well, because I think that those two are intertwined. When a consumer group is in a space, and I love the iPhone example, and there’s a whole lot of others as well like that, where they have differentiated themselves enough from the market that there’s no competitor, there’s no comparative, you know, like this is true. 

Like, kind of blue ocean, yeah, blue ocean territory. But what I see businesses do in particular is they go, say they’re entering into a new market space. They go in there, they start analyzing the competitors and they get stuck in the competitor’s space rather than looking for the value equation that is available through the consumer or the customer eye. 

And that’s where I try and take my, you know, I want them to think like there are no competitors in their space and start to go, OK, what would that look like? Because if they’re coming at it from that angle, then they’re having, then all the information they’re bringing out about their product or service is very value based. And it’s not like a ‘me too’ kind of a product that hasn’t entered into their thinking. 

And so, you know, I’m a firm believer that the first sale is always to yourself, right? And so if you’re really truly believing the value that you’re bringing to the marketplace through your products or services, then you’re going to be able to articulate that value and possibly end up like an iPhone and, you know, this wonderful blue ocean because you’ve articulated the value.

Mark Stiving

Yeah. So, Sarah, I have absolutely nothing against ignoring competitors. What I’d really like to see is instead of saying, let’s ignore competitors, I’d love to see you say, let’s focus exclusively on what buyers really need and what customers really need. Because sometimes they’re going to look at competitors, sometimes they’re not, and we’ve got to be focused on, what are those problems? 

Now, before you respond, I just got to say, we’re way over time already. This has been way too much fun. Quick question for you to wrap this up. What’s the one piece of pricing advice you’d give our listeners that you think could have a big impact on their business?

Sarah Williams

Think in terms of value from the customer’s perspective.

Mark Stiving

Brilliant. And that’s probably the shortest answer you’ve given all day too.

Sarah Williams

Yeah, I know. Look at that.

Mark Stiving

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

Sarah Williams

The easiest, I’m hard to find on LinkedIn, so I’m going to give out my email, Sarah, S-A-R-A-H at leadingculture.co.nz. Love to hear from you.

Mark Stiving

That was N-Z, she said, in case you don’t speak New Zealand.

Sarah Williams

Oh yeah, Kiwi. Yeah, sorry. N-Z.

Mark Stiving

To our listeners, thank you for your time. If you enjoyed this, would you please leave us a rating and a review? And finally, if you have any questions or comments about the podcast, or if your company wants to get paid more for the value you deliver, email me, mark at impactpricing.com. Now, go make an impact.

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