Paul Hunt is chairman at Pricing Solutions. He is considered as one of the luminaries in Pricing. In 2013 he wrote a book entitled: World Class Pricing: The Journey. Of late, he is now teaching mindfulness.
In this episode, Paul talks about how companies in a fast-paced digital environment fail to recognize what their product’s true value is. With a significant change in the market and with all the competitive disruption, and deregulation taking place they fail to see what their true worth is. He also shares about his mindfulness practice and how it benefits pricing people especially those with cross-functional departments in being present, responding and not reacting, and being creative in finding solutions.
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Why you have to check out today’s podcast:
- Learn how to price value and stay relevant amidst the changing times
- Find out how to price in the digital environment and remain competitive
- Discover about mindfulness meditation and how it can help be a responsive, open-minded, and effective leader
“Value is so much of a mystery for every company. Some companies get closer than others in understanding what their value is, but there’s often a gap and sometimes a significant gap.”
– Paul Hunt
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Topics Covered:
01:16 – How Paul started a career in Pricing
02:03 – What made him stay with Pricing
02:57 – Why only a few understand value yet it’s important in business
04:44 – The need to be always relevant with the times
07:08 – Thoughts about procurement blowing up deals
09:07 – What is a challenger sale
13:37 – The biggest problem in Pricing today
15:26 – On talking to five people instead of doing research to figure out where the value is
17:48 – What makes his company sellable
19:01 – How long has he been doing meditation mindfulness? How does it help him?
21:17 – His thoughts of bringing lessons in meditation to business practice, particularly with pricing professionals
22:14 – How to be in the present moment
23:33 – Different ways to do mindfulness
Key Takeaways:
“Pricing is a disguised word for value.” – Paul Hunt
“I think they live and breathe value, but they’re almost so close to it that they don’t see it all clearly at times. That’s why they need an outside perspective occasionally.” – Paul Hunt
“They’ve got a company because they’ve built value. They’ve delivered value. They do know value in a sense, but, of course, nobody’s perfect.” – Paul Hunt
“You’ve got a challenger sale happening when at the end of the meeting the customer says, “I learned a lot in that meeting. I didn’t know. That’s the challenger sale at its best.” – Paul Hunt
“It’s kind of scary when you’re launching new technology in today’s fast environment without getting that homework done, but clients, they’re stretched, and they don’t have time. That’s the biggest challenge.” – Paul Hunt
“And I think everybody can really benefit from mindfulness practice. I think pricers who are dealing with a lot of cross-functional departments, finance, marketing, sales, operations, you’ve got a lot of responsibility, but sometimes not as much control as you’d like. The whole concept of responding rather than reacting is bang on. That’s exactly what a pricer needs to sort out, how do I do that?” – Paul Hunt
“I think of it as an open mind that has great value in terms of your ability to respond, be effective, and be creative, and all those kinds of stuff.” – Paul Hunt
People / Resources Mentioned:
- Spin Selling by Neil Rackham
- World Class Pricing: The Journey by Paul Hunt
- Mindfulness-based stress reduction (MBSR) by Jon Kabat-Zinn
Connect with Paul Hunt:
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.)
Paul Hunt
Value is so much of a mystery for every company. Some companies get closer than others that understanding what their value is, but there’s often a gap and sometimes a significant gap.
[Intro]
Mark Stiving
Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the solvable relationship between them. I’m Mark Stiving. Today, our guest is one of the luminaries in Pricing, Paul Hunt. Here are three things you want to know about Paul before we start. He founded Pricing Solutions. It’s a Pricing consulting firm in 1993. He grew it and sold it 23 years later. Wow! In 2013, he wrote the book, ‘World-Class Pricing – The Journey. And one of my favorite things, he’s now teaching mindfulness. Welcome, Paul.
Paul Hunt
Thank you very much, Mark. How did you get into Pricing?
Paul Hunt
Yeah, so in 1988, actually, I joined a consulting firm that specialized in marketing. And I got involved in a couple of projects that had a pricing slant to them, and I really enjoyed them a lot. And then I started doing some training on Pricing. The American Management Association did a two-day pricing course and I got brought on as a teacher to do that. And then, just one thing led to another that led to a bunch of pricing projects. And then I thought, wow, this is a lot of fun. I got to keep. I’m going to keep going with this. And then, you know, 25 years later or whatever number of years here we are.
Mark Stiving
Many, many years. Yeah. So why did you stick with pricing? Because there are so many fields you could go into.
Paul Hunt
Yeah, I loved it. I find Pricing is a disguised word for value. And you mentioned that at the beginning. And so, value is much of a mystery for every company. Some companies get closer than others in understanding what their value is, but there’s often a gap, and sometimes a significant gap between the company’s understanding of value and what the customer perceives as value or what they understand is value. So, I really loved it, loved that mystery, Mark, and I love engaging in that mystery and trying to help clients solve that and help clients get a lot closer to the bullseye.
Mark Stiving
One of my favorite sayings is, your Pricing problem is not your price, it’s value.
Paul Hunt
Yeah, absolutely. That’s right. And it amazes me how few people actually understand what value is, what it means. And yet it’s so important to their business.
Paul Hunt
So yeah, I think they live and breathe it, but they’re almost so close to it that they just can’t see it all that clearly at times. And so that’s why they need an outside perspective occasionally. And you know, they’ve got a company because they’ve built value. They’ve delivered value. They do know value in a sense, but at the same time, nobody’s perfect. And yeah, there’s lots to learn. The gap can get quite wide at times. And particularly for new products, we do a lot of innovation work. So, trying to figure out what is the value of innovation is huge when there’s competitive disruption, deregulation, all sorts of kind of things that where the market has changed in some significant way, the consumers change in some significant way. It’s really hard to have your bearings, you know, and to know where am I and what’s changed and what is my worth and this new competitor that’s come up with this new innovation. What does that mean to me? And so, you know, it’s the dynamics of change and it’s very exciting. So yeah, that got me super interested and has kept me going for 30 years. Yeah.
Mark Stiving
It almost seems I hadn’t even had this thought until you started talking about this, you’ve heard the saying, a fish doesn’t know what water is. And so, it’s almost like you take a successful company and they’ve been successful because they were solving real market problems and they were adding a ton of value. They didn’t really know what value meant. They just knew they were doing good things for their customers.
Paul Hunt
Yeah, absolutely.
Mark Stiving
As things start to change, it’s like, well, this is what water feels Like. This is what the value was you used to create. And now here’s how it’s changed.
Paul Hunt
Yeah, absolutely. And you know, all of a sudden I’m not as relevant as I was, or some competitor has, you know, out-innovated me or, you know, there’s been some external change that, you know, the consumer’s needs have changed and all of a sudden what was primary to them as that, and what we have is now secondary and yeah, it’s unsettling, you know, but that’s the life of the business. If you don’t like unsettling, don’t go into business because you know, that’s the way it is. It’s constantly, you know, kind of unsettling in a way.
Mark Stiving
Exactly. Right. So, over the course of 23, 25, 30 years, what has changed in Pricing?
Paul Hunt
Yeah, that’s a great question, Mark. To me, one of the most significant changes was the shift in the power of procurement. So, in the nineties, procurement was a bureaucratic backwater that just, you know, signed the paper and brought the product in. And that was it. That changed when we got into declaring and kind of, you know, getting lean and things like that. And then companies really figure out, ‘Hey, I can cut my costs to find negotiate much better if I bring a professional procurement function.’ And so many of our clients, all of a sudden found themselves totally ill-equipped to deal with procurement teams that were there and really professionally organized, their sales teams were used to it. They were into relationship selling. They weren’t challenging their customers, things like that. The whole big procurement shift was really a dramatic kind of change. And then, of course, you know, the sea changes we’ve gone through in technology, right? So, it’s just a different world now, subscription pricing is the norm for many, many industries and products that was not the case at all. So that shift, you know, the move to e-commerce and the web and every company at some level of just playing a digital game. And so how do I price in that digital environment? So those are the two big changes that come to mind when I reflect on my career.
Mark Stiving
Yeah. The whole procurement thing is fascinating because companies really do want to have these relationship sales. And I think even the buying company wants to have a relationship, but then they throw in this person called procurement who just tries to blow up the relationship as much as possible and say, let’s get the best deal we can possibly get.
Paul Hunt
Right. Exactly. And often they’re not representing the company’s best interests. There are other parties, but you know, our salespeople have often lost contact with those customers either through the buying process or, you know, they’ve just, they’ve leaned out themselves and they’re not spending time there with their customers, really understanding what their value is. So yeah, it’s a really tough game and procurement, you know, there are many procurement organizations that share facts, but there are a very limited set of facts and the facts are not necessarily portraying an accurate picture of what’s going on. So, you know, sales teams really have to be careful. The whole concept of the challenger sale is certainly a major evolution and selling, you know, selling was very much in Neil Rackham on spin selling, which was a situation, problem, implication needs payoff, you know, much more relationship-based stuff like that, but really the shift to the challenger sale. And then the book that was written about the challenger sale and showing that you know, the salespeople that really succeed in a procurement-driven environment, 50, I think it was 65% of them in a complex sale had the mindset of a challenger. Only 8% of them had the mindset of a relationship builder and then, you know, so on and so forth. So, your organizations and re-organizations have really had to shift. And the good news is relationship-based people can, salespeople can develop skills to challenge. They have to be rewarded for it. And you have to be actually willing to have customers walk away rather than constantly chasing after them. Anyways, I’m talking a lot here, Mark, but that, challenger sale is the response in my mind to procurement, it’s the way to go at best practice. And it makes a difference and can help organizations succeed, but it’s a challenging environment, tough to be a salesperson.
Mark Stiving
Yeah. Could you give us a 32nd overview of the challenger sale?
Paul Hunt
Yeah, sure. So, the relationship sale I’ll go to the relationship first because that’s where most organizations hire in the mindset. I want somebody who builds good relationships. And so, somebody who builds good relationships is what do you need? They devote a lot of time to the organization. They’re there to service customer needs. And then the mindset is, if the customer they’re trying to minimize tension with the customer. And so, if the customer has a price objection, you know, well, ‘Hey, I like what you’ve got, but I don’t like your price, the response to reduce tension as well. Let me see what I can do at the head office to try and get you a better price. Okay. So, it’s focused on the relationship with the customer. At the other end, the challenger is there to actually create the value with the customer by actually creating tension. So, they actually are doing the exact opposite thing and the tension is not in any way, treating the customer with a lack of respect, but it’s actually raising the temperature of the conversation and not buying into the customer. So, the customer says, I really like what you’ve got, but I want to, what’s your price, tell me your price. And the challenger response is, Hey, I know price is important, but before I’m going to get into that, I really want to make sure I understand your needs. Is that okay? You know, that we have a mutual understanding of value. And if a customer said, no, I just want the price. Then, you know, you literally, a challenger would be, ‘I don’t know if we’re going to be a good fit because we’re not going to be the lowest price in town, you know, but in order to effectively communicate our value and for me to really be able to let you know what we’ve got and whether we’re a good fit, I really truly need to understand what your needs are.’ So, you know, with your permission, I’d like to get into that. So just keep coming back to that and don’t accept the price objection, the price request until you really get to that. And so, you’re always educating the customer. You’re always bringing something new; you’ve got a good challenger sale happening when at the end of the meeting and the customer says, I learned a lot in that meeting. I didn’t know. That’s the challenger sale at its best.
Mark Stiving
Yeah. Nice. So, I’ve also seen similar ones mastering the complex sale. And then in the creative space, you often see people doing value conversations, which are very similar to that.
Paul Hunt
Yeah. They’re all connected. And you know, I think that the key kind of focus of the challenger sale that really does change it and it gives it a slightly different twist is just the word challenger walking in with that mindset. Because even in a relationship people want to have a very good discussion about value, right? They want it, but procurement teams are not there to have good discussion necessarily, right? And often they’ll short circuit. They use bully tactics, things like that. So, you have to elevate your game and be willing to face them head-on. And it’s like being on two sides of an opposing football team in some ways. It’s a different kind of relationship.
Mark Stiving
Nice, nice.
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Mark Stiving
What do you think the biggest problem in Pricing is today? As you’re walking away from the industry, you’re like, ‘Oh, I’m glad I don’t have to deal with that problem anymore.’
Paul Hunt
Yeah, I think probably, I mean, it’s unique to consulting and to my life and to pricing solutions, which I am still engaged in and a part of, is the time constraints that clients have, their ability to focus and bring attention to a problem, to an innovation. You know, many of our clients have amazing innovations, you know, in healthcare and technology, there’s so much going on, but they’re, you know, they’re moving so fast that they don’t have the time to really sort out what is the worth of this? And I’ll give you an example. We’ve got one client, they’re a Wall Street company. They developed an amazing platform and they thought the value was one thing. And, you know, based on doing just five customer interviews, we’re able to identify what they thought drove the most value was actually the third, most significant value driver. There were two other things above it. They were completely unaware of. So, it’s kind of scary when you think about launching technology, you know, in today’s fast environment without getting that homework done, but clients just, they’re stretched and don’t have time. And so that’s the biggest challenge. And that’s the thing I won’t miss, Mark, is that, you know, sense of, we’re so stretched, we’re in such a rush. So, the inability to maybe invest the time and stuff, and that’s not the client’s fault in any way. It’s just the nature of the beast in today’s market, fast moving environment.
Mark Stiving
What seems so funny about what you just said is, it isn’t that hard for the client to talk to five potential customers and figure out where the value is before you spend a million dollars on marketing programs or positioning or whatever you’re going to do. And I could see them saying, ‘I don’t have time to do a big research project.’ Right. Don’t do it, talk to five people, would you?
Paul Hunt
Yeah. Yeah, exactly. No, I agree. I think that’s really, really critical. And you know, sometimes like, I think the value of that particular example I gave of us doing the interviews is we’re just a little more distanced from things. We’ve got a bit of, we’re not biased. We don’t have a vested interest. So, I do think engaging a third party to move fast and get an unbiased kind of third-party point of view is very valuable. Particularly with innovation, the person who’s created the innovation is so in love with it and owns it at such a deep level and is so typically unopened to hearing about it in a certain way. And then customers are often when they meet with a company, they’re biased, and they have a point of view. They may not share everything because there, they may say, ‘Oh well, it’s, immediately they’re negotiating,’ you know, that kind of thing. So, there’s time and place to bring in third parties, even if it’s for five interviews, as you say, or whatever, right. But two, what’s your process, your repeatable process for getting good market-based information on a repeatable time-efficient, cost-effective way. I think that’s a really important question in today’s fast-moving environment.
Mark Stiving
Another consulting friend of mine, he usually starts out his engagements by asking the client, ‘Hey, list in order of the top 10 reasons people buy your product.’ And then he goes out and makes conversations and comes back and says, yeah, you weren’t even close.
Paul Hunt
Right. Here we go. Got it. Exactly. And that is so hugely valuable for the client. It creates such value in such a short period of time markets. It’s amazing. And that’s the part that I love. And then I will miss a great deal that I do miss on a kind of daily basis as those Ahas’ and insights that really bring value to the client in terms of honoring what they have built, what they’ve developed, you know, rewarding them for those things. Yeah.
Mark Stiving
Yeah. That’s absolutely right. Okay. So, you’ve done the impossible. You built a consulting firm and then sold it. So, what was it like, let’s say three years before you sold it, did you have to restructure the company or say, look, I want to plan on building it this way so that it’s sellable?
Paul Hunt
So, I had a great team in place, Mark. And so, my point of view right from the start was, you know, we’re going to go to market with the company. We’d had offers over the years from various companies and stuff like that. So, I knew there were people interested in us. And when I went to market, the market had changed, the players who were interested have changed, but no, I didn’t change a thing, actually. I just went to market with, you know, what I knew was a good company with good people who could create repeatable value and, you know, found a buyer that would value what we had and what we could bring to the table. And so, I got really lucky. I found a really, really good acquirer, which was Iris, which is a global marketing services agency out of the UK. And so, they acquired us. And then, over the next three years, we went through the integration process and it has worked very well.
Mark Stiving
Nice. Nice. Okay. Let’s change topics pretty dramatically. I want to talk about mindfulness for a second.
Paul Hunt
Love that. I love that guy.
Mark Stiving
So, I started maybe three or four years ago. How long have you been doing this?
Paul Hunt
Well, I’ve been practicing meditation mindfulness for about 10 years now.
Mark Stiving
And how does it change you when you start and why do you keep doing it?
Paul Hunt
Yeah, so I took a course called Mindfulness-Based Stress Reduction MBSR. It was developed by a gentleman named Jon Kabat-Zinn at the University of Massachusetts Medical Center. And it was kind of the first empirically proven methodology for helping people handle stress more effectively. And so that’s why I took it. I was too stressed out and needed to figure out how to handle it more effectively. So, I took this course, it was even paid for by the Canadian health care system because it’s proven to have such a positive impact. And I took that and I found it helpful, but I just kind of, you know, took five minutes every day, did a little bit of meditation and over time it grew. And then I started reading more and then I started going to some different classes and stuff like that. And it just kind of grew very gradually for me, Mark. And then, you know, to the point where now I practice about 20 minutes a day and I started a couple of different meditation groups during COVID to try and help people cope with it and get together. And now I’m teaching MBSR, actually, I’m getting certified and next Wednesday I’m kicking off with a group of 24 people on embarking on the eight-week course, teaching them. So, yeah, it’s something I’m really, really happy about.
Mark Stiving
So, I love meditation in the following sense. I think what it taught me was to react less and respond more, right. To be more careful or cautious, slower to react to things which has just had an immense impact, and the things that go on around me. But I want to apply that to business or let’s apply it to pricing professionals here. Imagine that you’re trying to build a relationship inside a company instead of reacting, you’re thoughtfully responding. And so, this just seems to me to be a practice that we ought to try to convince more pricing people to go do.
Paul Hunt
Yeah, absolutely. In fact, we have a pricing solution, we do an annual conference and we’ve got about 30 senior execs that come to it. And I think last year I mentioned I was doing this course and they all said, well, we all want you to teach us next session, Paul. So, I think they’re open to it. And I think everybody can really benefit from it. And I think that pricers who are dealing with a lot of cross-functional departments, finance, marketing, sales, operations, you know, you’ve got a lot of responsibility, but sometimes not as much control as you’d like. The whole concept that you’re saying of, you know, responding rather than reacting is bang on. That’s exactly what a pricer needs to sort out, how do I do that?
Mark Stiving
Yeah. And so how do you think meditation actually does that? I’m not an expert by any means. I just practiced, I studied a little bit for fun, but I don’t get this stuff.
Paul Hunt
Yeah. Well, it’s a pretty big field, but I will say that it’s really about being in the present moment in my mind, Mark. And so how do I be in the present moment? How do I actually be more alert to what’s really happening and seeing it, walking into a meeting, am I walking in with just my point of view and what I want to get, you know, kind of through the organization, or am I open to really listening, hearing, kind of making sure I discern what’s being said, and then being able to perhaps even come to a more creative solution, you know, and sharing my point of view. So, it’s really, I think of it as an open mind, really do that. I think that has great value in terms of your ability to respond and be effective and add value and be creative and all those kinds of things. You have to make a decision as well, but, hey, why not take in as much as we can and then respond accordingly?
Mark Stiving
Yeah. It’s actually kind of funny because I agree with you. It does feel like it opens your mind. It feels like you start paying attention more to what’s going on around you. And yet the entire mindfulness practice is thinking about what’s going on inside me. It just feels so odd.
Paul Hunt
Yeah. Well, you can do mindfulness in many ways. So, you could do mindfulness of walking, mindfulness of eating, mindfulness of brushing your teeth. There are all sorts of practices. And so, it’s actually, how do I bring the moment to moment awareness to anything I’m doing? And so, meditation is a period where we typically sit down, we tune in, we might close our eyes. We might focus on our breath, things like that. Right. Which are very internal. The breath is a great thing because it’s eternal, it’s ever-present it’s happening all the time. And it’s always in the present moment, but we can bring that. And the whole point of meditation is then to take that out and bring that to our lives and, you know, be in the present moment rather than lost in thoughts about the past or worries about the future. There’s a place for thinking about the future. There’s a place for thinking about the past, but probably not nearly as much as we all do it.
Mark Stiving
Yeah. I think that’s an absolutely fabulous answer because if you can focus on your breath, you could focus on anything.
Paul Hunt
You got it. Exactly.
Mark Stiving
So, Paul, this has been a blast. Thank you so much for your time today. If anybody wants to contact you, how can they do that?
Paul Hunt
Yeah, so phunt, P-H-U-N-[email protected] is the best way, Mark.
Mark Stiving
Excellent. Thank you so much. Episode 91, all done. Would you please leave us a review? These are very valuable to us. And plongy01 wrote for us, Gold in Every Episode:
‘Mark’s informed, insightful, no-nonsense approach to pricing is both educational and practical, and he complements this with interesting and experienced guests. Each episode provides immediate actionable insights and learnings.’
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