EP37: Vignesh Thiyagarajan – Becoming a Pricing Champion

 

 

 

Vignesh Thiyagarajan has been a strategy and pricing manager at Sears Holding Corporation. And is now doing the same for a large German company named Trelleborg Sealing Solutions. He got his MBA from the Fisher College of Business at Ohio State University. 

 

In this episode, Vignesh talks about how to become a pricing champion and the skills you need to employ to be able to help businesses determine and set competitive value-based prices to gain market share and achieve revenue goals. 

 

 

Why you have to check out today’s podcast: 

  • Learn what are the key things you have to learn to become a pricing champion 
  • Know why listening to your market is a key thing to deliver value 
  • Discover the critical role of a pricing manager  

 

You need to truly understand the customers problems by just asking one question and let the customer talk and reinforce the pain point to the customer if you use that approach across every interaction that’d be phenomenal.”

– Vignesh Thiyagarajan

Topics Covered: 

 

03:01– How Vignesh got into a pricing career, being in the retail industry then joining Sears 

05:00 – Hi thoughts about people’s understanding and perception about pricing, is it still ‘the blind leading the blind’ scenario?  

05:15 – Importance of influence in the pricing industry, being in the tipping point of pricing adoption  

14:00 – How value-based pricing is transforming the B2B and B2C industry 

16:20 – How data help you determine and calculate customer’s willingness to pay  

20:23 – His strategy as a pricing manager, how he leads and influence his team? 

25:03 – Vignesh’s pricing advice: Always experiment and always learn. Never set and forget about it.” 

 

Key Takeaways: 

 

Upstream possibilities of product development, and trying to increase the perceived value, and the different tactics or the marketing tactics to capture that will be dramatic. All the industry excites me.” – Vignesh Thiyagarajan 

 

What is value-based pricing. It is about truly bringing an optimization to deliver value, which means the customer should feel that.” – Vignesh Thiyagarajan 

 

Connect with Vignesh Thiyagarajan: 

 

Connect with Mark Stiving 

 

 

Full Interview Transcript

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

Vignesh Thiyagarajan: You need to truly understand the customer’s problems by just asking one question and let the customer talk and reinforce the pain point to the customer. If you use that approach across every interaction, that’d be phenomenal.

Mark Stiving: Welcome to Impact Pricing, the podcast where we discuss pricing, value and the interesting relationship between the two. I’m Mark Stiving. Today, our guest is Vignesh Thiyagar… Oh my gosh, I knew I was going to blow this. Just say it, Vignesh. Just say it.

Vignesh Thiyagarajan: Glad to be here, Mark. Thiyagarajan.

Mark Stiving: Thiyagarajan. I am so sorry. Here are three things you want to know about Vignesh before we get started. He’s one of our younger guests and he participates a lot in the LinkedIn discussions, always has interesting things to say, so this will be fascinating. He has been a strategy and pricing manager at Sears, that certainly fascinates me and is now doing the same for a large German company named Trelleborg. And probably the most important and coolest thing about him, he got his MBA from the Fisher college of business at the Ohio State University. Welcome vagueness.

Vignesh Thiyagarajan: Thanks Mark. Glad to be here and I’m glad that you said THE and you emphasized it. So I’m happy. You made me happy.

Mark Stiving: It’s the only way to do it. So, well first, I guess I wasn’t expecting to ask this, but how did you get to Ohio State?

Vignesh Thiyagarajan: Prior to the Ohio State, I was working with Deloitte Consulting for four and a half years as an SAP consultant. And a lot of my alumni in Deloitte, they said Ohio State program was pretty good and the network was very extensive. So wherever I go, I literally could, you know, yell at OH in the building at Deloitte and people will respond IO. So that’s the vast power of the university across the globe. So that kind of fascinated me and then started exploring the program and got interested. I was joining for the Operation Excellence Program. But right now as you can see, I’m in the pricing side. And that transition, it helped because it truly gave me a different perspective which I found a knowledge gap I had helped me join the program and truly it’s a global university. Loved it.

Mark Stiving: Nice. So before I get into asking questions about pricing, I just wanted to share with everybody. I have a Bachelor’s in Science and Electrical Engineering from “The” Ohio State University and I was a professor at Ohio State for four years. So I am a huge fan. Thrilled that you’re an alumnus. So let’s go. How did you get into pricing?

Vignesh Thiyagarajan: That’s an interesting story that could be shared. Right during the program, I was fascinated by two industries. One is retail, the other one is in the med-tech or the medical side of the business where the world economy was growing. So I was thinking to myself that if I wanted to learn something new, which I have not done before and I’m young, I wanted to experiment with myself and what I could do with the world. So I wanted to experiment these two industries and retail really struck me the most. And CRS was one of the uniquely positioned, trying to battle Amazon and the battle digital age, as well as the consumer dynamics, were changing as well as it’s struggling. So I want to understand from their perspective as in the organization’s perspective, how they make decisions. So that made me join Sears and pricing, at the very beginning was pure accident.

Vignesh Thiyagarajan: So I was joining as an MBA intern, pretty much designing on the corporate strategy. But the first project I got was on pricing. So common help with the appliances, pricing strategy mainly on the commercial side. And that was my first project. And after that, it was just a new normal. And I loved it, especially the complexity and the willingness to experiment and knowing more and more and being extremely passionate about the customers. Everything added up. I mean the hindsight, but back then I was literally being honest, really clueless as a young person who’s venturing in this specific function rather. But now thinking back for four and a half years of the work that I’ve done, it all adds up. And I would say the journey was really, really challenging and learned a lot and I loved it. So, yeah, that’s in a nutshell.

Mark Stiving: Yeah. So hard question for you though here, Vignesh. If you think back those four and a half years when you first started in pricing and you can think about the people around you that were guiding you, do you think they understood pricing yet? Or do you think it was the blind leading the blind?

Vignesh Thiyagarajan: There was really the pricing function who were dedicated for a couple of years. They knew what we’re talking, but they were not very influential to make decisions that could truly impact the customers or truly add value to the customers. And then, you know, we within the organization can capture it. So I would say there are people who are good, but they really didn’t have the power to influence yet. That is a moment where, you know. even though you have a great idea, they’ve learned a lot, they have tons of experience. The operationalizing part of that space of fake strategies or even tactics, whatever that case may be, it becomes a challenge. And then it gets questioned on the tactics and the challenge rather than the power to influence and change. So that was fascinating to me. But the wall is still yet to convert fully to this approach. There’s a lot of gaps, but I’m sure, now it’s given what is happening around me or from my learning, it’s going to be pretty fast. We are beyond the tipping point in the curve of adoption. So once we crossed it, it’s just a matter of time.

Mark Stiving: Okay. So I have to ask adoption of what? Cause I don’t see anything moving fast, so I want to hear this.

Vignesh Thiyagarajan: So with the [inaudible] side, I see value in general from, again I learned a lot from your conversations and your podcast, it’s two types. There is economic value and there is perceived value. Right now we have the tools to quantify, in a way, both. Of course we know it’s a matter of time. As time progresses, each value fluctuates up or down, supply gets influence more. So there are so many factors, but right now we have tools to crunch those data and the numbers and to build a story. That way we could influence as in pricing people, it could be product, any function, but the function are the people who do the work of pricing, can use this data, can use the tools which can help to craft their story to go and influence the right approach or the right thing to do.

Mark Stiving: So I think what I just heard you say, I think I would agree with this pretty dramatically and that is, in the retail space, the old fashioned retailers had spreadsheets and they would set prices and you know, and and nowadays we’ve got statistical models that are predicting demand on times of day and other dynamic factors and the retailers who aren’t doing that are going to get left behind.

Vignesh Thiyagarajan: Absolutely. I totally agree with you. The price tags which was invented by I think John Wanamaker to standardized pricing from individual haggling or customer specific pricing. Now it is like a food particle. We are now going back to customer specific pricing but can execute on a grander scale. And the story is so fascinating and the realization and… Everything is so fascinating. Things are changing so fast, including the Kroger’s new dynamic pricing of the price tags. I mean my eyes light up.

Mark Stiving: Yeah, so that’s really fascinating. One thing I want to go back to, that you talked about earlier and that, is pricing people often know to price really well. They often know the data and so they can manipulate the data, massage it, do great analytics and yet they don’t have the influence inside the company. And what I often see for pricing people, if you want to truly be a pricing champion, it takes three roles, right? It takes the two that we just talked about and that’s the data… Understanding data. It takes understanding the pricing mechanisms, but then it also this ability to lead inside the company. It’s a set of soft skills that pricing people tend not to have a lot. Is that what you see? And by the way, you know we’ve been talking and I’ve got to say I think that you are going to end up being a pricing champion if you’re not yet.

Vignesh Thiyagarajan: I appreciate that. I 100% agree with you because we are very good. That’s how I started as well with my career. Looking at the data, seeing, you know, I can express it, I see it, but I really didn’t know how to communicate it correctly to put a story behind it so I could influence people. But to me, for us to be effective, right now we have tools, so we also start going to a phase where we need to be a change advocate. It’s like a pricing champion, so our role should be a little bit redefined and add more responsibility within the function.

Mark Stiving: How’s the podcast going? Are you getting value? Research shows that people don’t really value what they get for free, but I’m hoping you’ll prove this research wrong. Please demonstrate to us and the entire world that you value this podcast. Would you please pause the podcast? Subscribe, if you haven’t already done so. Rate the podcast and leave us a short review. You’d be doing a huge favor and research shows, if you invest this little bit of time, you’ll probably like the podcast even more. Win-win! Pause. Do it now. We’ll wait for you.

Vignesh Thiyagarajan: I got to learn a lot from my current manager here and one of the key things I learned because right now as you know, I’m pretty young, so the manager typically she had the vision to say you’re not a good pricing person unless you effectively change the entire organization. And then the customers feel that as well that we are truly adding value. That was very powerful feedback for me. And then I took it personally and then I started making every single thing, including my emails, my reports, how we communicate and craft the message. I was starting to care about that before I was used to reporting backward, but now I’m looking forward. So that is a dramatic shift. I’m still learning. I don’t know a perfect way, but that changed my perspective, that message. So, and that is a reason why I was, you know, I personally feel, at least with the organization I’m in, the message is getting delivered clearly now and the organization slowly starting to change.

Mark Stiving: Wow. I am thrilled that you got that message early on in your career. This is pretty awesome. I have to tell you that I failed dramatically in one of my first big pricing roles because I wasn’t able to influence the people around me, the different divisions and departments and, and I couldn’t get people on board with my vision of where we had to go. And it turned out that I ended up getting a new boss eventually, and my new boss was the best thing that ever could’ve happened to me because we would talk almost on a daily basis. I would watch the way he would go do one on one interviews with everybody in the company and he cared about what they cared about and he’s listening to their goals. And it was just the most amazing experience. On the next job I had, I was much more successful at being able to influence the company.

Vignesh Thiyagarajan: Absolutely. Sounds like my mentor as well.

Mark Stiving: So mentors are phenomenal. Right? So grab that mentor… Is that the one you work for now or is that the one at Sears?

Vignesh Thiyagarajan: I had one at both the places and in my current place right now, it’s amazing. And in the Sears way, again, it was more on the analytical side, more on data-heavy because that’s how retail in general, as an embodiment, it works. A lot of data quick and fast decisions is very, you need it, you needed fast, but there was not a time or a moment to take a step back and see do we really have a strategy behind it? Or are we just chasing something? Or are we just repeating what we were doing last year? But essentially that’s what ends up happening. If you compare things from this year to the last year, with the unique product codes, there would be absolutely zero change and the financial programs may be extreme go up and down, but there’s nothing different. The holiday cycles got stretched. So right now when you look at it, maybe if you’re lucky, 10 to 15% down on holiday period. If not, it’s going to be the same price all over the year. So it stretches so much because after that there is no going back. You are in a cycle already. So that is what the retail side sort of taught me in the B2C. On the B2B, it is very, very different. It was purely value. I had the time to build it and then I started looking at things on how to do it and grow and where we need to change because there is no, sometimes there’s not a need for a fast decision because the product development cycle with the customer takes a lot of time. So that gives us an opportunity to truly understand what does a value, the product as gives you as a supplier or… Gives you and those interactions gives you. So in the mechanism in a customer journey set we, the funnel, gets extended in a purchase cycle. So we have time. Or in retail, in the purchase of the [inaudible] and the last end of the funnel is so small, so you need to be rapid and everybody is focused on the last bit of the funnel. The top retail brands are already there. Everybody knows about them. So everybody focuses on the last bit to convert. So that is the reason why I feel that taking a step back and maybe change a couple of those will make retailers successful in the future.

Mark Stiving: Yeah. I I think what I just heard you say and it’s something I believe pretty dramatically and that is that on the B2C side we use a ton of data, a ton of statistical techniques to try to tease out what’s happening in our marketplace so that we could set new strategies, new prices. On the B2B side, we actually have to go talk to our customers or listen to our customers and our market and our buyers and understand where they get value and how they get value. And what I think is pretty fascinating is if you took those concepts and brought them back to the B2C, we could build better B2C models, we could probably do a better job.

Vignesh Thiyagarajan: 100%! and B2C gives you a new avenue of opportunity is the perceived value. Like if you go and look at your t-shirt and then what is the perceived value? We know the economic value on this, but we can truly apply the perceived value and get to quantifying them. And then what is the willingness to pay? So the cycle fits, right? So the data should help you support and what is the willingness to pay? How they value that, also could be quantified. But the concepts from B2B to B2C, I mean taking concepts from B2B to B2C would be fascinating. I think that is what everybody right now should be moving towards. And when you think about the upstream possibilities of product development and trying to increase the perceived value and the different tactics or the marketing tactics to capture that will be dramatic. So I’m just, all of that industry excites me and how the B2B concept can be applied to B2C truly do excite me. So it’s fascinating. Yeah.

Mark Stiving: Actually that’s a really good thought. I work mostly in B2B because it’s way harder cause you actually have to go talk to people and understand the way they think. And, and yet the thing I think that’s easier in the B2B side is because we’re listening to customers, it’s easier for us to understand what the real value is and then go build the right products that have value. In B2C, if you rely completely on this data, you’ve now lost that value piece. I don’t understand what I should go build next. I don’t understand what people value, which is, which is pretty fascinating. So tell us what does Trelleborg do? I want to understand a little bit more about what you’re doing now.

Vignesh Thiyagarajan: Trelleborg is a polymer engineering manufacturer, so they make seals. So they are sealing solutions provider. What they make is like, in an airplane when there’s a… If you’re flying on the air, there is a pressure outside and there’s internal pressure is better to the humans. But the outide pressure is something very extremely dramatic. So it is used to protect from, you know, balancing pressure, internal and external. Also the temperature, the leakage and everything. So that’s the space that we are in. Aerospace is just one example. If you think about everywhere your water bottles everywhere they are there and everywhere.

Mark Stiving: And so you guys are mostly B2B companies now, is that right?

Vignesh Thiyagarajan: Yes.

Mark Stiving: Nice. And what do you do there? What’s your daily role?

Vignesh Thiyagarajan: My daily role was one of the key things is we’re moving towards value-based pricing. And that is my top… I would say objective. I’m building this capability of value-based pricing. So the first step, in general, I’m taking is educating value. What is value-based pricing? It is about truly bringing an organization to deliver value, which means the customers should feel that. It’s not just about we think that what the customers think value, but it’s about truly talking to them. It could be as simple as meeting their on-time delivery metrics. Sometimes it could be, mostly it’s quality. Quality is a point of parity. It’s not a point of differentiation, but it’s knowing that what is the table stakes and what is the differentiator from the customer’s mind. That is exactly what I’m doing. And by having some conversations internally with the sales team. And then we have some marketing specialist team and then they’re getting the perspective from the advice from the customer. So it’s bringing all those data and then breaking down by every segment and then building this model as in what the customer truly is valuing and then how we can build a water flow model to quantify them. And then how we can get the willingness to pay through some couple of customer interaction models. That is my control. It’s pretty vast.

Mark Stiving: Nice. Yeah. Well, I’ve certainly enjoyed it when I’ve gotten to go into a company and they say, okay, we’re trying to implement value based pricing. Let’s figure out how to do that. Because every product line you go talk to, they think they’re doing it right already. And now it’s a matter of, okay, how do we do it better? How do we do it? How do we convince them they can do it better without saying you’re wrong and I’m right. So it’s back to that being a champion one more time. We’re leading people. And so how do you do that? What’s your strategy? The first time you go meet a new product line?

Vignesh Thiyagarajan: I would just get there. I doubt something was wise of product manager. So I have a bunch of questions in general, what we think or how we uphold the specific products deliver value and which customers groups they think they deliver value. I don’t ask about data, I just ask qualitative questions because every single one of there, whatever their perceptions can be answered through data because that is not what I’m going there for. And just wanting to know their gut feeling and how they make decisions. So that drives… I believe that decisions drive delivering value to the customers. So I asked about the relation points and their experience in the past and some successes, some failure and their thoughts on this. And then I connect the dots from, let’s say they talk about some customers. So I have a conversation with the sales engineers and build their story and then I go to the customer and build their story and each step of the way I’ve added it with data.

Vignesh Thiyagarajan: And then I start off in a puzzle, connect the missing pieces and then build my own recommendation in terms of is this a viable market? I talked about the willingness to pay. There’s also a willingness to accept. So based on the organization’s financial goals, is this something we are willing to continue or accept and play in this marketplace? So that is how I build one after the other. And the other one is, if you think about it, it’s about what the problem that we’re solving when we quantify there is a number of hours, there are so many ways how to measure the value we bring in or others solution that we bring in in terms of time, in terms of their finances or their KPIs. And that is also as a way to quantify them. But I get into the approach at the very beginning of qualitatively connecting the pieces and then, you know, validate that with the data to fill in the gaps.

Mark Stiving: Yeah. So listening to everybody’s a great idea, just constantly listening. I love that. I work a ton with product managers and it always amazes me how, and I don’t want to be super nice, how little product managers actually understand the value of their own products.

Vignesh Thiyagarajan: And I found the same as well. So there is an urgent need for the product managers to deliver success. And what happens is in those urgencies, they lose the value for the product. So if they wait for that adoption curve, the product delivers more value than you can capture more value. So that urgency is something hard to resist for them because they want to see success, they want to see results right away. So they tend to take decisions where they shouldn’t even be worried about making decisions. So this is something I’m learning and so I have certain points I’ve noted down so hard to resist, do not do solutions, just ask questions like just listen to them because those are things pretty hard to get as a young person. I was delivering, why don’t you do this? Why didn’t you do that? You could talk to the inventory people and hold more inventory to meet the sales standards, whatever that is. So I was getting into solution designing before even understanding the problem. And sometimes that happens across every function. So if I take a step back and in one of, I think one of your interviews, I forgot the gentleman’s name, he said, you need to truly understand the customer’s problems by just asking one question and let the customer talk and reinforce the pain point to the customer. If you use that approach across every interaction, that’d be phenomenal. I mean, you truly listen rather than just react. We actually respond.

Mark Stiving: Yeah. It is so hard for anybody. I don’t care if you’re talking to a customer or talking to a colleague inside your company. It is so hard to not offer suggestions or solutions to problems. Man, it’s something that… You learn so much more when you don’t do that. So nice. Nice. Okay. We’re going to be running out of time here in a second Vignesh, but I’ve got to stop with the best question of all. What’s the one piece of pricing advice that you would give our listeners that you think could have a big impact on their business?

Vignesh Thiyagarajan: This is something I learned from Sears as well as in my current organization. Always experiment and always learn. Never set and forget about it. That’s the worst thing to do. Never do it. Always experiment. Learn from the market because the market always changes. The customers change, everything changes. It depends on which industry you are in of course, but it keeps changing. So always experiment and learn and continuously tweak your models. This would, to me, it has delivered successes and I would recommend that.

Mark Stiving: Yeah, so it’s an attitude that says pricing is never perfect. Let’s keep working at it.

Vignesh Thiyagarajan: Absolutely. I like one, pricing is like a marriage. It is complicated. It grows and you get better over time and then if you make mistakes, you will get a lot of kids.

Mark Stiving: All right, Vignesh. Thank you so much for your time today. If anyone wants to contact you, how can they do that?

Vignesh Thiyagarajan: The best way to contact me is through my LinkedIn connection. It’s Vignesh Thiyagarajan. You can add me as LinkedIn connection to another links.

Mark Stiving: We’ll have it in the show notes so people don’t have to try to spell it. All right. Episode 37 all finished. My favorite part of today’s podcast, I’d have to say, I love talking about becoming a pricing champion with Vignesh. That was interesting. So what was your favorite part? Please let us know in the comments or wherever you download it and listen. And while you’re at it, would you please give us a five-star review? Those are valuable to us, so we would take them. We’d be very appreciative. If you have any questions or comments about the podcast or about pricing in general, feel free to email me, mark@impactpricing.com. Now, go make an impact.

 

**Note: Mark Stiving has an active LinkedIn community, where he participates in conversations and answers questions. Each week, he creates a blog post for the top question. If you have a question, head over to LinkedIn to communicate directly with Mark.

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