Lindsay Duran is the Chief Marketing Officer at Zilliant. Over the course of her career, she focused on uncovering inefficient and sub-optimal processes and actively worked to solve those challenges with creativity, whether it’s developing a new go-to-market methodology, revamping a marketing organization, or, in her current role, helping clients realize better financial results through artificial intelligence and sales rep enablement.
In this episode, Lindsay talks about what Zilliant does in terms of providing a pricing system that helps you how to price your products, more effectively manage your customer price agreements, and point your salespeople to the actions that are going to drive the most revenue and margin growth and systematically do that.
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Why you have to check out today’s podcast:
- Learn how Zilliant’s pricing system can calculate and measure price elasticity for the different segments to come up with price optimization for the goal you are trying to achieve for the said price
- Find out how to pinpoint the best selling price to charge given the complexity of pricing decision in every selling circumstance
- Find out the problems Zilliant can help you with to effectively and efficiently deal with pricing decisions that drive revenue growth
“Stop relying on spreadsheets. Spending your time manipulating data in spreadsheets and trying to execute price changes in spreadsheets is underselling the value of pricing professional.”
– Lindsay Duran
Topics Covered:
01:30 – What led Lindsay into pricing
02:00 – The mix of roles she held at Zilliant
02:46 – Thoughts about ‘product marketing and product management people
03:06 – The bias to over discount
04:06 – What does Zilliant do?
07:45 – Elaborating on segmentation and willingness to pay of customers
10:27 – Giving her thoughts on price elasticity
14:48 – What is the digital transformation of sales
18:36 – Why do we still need salespeople in the online sales setting
21:07 – Salespeople and price negotiations
24:24 – Helping customers’ handling of thresholds and rules
30:03 – The problems Zilliant solves
30:42 – Lindsay’s one piece of pricing advice that will greatly impact your business
Key Takeaways:
“What we do at Zilliant, as we help companies using software and using data, and Data Science, figure out what is the best price that they should charge in every selling circumstance. And then we help companies figure out how to manage all of the processes that go along with setting, updating, executing prices in the market.” – Lindsay Duran
“For those that like to argue that price elasticity can’t be measured, I would encourage everyone to raise their prices by 50, 100, 200% and see what happens to their volume. There is a point at which you are past the profit-maximizing price, and that your volume is going to drop off and go to zero if you are too far out of the market.” – Lindsay Duran
“Digital transformation is seeing it on two fronts. It’s the shift to e-commerce and the need to provide salespeople with more Data-Science-driven guidance, to help them be more effective at their job and ultimately meet customer expectations.” – Lindsay Duran
“It’s really up to the strategy of the company as to how they want to handle those thresholds and rules and we’re simply there to not tell them how to approach that but make that work systematically so that the outcome is what they’ve requested.” – Lindsay Duran
“As much as you can rely on data and technology to do some of that very heavy lift, often not value add, but critical steps. You can spend more of your time on the actual pricing strategy portion of it and figuring out the opportunities where you have the biggest areas of impact and where you need to focus your time that isn’t on all of that kind of manual data manipulation that so many people get mired in.” – Lindsay Duran
Connect with Lindsay Duran:
Connect with Mark 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.)
Lindsay Duran
Stop relying on spreadsheets. Spending your time manipulating data in spreadsheets and trying to execute price changes in spreadsheets is underselling the value of a pricing professional.
[Intro]
Mark Stiving
Welcome to Impact Pricing. The podcast where we discuss pricing, value, and the digital relationship between them. I’m Mark Stiving. Today, our guest is Lindsay Duran. And here are three things you want to learn about Lindsay before we start. She is the CMO at Zilliant. I cannot wait to ask her what Zilliant really does. She was a top-performing Sales Director there for three years. So, we’re going to learn more and more about how we sell. And then the most fascinating thing. Not only was she an intern for the Pittsburgh Steelers, she once sat next to Mean Joe Greene on an airplane. And he probably took the first seat, too. Welcome, Lindsay.
Lindsay Duran
Thanks so much for having me, Mark.
Mark Stiving
Was Mean Joe Greene that big that he spilled over into your seat?
Lindsay Duran
He wasn’t quite that big anymore, but he was probably one of the nicest people I’ve ever met.
Mark Stiving
Nice, nice. Those are always fascinating stories. Well, let’s start, how did you get into pricing? Do you consider yourself in pricing?
Lindsay Duran
You know, I do now. But I would say, Mark that that really wasn’t always the case. I had some experience setting prices back when I was in product marketing and product management. Gosh, more than a decade ago. But I’ve always been in the high-tech space really. And I found my way to Zilliant, almost by accident. And nine years later, I’m still here.
Mark Stiving
Did you start as product management or product marketing in Zilliant?
Lindsay Duran
I actually started in more of a broad marketing role doing everything from content marketing, to marketing, communications, and certainly product marketing very, very much became part of the mix there over the years.
Mark Stiving
Nice. I have to say, as a pricing person, I teach a lot of product marketing, product management people. And I think the key reason I love them and pricing is because they usually understand the value of the product to the buyer better than anyone else in the company with one possible exception.
Lindsay Duran
Absolutely. I think that’s really the key as it’s trying to be able to estimate what value a product has relative to the alternatives that are available in the market. For sure.
Mark Stiving
Yes. And let’s kind of tweak our way into the topic today. Because the one exception is, I think salespeople probably have a closer understanding of the market. But they also probably have incentives to price lower than we probably should. Is that a fair statement or not?
Lindsay Duran
You know, I certainly think that there is a bias towards making sure that you don’t lose a deal, a bit of a zero-sum game. What is the highest price that you can get away with while that’s still being acceptable to the customer? And so certainly there is a bias to over discount. And I think I can say that given that I am a former salesperson.
Mark Stiving
I was a former salesperson, too. There’s no doubt. And I’m not trying to pick salespeople, I dearly love them, they add so much value. In fact, I want to talk a little bit about sales. But first, I want to talk about Zilliant. Now, I have been involved with large pricing companies and parts of my career. And one of the things that have always seemed true to me is that nobody can really explain what you do. So as a CMO and an ex-salesperson, I would expect you have the perfect answer. What does Zilliant do?
Lindsay Duran
If I could just start with an analogy because I think that examples are probably the easiest way to explain things. Let’s imagine for a moment that you are selling office supplies and that one of the items that you sell are boxes of pens. If I am selling you office supplies, Mark, and let’s say you have five people at your company, you would expect to pay more or less per pen than let’s say a company the size of Dell, for example, right? And your answer should be that you would most likely expect to pay more per pen. Then I might ask you why you might expect to pay more per pen. Some of that might be the fact that you are using and ordering far less pens, you might make smaller order-size purchases, you spend less with me overall than a company like Dell does, it might have to do with your location. And where you’re geographically located, it might also have to do with the brand of pens that you buy, maybe you really like premium pens, and Dell is looking for the cheapest lowest cost pen that they could possibly buy. What I just described there is why there is such a thing as price differentiation between customer segments in a market. What that lends itself to and all of those characteristics or attributes that I gave should seem rational to most people as they think about it. What that lends itself to is, how do I determine what is the right price to charge you for a box of pens versus the right price to charge Dell for a box of pens? And how does that price need to change over time based on any given set of market factors or your behavior changes, or Dell’s behavior changes? Pinpointing what is the best price to charge is really, really difficult, especially for companies that have a lot of products that they sell or sell to a large customer base, or really just have any level of complexity in the pricing decision. What we do at Zilliant, as we help companies using software and using data and Data Science, figure out what is the best price that they should charge in every selling circumstance. And then we help companies figure out how to manage all of the processes that go along with setting, updating, executing prices in the market.
Mark Stiving
Okay, Lindsay, I have to say that that was a brilliant answer. I have almost always when someone gives an answer on my podcast, I usually simplify it instead of making it more complex. And yours, I’m going to actually make it more complex. What you just said, and I’m going to say this in words that I would normally teach, you just said different customers have different willingness to pay. Companies that do their jobs well have to understand how to calculate that willingness to pay. And we call this price segmentation. And if you’ve got enough data, then you have the ability to do this statistically, scientifically to say, look, this is who’s willing to pay what and here’s a new customer, they fit in the segment, here’s what we should charge them.
Lindsay Duran
Yeah, I think you absolutely hit on part of it. And that’s really the segmentation piece of it. I would actually take that. I’ll say two steps further, and make things slightly more complicated for a moment now that I’ve given my simple answer. You mentioned willingness to pay. Certainly, that can be inferred from a segmentation structure, which segments look more or less sensitive, looking at the skewness of the distribution of prices within the segment, to go back to statistics here for a moment. But one of the things that are unique to Zilliant, that we’ve been doing for many, many years now a lot since longer than I’ve been with the company, is we are able to in a B2B context using only when only data if that’s the only data available, but certainly that has been the case for many of our customers for many years, we’re able to calculate to measure a price elasticity value for every one of those segments, so that we are able to then compute the revenue-maximizing and the profit-maximizing price for every single micro-segment of the business, even take that all the way down to a customer-specific level. And that’s really key when you think about price optimization, because the term optimization is really, from a mathematical sense, a goal-seeking proposition. What am I trying to achieve with my price? Do I want to maximize my profitability? Do I want to maximize my revenue or share? Or do I want to be somewhere in between those two numbers for any given segment of the business? And how do I get there using Data Science and software because that is for a lot of companies quite a lot of data to compute and churn through to determine those optimal price points.
Mark Stiving
Yeah, I think in this world of big data, you really do need data scientists and big systems and people that understand what they’re doing. It’s absolutely challenging. Now I want to push back on something just a little bit. And this concept of price elasticity. I personally am not a huge fan of it. But I want to give you a chance to convince me that I should be thinking differently. The reason I’m not a fan is because I think price elasticity makes a lot of sense for industries, or even for products where there’s no competition. But if you ran a study and watch me lower my price by 10%, and I gained a bunch of sales that didn’t talk about how my competitor might react.
Lindsay Duran
But I hear this question a lot, Mark. So, a couple of things on that. One, when we talk about price elasticity, in a B2B context, we aren’t necessarily meaning it in the same way that you might look at it in a B2C context. Let me go back to my office supplies example, for a moment. Just because I lower my toner price, doesn’t automatically mean that you as a customer need to buy more toner, you still have a finite amount of toner needs. You are right, in that if I lower my price on toner, and you ultimately buy more toner from me then what actually happened in the market is that you shifted your buying behavior from my competitor over to me. That’s absolutely true. When we look at when only data to calculate price elasticity, we are actually inferring competitive behavior in that because you would, I think, agree with me that most sales happen at least under some semblance of a competitive circumstance. Unless you are a pure monopoly, and there’s no other choice. That competitive response, and your historical transaction data of where you’ve actually won in the past, can give at least an inferred indication of where the competition is. It’s not perfect information, but it’s better than no information. Now, for those that like to argue that price elasticity simply doesn’t exist in B2B or can’t be measured, I would encourage everyone to raise their prices by 50%, 100%, 200% and see what happens to their volume. There is a point at which you are past the profit-maximizing price, and that your volume is going to drop off and go to zero if you are too far out of market. It can be measured, it is measured in our solution. I think it’s one of the things that has come in handy and has been a tremendous value to customers, especially during the course of the past year in this pandemic, where there’s been a tendency of sales to want to lower prices because they’re seeing a drop off in demand. And we’ve actually supplied our customers with elasticity values for every segment of their business so that they can make a data-driven argument as to, hey, it’s not the fact that our prices are too high, it’s just that demand has dried up because look at the elasticity in this particular segment for this particular customer buying this particular product.
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Mark Stiving
Okay, I’m going to go away and think about that, Lindsay. I’m not sure I 100% agree. But it was a reasonable conversation. How’s that?
Lindsay Duran
That’s fair.
Mark Stiving
But we wanted to talk today about what we’re going to talk about is the digital transformation of sales. And I’ll start off with the question I actually asked you in the pre-call, but I want everyone else to have this too. And that is what does that mean, the digital transformation of sales?
Lindsay Duran
I managed to pack a lot of buzzwords in that phrase, let me unpack that a bit for you. I think about that in a couple of ways, Mark. It’s really about what this next generation of sales is going to look like. And frankly, that transformation has already started to happen and was really accelerated over the course of the past year. First, e-commerce has been something that we’ve been talking about for years, we saw the disruption in the retail markets for that. In B2B, it’s just started to pick up steam in the past few years, but the past year in particular, has really accelerated that trend. There are a couple of reasons for that. The pandemic being one, but you also have an entirely new generation of buyers. We’re just used to self-service channels, if you and I want to go buy a piece of furniture for our house or buy a clothing item, we don’t feel the need to speak to a sales rep, we just go online and order it, we might venture into a store. But we don’t require a salesperson to explain that piece of furniture to us. The expectation is that I should be able to order what I want to order without necessarily talking to a human. And that is very disruptive for a lot of B2B companies where they have been solely reliant on outside sales reps, driving around to different customer locations, and asking them what they need to order and really building that relationship sale. Part of that relationship sale specifically has to do with pricing in that salespeople used to be a filter for the prices that a company set. Pricing may not have been granular enough to present directly to a customer. And as a result, salespeople would then modify the price before they put it in front of a customer. Certainly, that can no longer be the case, when you have an e-commerce channel. You have this shift over to e-com. But then the expectation is that a salesperson when they do interact with a customer is that they’re adding tremendous value. And if you are managing 70 accounts, and you have a product portfolio of 200,000 – 300,000 items, it can be really difficult to have a needs-based conversation with every single customer that you encounter, yet, that is what they expect. The days of relying on salespeople to use gut instinct and intuition and knowledge to go have conversations with customers are really, really over. Salespeople need guidance that is informed by data, by data science by artificial intelligence, to help them understand which customer conversations they should prioritize, which customers they should go talk to, which products they should talk to those customers about that are going to have the highest likelihood of actually converting to a sale or growing revenue with their customer base and making their numbers. I really see it on two fronts to boil it down. It’s the shift to e-commerce and the need to provide salespeople with more Data-Science-driven guidance, to help them be more effective at their job and ultimately meet customer expectations.
Mark Stiving
When you started talking about the guidance to the salespeople, what was going through my mind was, okay, so why do we even have salespeople? So, you answer that one first.
Lindsay Duran
Sure. There are many instances where technical product information or trying to discern what type of product a customer needs, it requires a human for that. If you think about, let’s say an industrial manufacturer, that’s selling a complex configured product to an oil and gas company. It’s much more likely that a salesperson is going to add some technical value there in determining what the customer’s needs are and then configuring the right solution or let me take an industry where they’re not selling complicated products and give another example if you think about foodservice distribution. The motion today for foodservice distributors when they go and visit a customer is that they asked them what they need to order. They stop by, they go back into the kitchen, they look around, they see a competitor’s paper towels instead of their own and they say hey, I can give you a better price on those than what you’re getting today. And what else can I order for you? That behavior is shifting to online channels. What is then the role of the salesperson? The role of the salesperson, one, is to go get new business and visit customers. The second role of the salesperson is to add value to that particular restaurant, so that might be helping them optimize their menu, looking at other value-added services that that distributor might offer such that the buying decision for the restaurant doesn’t just come down to what prices are you charging me but it comes down to what other value? Are you adding in our conversations beyond? Just what can I order for you today?
Mark Stiving
Yeah, I think this next question fits in our conversation. But I’m often helping startup companies, entrepreneurs, and they’re putting together their distribution channels. And I have a rule of thumb that I use in my head that says, if a product or a sales opportunity is not at least $10,000, you don’t want to direct a salesperson. Now, A, do you agree with that? And then B, how does that fit in this world of digitalization of sales? Because it almost feels like that 10,000 number is going to go higher?
Lindsay Duran
I’m so glad you asked that question because it’s going to let me talk about something that I think is a really interesting concept and capability that we’re doing with a handful of our customers. But let me answer your explicit question. First. I think it depends on the industry. And it depends on the company. Certainly, having a threshold in which you are bifurcating your sales force by direct outside sellers, for very large accounts, large deals, perhaps a pool of inside sales reps who are handling that mid-tier of accounts, perhaps incentivizing smaller customers to either call into a pool of customer service reps to place an order or only order through e-commerce. Maybe you can send them through different pricing for doing that. I think that companies are rethinking that a direct seller might need to be involved in every single order, that there are ways to create more efficient, more cost-effective sales channels, and let your salespeople handle the larger ones. But one thing that doesn’t get talked about as much in that context is how do you handle price negotiations. Businesses are used to the ability to go back and negotiate the price. And one of the things that we do with our customers, and I’ll give the example of an electrical products manufacturer, we actually enable them and they’re selling through distribution. We actually enable them through their distributor self-service portal, to let the distributor negotiate the price with the machine and the machine being Zilliant. On the backend. A quote is generated instantaneously for whatever the distributor has put on the bill of materials and that those prices are produced by Zilliant, that are highly contextual and relevant for that deal. If the distributor says, well, in order for me to win this end-customer deal for this commercial building that I’m bidding on, I actually need to be at this other price point, we can automate the counter offer that goes back to that distributor. What you’re doing is you are intelligently automating negotiation with a predefined threshold and set of rules or constraints that you are comfortable with. And if it exceeds the request, and you can’t get the deal through that automated activity, then perhaps it goes to a deal desk team or to a sales rep. But the net effect is that you have taken that negotiation, and kept it within the bounds that you’re comfortable with from a profitability standpoint and automated that and removed the human element until it gets to a level or a deal size that you prefer to have a human take a look at it.
Mark Stiving
Yeah, so then that makes sense to me with one exception, and I’m sure you guys have thought of this and fixed it as well. If I were a distributor, I would always be negotiating for the lowest price I got last time or a little bit lower than the lowest price I got last time.
Lindsay Duran
Sure. And it’s really up to the strategy of the company. This isn’t applicable in all industries. But it’s really up to the strategy of the company as to how they want to handle those thresholds and rules and we’re simply there to not tell them how to approach that but make that work systematically so that the outcome is what they’ve requested.
Mark Stiving
Yep, got it. And you might have already had the machine if you don’t, here’s a product enhancement suggestion, pray random delay time for when you respond, thirty minutes to one hour?
Lindsay Duran
I will share that feedback.
Mark Stiving
Well, at least it looks like it’s not a machine responding. That’s the only reason I say that.
Lindsay Duran
Absolutely.
Mark Stiving
When I asked about the why salespeople or the digitalization of sales, the second one that you pointed out was guidance for the salespeople. And I dearly love that. I mean, I think that’s brilliant. The thing that’s obvious to me is cross-selling. But is there something more than just cross-selling that we’d be thinking about here?
Lindsay Duran
Absolutely. We’ve had a solution in the market for years that does just what you described. But we’ve recently added a number of other what I’ll call customer action types to that, let me give you a few examples. One that we’ve been doing for quite a while is what we refer to as recovery. How do you pinpoint when a customer is beginning to drop purchase volume on a given item or category and it’s to an extent that it doesn’t just look like normal buying behavior, but it actually looks like they started buying from a competitor. You want to flag that early before the competitor gains any more of a foothold with your customer. That’s one example. Another example is when you’ve completely lost the business entirely with a customer, and what were those products that you lost? Is it time to go and try to win back that business, you may also want to prompt salespeople to substitute certain products with a customer? For example, let’s say you’re a distributor, and you have your own private label brands, but you also sell a number of national brands, perhaps your private label brands are a lower price point for the customer, but a higher margin for you. And you would prefer to recommend that your salespeople sell your private label as opposed to the national brand when they go to create a quote or have a conversation with the customer. You also have an example of inventory. Many companies are sitting on excess inventory and trying to figure out who’s the best customer to buy that inventory. And with what offer is often an action that is an app that we are asking salespeople to do, but not really giving them any guidance on who they should talk to about that. So, how do you pinpoint the customers most likely to buy it? And then really, on the pricing front, Mark, I’d say that one of the challenges that companies face is that they often give discounted pricing based on some future volume commitment to a customer. It is very common for customers to not hit that volume commitment. And then you are A, not getting the volume you expected, and B, it’s at a lower margin than you otherwise would have charged. And it’s very hard to keep on top of that and spot that. One of the things that we’re able to do is a flag for salespeople, when customers are not on track to meet those volume commitments so that they can go have a conversation with the customer, course correct. Maybe make adjustments in the pricing, if that’s warranted or allowed, and so forth. A number of different things that we can go do as well as actually create custom actions. And I’ll give you an e-commerce example to really tie the whole digitization of the sales concept together here. But perhaps you have a number of customers who have requested a quote on your website or added things to their carts, and then abandoned that. It’s challenging then to get salespeople to follow up on those items without having a systematic way of doing it. We can enable companies to simply upload that information directly into our system and push that out as actionable guidance for salespeople to go follow up on those on quotes that didn’t convert. A lot of opportunities to really guide salespeople to the best actions that are often intended by kind of that corporate strategy layer of we need to go execute on X, Y, and Z. But salespeople don’t really have a meaningful way to do that, given all of their other responsibilities. Give them that customer-specific action to go.
Mark Stiving
Okay, Lindsay, I have to say that that was brilliant. As I’m sitting here listening to you talk, here’s what I’m thinking, ‘Oh, that’s obvious. Oh, that’s obvious. Oh, that’s obvious.’ But I never thought of it before you said it. It’s that obvious. I just thought what you said was totally brilliant. And I could see how the answer to the question, what does Zilliant do? The answer could be, here are the problems of yours we can solve.
Lindsay Duran
Yeah, I think a very easy way to think about that is how should I price my products? How do I more effectively manage my customer price agreements? And how do I point my salespeople to the actions that are going to drive the most revenue and margin growth? Right, and do that in a systematic way?
Mark Stiving
Yep. And every one of those decisions will drive profit to the company.
Lindsay Duran
Absolutely.
Mark Stiving
Absolutely brilliant. Okay, we are way longer than normal. You are brilliant. Thank you so much, Lindsay. But I do have to ask the final question, what’s one piece of pricing advice you would give our listeners that you think could have a big impact on their business?
Lindsay Duran
Stop relying on spreadsheets.
Mark Stiving
Okay, you got to go a little bit farther.
Lindsay Duran
Sure, Mark, I think that spending your time manipulating data in spreadsheets and trying to execute price changes in spreadsheets, is underselling the value of pricing professional. And as much as you can rely on data and technology to do some of that very heavy lift, often not value add, but critical steps. You can spend more of your time on the actual pricing strategy portion of it and figuring out the opportunities where you have the biggest areas of impact and where you need to focus your time that isn’t on all of that kind of manual data manipulation that so many people get mired in.
Mark Stiving
Yep, absolutely. I agree with that completely. Lindsay, thank you so much for your time today. If anybody wants to contact you, how can they do that?
Lindsay Duran
Sure, you can certainly find me on LinkedIn. I’d encourage everyone to check out the Zilliant podcast, which is called B2B reimagined, which you can find on our website at zilliant.com or you can email me directly at [email protected].
Mark Stiving
Perfect, thank you so much. Episode Number 117 is all done. Do us a huge favor, tell a friend, leave us a review. I would be hugely grateful if you would do that. And finally, if you have any questions or comments about this podcast or pricing in general, feel free to email me at [email protected]. Now, go make an impact!
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Tags: Accelerate Your Subscription Business, ask a pricing expert, pricing metrics, pricing strategy
