Impact Pricing Podcast

Ep122: Value Pricing and Value Selling with Jim Broderick

 

Jim Broderick is a seasoned Pricing Professional with 20+ years’ experience across Marketing, Product Management/Product Development, Finance, Operations, Data Analysis, and Sales; he has a unique ability to view Pricing from all dimensions. He also created and led the Pricing Function at a $500M Manufacturer/Distributor and a $100M Professional Services Company. He works cross-functionally to achieve support in building the pricing function, pricing initiatives, and overall strategy at the same time he is responsible for price uplift in excess of $50M over a 15-year career. 

In this episode, Jim shares how the different roles he tackled helped him work his way up to being a Pricing executive. How he greatly impacted his business in just over three years is one area he details the process in achieving it. He talks about how value pricing and value selling are at the heart of providing solutions to customers and impacting businesses. 

Why you have to check out today’s podcast:

  • Learn how you can institute a value-selling process with your salespeople so you know your customer’s pain points and find solutions to their problems 
  • Find out how to see price as a proactive lever rather than a reactive pain point 
  • Discover the pricing skills and action steps you ought to have and implement to massively impact a business 

         

You have to talk to your customers. You have to be out from behind the desk, work with the sales people, figure out what makes them tick. How can they drink the Kool Aid that you are pouring in? Because if you can’t get to that level, again, all the analysis in the world, if you can’t get it in front of the salespeople, in front of the customers, it’s a waste of time.

Jim Broderick

      

Topics Covered:

01:20 – From being a carpenter to a VP of Pricing 

02:39 – The affordability of school back then compared to this time 

03:30 – How he started consulting with small businesses 

04:12 – The role he started out in and how he worked his way up to an executive-level Pricing position 

06:03 – How does Excel fare from all the other BI tools around today 

06:55 – The same but different way of writing Math in Tableau or Excel 

08:13 – How changing jobs is like learning a new language and how he uses that idea to solve problems 

09:58 – More than value-based pricing, it’s value-based selling 

11:05 – Seeing value-based pricing years before and how it was achievable 

13:12 – Value drivers are not internal – they have to be external from customers 

15:15 – What he does around value drivers in his own company 

15:58 – Instituting a value-based pricing 

16:51 – How he made a $125 million impact 

20:02 – Instances where you leave money on the table by not communicating your value 

21:09 – Thoughts on compensating salespeople for price increase 

22:53 – Impacting business for over just three years 

     

Key Takeaways: 

“I like to say when I’m talking to people about Pricing, I’m in the middle of the Rubik’s Cube. Everything else is rolling around me. And I’m in the middle of the Rubik’s Cube keeping it all together and making sure that the colors are lining up.” – Jim Broderick 

“I think I had the benefit of coming from a Sales background. Because you know, part of what we do is we have to sell our story. We have to sell to the business, why is it important to do things the way we do.” – Jim Broderick 

“If you want to advance to the level of director, or above in the Pricing world, you have to put yourself in front of the business, you have to.” – Jim Broderick 

“I have a saying that I repeat all the time to anyone who will listen to me, we can create the most Math-based, value-based, algorithmic-based price you can come up with, if Sales can’t translate that and sell it, it’s a waste of time.” – Jim Broderick 

“Identifying value drivers, in a business, quantifying the value drivers, and then training your sales people to change the conversation from price to the value drivers that are important to that customer.” – Jim Broderick 

“Value drivers cannot be internal; value drivers have to be external from the customer.” – Jim Broderick 

“I think that the most important thing [impacting business] is that you have an executive team that sees price as a proactive lever and not a reactive pain point.” – Jim Broderick 

      

People/Resources Mentioned: 

       

Connect with Jim Broderick: 

       

Connect with Mark Stiving:   

                 

Full Interview Transcript

(Note: This transcript was created with an AI transcription service. Please forgive any transcription or grammatical errors. We probably sounded better in real life.)

Jim Broderick   

You have to talk to your customers. You have to be out from behind the desk, work with the salespeople, figure out what makes them tick. How can they drink the Kool-Aid that you are pouring in? Because if you can’t get to that level, again, all the analysis in the world, if you can’t get it in front of the salespeople, in front of the customers, it‘s a waste of time. 

[Intro] 

Mark Stiving   

Welcome to Impact Pricing, the podcast where we discuss Pricing, value, and the impactful relationship between them. I’m Mark Stiving. Today, our guest is Jim Broderick. And here are three things you want to know about Jim before we start; he started his career as a carpenter. Wow! And he worked his way up to be a VP of Pricing at United Site Services. And I have to tell you, he’s here because John Jennings told me, he made a $125 million impact on a billion-dollar company in three years. And everybody should want to know how he did that. And by the way, he and I both love mountain biking. Welcome, Jim.  

Jim Broderick  

Thanks, Mark.  

Mark Stiving   

Okay, so how did you go from being a carpenter to being in Pricing? 

Jim Broderick   

So, I went through high school, struggled to get into college, believe it or not, and historically flunked Math. Just, every time I tell that story, people, yes, do the same thing you did. But I realized that I liked working with my hands. And I liked being able to build things. And so, I gravitated towards carpentry and ended up paying for college framing houses and stuck around with it for a little while. And I looked around at the people I was working with. And they were 40. And they looked like they were 60. And I said maybe this isn’t for me long-term. So, I ended up with a sales job working at a building materials company. And that segued into me working on a basically a ‘desk’. 

Mark Stiving   

I have to say one of the things I love about your story there, and it has nothing to do with Pricing, is that I think people who pay for their own college value their education way more than, again, I’ll confess my dad paid for my college. And at the time, I didn’t think it was that cool or important, just like I had to keep going to school. So, in a lot of ways, I envy you. I know it was much harder but from an attitude or growth perspective. Well, I think that was awesome. 

Jim Broderick   

So, I’ll tell you, Mark, back in the middle ages, when I went to school, it was definitely more affordable than it is today. So, I was able to work a couple of jobs and put myself through school versus, you know, my kids today; there’s no way my kids worked their tails off two or three jobs in the summertime; there was no way they could work hard enough to pay for their college. So, it was a different world altogether. I valued my education. Yes, I valued the four years I spent in college. As much as the educational process, I was much more on the EQ than I was on the IQ side of the fence.  

Mark Stiving   

Yeah, I think we’re going to get to that point in a few minutes. But I want to start, you’ve been in both consulting and in the industry side. First off, is that true because you’ve got this look on your face like maybe you weren’t in consulting?  

Jim Broderick   

When you look at my LinkedIn page, I spent about just shy of a year working for myself consulting with small businesses. That was more, it was a great opportunity for me to step back and figure out what I wanted, but it was more a job loss scenario than it was anything else. 

Mark Stiving   

Got it. Okay, and so then tell me, why do you stay in Pricing? Right? I love the fact that you got there from a ‘desk’. So, I don’t know if there’s a more beginner job than being on a ‘desk’. And there’s nothing wrong with that at all. And yet, you said I’m going to stay in Pricing, and you’ve worked your way up to an executive-level pricing position. 

Jim Broderick   

So, I started my career in sales; I was a sales and marketing guy. And the whole time I was in it, I wanted to be a product manager, not a pricing person. And that just didn’t transpire. But what I found as I was doing it was I took to Excel, right? And I know that we all talk about how we want to get out of Excel and the whole nine yards. I took to Excel very well. And to me, there was a definite correlation between building houses and building models in Excel. Right, and you’re putting your hands on stuff, coming, you can see at the end of the day work, right? And so that, to me, that was a good transition for the way my brain worked. But the other thing, Mark, that I find more than any other role in my career brought me to a Finance department that brought me to product to product management all in a Pricing role. No other discipline, maybe other than IT, has you working in the middle of a company. I like to say when I’m talking to people about Pricing, I’m in the middle of the Rubik’s Cube. Everything else is rolling around me. And I’m in the middle of the Rubik’s Cube, keeping it all together and making sure that the colors are lining up. 

Mark Stiving   

Yeah, I think that’s absolutely right. I want to go back to the Excel comment for a second because it’s fun, I haven’t perfected it and so let me just test it on you. And you can say, you know, modify it. I think all these companies have really nice BI systems now with tons and tons of data. And yet, if you really want to do something new, explore, try to figure out what is the data really telling us? When you put it in Excel and start playing in Excel and you master Excel, you start to truly understand what’s going on in your data. Does that make sense to you? Or would you say no, all the BI tools can do that today? 

Jim Broderick   

So, I’d say that there’s probably a combination of both. The truth is somewhere in the middle; my company is moving to Tableau. One of the things I never fully understood is why Power BI, Tableau, Spotfire, why do they use a different formulaic language when everybody knows Excel, right? Everybody knows Excel, and yet, they’re forcing us to use, to learn a new language, which we do. And I have people on my team, and they’re younger, so they can learn the new languages. But at the end of the day, it just feels so much easier to dump it into Excel because Excel grows out of my fingertips, the language of Excel grows out of my fingertips. 

Mark Stiving  

I wonder if that’s because you and I are old. And we grew up on Excel and not on Tableau or Power BI? Correct. 

Jim Broderick   

Correct. I think that that’s a piece of it. But I also think like, because I talked to other people in my company, and it’s a thought process that’s universal because they all use different formulaic languages. And at the end of the day, whether you’re doing optimization in Tableau or Excel, it’s the same basic Math, but you have to, you know, learn different ways of writing that Math. 

Mark Stiving   

Yeah, yeah. Good. Okay, so I was playing on your LinkedIn page. And while I was on your LinkedIn page, you got a recommendation from a gentleman named Krishna; I won’t give you his last name for now. But I want to read the second paragraph of what he wrote. Because I find this paragraph so powerful, and after I read it, I’ll comment on it. He wrote, what impressed me most was his ability to build trusting relationship and gain credibility with a diverse set of stakeholders in the business community, and how quickly he became a trusted adviser. Okay, I think this is a skill that every Pricing person needs; very few have. Did you plan that out? Was that just your nature? Was it a strategy? How did you get to that? 

Jim Broderick   

So, what I’ll say is this, I’ve been fortunate in my career to have worked at some really tremendous companies, and within those companies, work for some really tremendous people. But my first job transition happened after I was at my first company for 17 years. Right? It was traumatic. And one of the things I learned was that we had a German High School exchange student living with me when I was making this transition. And she was becoming fluent in English. And one of the things I realized was that changing jobs is like learning a new language. I was constantly translating the problems I saw in front of me back to my first company; how did I solve them and translate them back. And what I found was that as I’ve moved from company to company, the process of learning a language becomes easier. And the sooner you can learn the inner workings of their company, the sooner you can work across a broad group of people to move them in the right direction. That’s part of it. But I think part of it I think, people in Pricing come from a number of different backgrounds. I think I had the benefit of coming from a Sales background. Because you know, part of what we do is we have to sell our story. We have to sell to the business, why it’s important to do things the way we do. 

Mark Stiving   

And so, explain, do you think the skill is important for other Pricing people? And I say that because I can imagine there are a ton of pricing people out there right now thinking, oh my god, I love Excel. I love Tableau. I love doing the analytics, don’t make me talk to someone in Sales. 

Jim Broderick   

So, I think, Mark, if you want to advance to the level of director or above in the Pricing world, you have to put yourself in front of the business, you have to, right? I have a saying that I repeat all the time to anyone who will listen to me; we can create the most Math-based, value-based, algorithmic-based price you can come up with; if Sales can’t translate that and sell it, it’s a waste of time. Right, sales have to take what we do, embrace it, and sell it to the customer. Right? Value-based Pricing, in my mind, there’s no such thing as value-based Pricing. In my mind, we are a component of value-based selling. And so, you know, we have to put ourselves in front of salespeople to get them to buy what we’re selling. 

Mark Stiving   

And I often in a very similar vein, I say, if sales is asking for discounts too big too often, it’s because you haven’t given them the tools, knowledge and confidence that they can win deals at the prices you think they should limit. 

Jim Broderick   

Right? So, it’s, you know, value-base. I’ve been doing this for coming up on 20 years now, my first PPS conference, I heard, you know, people talking about value-based Pricing. It was years before I saw what value-based Pricing was and how you achieve it. Everybody talked about it. There wasn’t until the likes of Stefan was out, I started doing research into it. And you know, like the work that leverage point put together into that tool, you started to kind of put a foundation to value-based Pricing. But I still say it’s as much in the sales world as it is ours. 

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Mark Stiving   

I can imagine every audience member right now saying, okay, what is value-based Pricing? Right? What’s different about it between today and 20 years ago? 

Jim Broderick   

Are you asking me that question? 

Mark Stiving   

I am asking you that question. So, they want to know what you learned? What do you think is different? 

Jim Broderick   

So, identifying value drivers in a business, quantifying those value drivers, and then training your salespeople to change the conversation from price to the value drivers that are important to that customer. And value drivers cannot be internal; value drivers have to be external from the customer. So, you can’t; a company can’t say well, this is what a customer values. Right? Customers have to tell you what’s important to them. And then it’s our job to quantify that those value drivers into how do we solve those pain points within our company better than the next best alternative? Yeah, in some cases, you may be the low-cost provider. And that’s what your value drivers, hey, you know, I’m a good enough. And I’m the lowest price out there, right? And that may be it. In my mind, that’s kind of the big advances that I’ve seen in the last, say, seven years, five to seven years versus what was out there before. There was some economic value estimating and some stuff that was done early on, but I didn’t see any real good teeth in that until, you know, some of the leverage point stuff since that time. 

Mark Stiving   

Nice. I love your answer. I have to say this morning, the comment you made that said value drivers are different for each customer. And just this morning, I came up with an example that I want to share with you real quick. And that is a box of tissues, right? I love Puffs tissues, and I tell my wife all the time you got to buy Puff tissues. And if you were to guess why I love puffs tissues, you’ll never ever figure it out. But I like Puffs tissues because the box is short enough to fit in my desk drawer. Right? And so that’s my value drive. And if you don’t ask me the question, you’re never going to know the answer to that. 

Jim Broderick   

Right. And that’s a great example. Right. That’s a great example; in my current business, we serve, you know, probably half a dozen key segments. And, you know, you could ask one of those customers and in that segment what’s important to them. And you can ask another customer in the same segment what’s important to them? And you may get two different answers. I went through this process that I mount. And we started by asking the salespeople what was important to the customers. Right. And then we went out and asked the customers, what was important to the customers, and it was two different things. 

Mark Stiving   

Isn’t that fascinating and sad at the same time? 

Jim Broderick   

Salespeople, I know, because I was a salesperson, I couldn’t wait to show up and throw up, right to show up and tell this customer all the reasons why they need to buy my product and why my product was the best in the world. Back then, nobody told me, you got two ears and one mouth, dummy, listen twice as much as you talk. And so, I never got that value-based sound training. And that’s what a lot of salespeople are at is in the VP of Sales we have here as instituting a value-selling process. He says that all the time, don’t show up and throw up, talk to the customer, ask probing questions, find out what’s important to them, what are their pain points? And how can you solve their problems? 

Mark Stiving   

Nice. Okay, I haven’t asked this question directly yet. So, it’s time; how did you make a $125 million impact? 

Jim Broderick   

So, I’d love to say it was me. But there’s a whole team that is involved there. And I think that the most important thing is that you have an executive team that sees price as a proactive lever and not a reactive pain point, right? And so, we’ve all worked in companies where the pricing guy is trying to control discount, and he’s pushing the ball up the hill, and the salespeople saying, well, price is too high, and we have to discount to get the sale, and the sales leadership and the CEO is on the same bucket. I love the analogy that Reed Holden made years ago when he talked about the White Horse Syndrome, you know, where the VP of Sales, you know, swoops in and drops the price and saves the customer and that I’ve worked in companies that are like that. You don’t get traction from a let you know, pricing leverage standpoint. Yeah, that’s a reactive pricing world. I work in a company where the CEO feels like we have tremendous pricing power, right, offer a service, and have tremendous pricing power. It was my job to go get it. And so, there was a whole lot of you know, I’ve been out in front of salespeople, probably four times now. I’m traveling next week, for the first time, for a pricing summit for one of our regions where we’re going to spend eight hours talking about price. That’s a daunting task, by the way, putting together content for eight hours that keeps people engaged, right? But I’ve been in front of the salespeople probably three times out of my three years. I’m constantly on the phones with them. So, my C-suite people believe we have tremendous pricing power, they said, go get it. Now it’s my job to implement the processes that we need to do, so there’s a combination of annual price increases, there’s a combination of contract management, which didn’t exist before I got here. Part of it is selling myself to the salespeople, so they believe, you know, the process that we’re engaging, that you know, we engage in peer-based pricing. And it’s my job to make sure that the sale is simple enough that that black box that we have that’s, I like to say it’s more of an opaque box is simple enough for them to understand. That when I give them a price, it’s the right price for the right customer at the right time, and that they don’t have to go back to their notebook or the top of their head to come up with a price on their own. So, we’ve been doing that now for over three years. And we’ve had really good success, but it’s like I said, and we’re a team of three right now. I have two price analysts that work for me, actually. I now have a price manager and a senior price analyst. But we’ve had tremendous success over the last few years. It’s been a great journey. 

Mark Stiving   

I can imagine anytime a new pricing person walks into a company, they’re going to find lots of places where we’re leaving money on the table, where we’re not doing a good enough job at creating value, communicating our value, capturing the value. Can you give us a couple of examples of those that you dealt with just so that people can know what types of things they would be looking for? 

Jim Broderick   

I don’t even think that we’ve even started down the value road yet in my company, right. The three years that we generated that was all blocking and tackling. Right. So, one of the first places I started, we have an annual price increase process. With a service company, we have a general price increase yearly, the salespeople had full autonomy to exclude customers from that increase. And so, the first year I was here, we had maybe a 30% stick rate. Right, the salespeople basically exclude 70% of the customer base. Well, 70% of the available revenue. 

Mark Stiving   

Right. And that’s tiny. By the way. 30% is a low number.  

Jim Broderick  

It was way low. Right. So, we’re now, you know, somewhere around an 83, 84% stick rate. Right. So that means that for every dollar of increase that was available, we’re only getting 30 cents before? 

Mark Stiving   

Did you compensate the salespeople for it? 

Jim Broderick   

Nope, not yet. Not yet. So, compensating salespeople based on price or price increase or something to that effect. I know that it’s out there. I know companies do it. If anyone who’s listening to your podcast has ideas and want to reach out to me, please, that’s on the roadmap of things that we’re going to check off. But I think that you know if you think of it, I think of this as like a pyramid; we’re still in that first to the second layer in the pricing journey. Value-based pricing is at the very tip. To me, sales compensation is somewhere in the middle. So, we’re slowly taken away from that process. But that stick rate piece was huge, right? As we cycled through it, the salespeople, then what we had to do, had to train them to have that conversation with their customers. Right? If it was easy for them to exclude them, we had to train them on having that conversation, why it was important. And we even went as far as you know, our technicians are basically truck drivers three years ago, when I started the Amazon side of paying the truck drivers $100,000 a year. We use that in our, you know, it’s not all about site services and porta potties. Because at the end of the day, that’s what I do. It’s about delivery. It’s about truck driving; it’s about waste disposal. So, changing the conversation, you know, in training them was really important. 

Mark Stiving   

Yeah, without a doubt. What I love about the story you just told, though, is, you’ve made a $125 million impact out of about a billion dollars in revenue. So that says you’ve done a 12 and a half percent increase in profitability. And you’re only at the bottom layers of the pyramid. 

Jim Broderick   

Yeah. I love that. So that yeah. So that 125 occurred over three years. I think the first year was probably somewhere about 28. Last year was probably somewhere around 50 or 60. Right, somewhere in there. But the beauty of the price increase is that 28 that I started with. It’s not like sales, where you start from zero again, and you’re moving forward, which now becomes my foundation and I’m building on top of that, right? And so that 125 is there. You know, we’re building on top of that, and yeah, I work for a VP of Finance in my current role. And he likes to say it’s dripping from the ceilings, you know, just need the right buckets to be able to grab it. 

Mark Stiving   

Yeah, I think that is so true. Jim, this has just been fascinating, but we’re running out of time. The last question, what’s one piece of pricing advice you would give our listeners that you think would greatly impact their business? 

Jim Broderick   

If you haven’t figured out, Mark, I’m a sales guy at heart, right? And I talk about sales enablement, and sales training a lot. One of the things you said earlier to me was, you know, that guy, or that lady in the spreadsheet, in the Tableau workbook, who doesn’t want to talk to salespeople? I’d say you can take it one step further and get in front of customers because we are all customers who have to pay the price for something at the end of the day. You have to talk to your customers; you have to be out from behind the desk, work with the salespeople, figure out what makes them tick. How can they drink the Kool-Aid that you’re pouring in? Because if you can’t get to that level, again, all the analysis in the world, that’s not the last mile that you see in the delivery world, right? That’s the last mile that Amazon got really good at, right? You can get it to that point but, if you can’t get it in front of the salespeople, in front of customers, it’s a waste of time. Truly, I believe that. At my core, I believe that. 

Mark Stiving   

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

Jim Broderick   

So, I’m pretty open on LinkedIn. My profile is public to everybody, Jim Broderick. There’s a couple of them out there, but I think most of the pricing world is either on first or second contacts already with or if you want to reach out to me directly, jim.broderick@unitedsiteservices.com. 

Mark Stiving  

Perfect. Thank you. Episode 122 is all done. Thank you very much for listening. We appreciate it. If you enjoyed this, please leave us a rating and a review. And if you have any questions or comments about the podcast, or about Pricing in general, feel free to email me at mark@impactpricing.com. Now, go make an impact! 

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