[00:00:00] Speaker A: Welcome to the Independence by Design podcast, where we discuss what it means to be a business owner and ways to get unstuck from the day to day so we can design a business that gives us a life of independence.
When we talk about pricing, I think a lot of people think that there's this secret recipe that says if you charge X for your product or service, it's going to unlock all of the sales and you'll not have any friction with your customers, and everything will be absolutely rainbows and unicorns. And I can't even say that without laughing because we all know that that's not the case. And Kasey Brown, who is the founder of Boost Pricing and that pricing expert is back on the show. She's a dear friend. She's got a TEDx with millions of views. She's an author. She's been talking about pricing for decades. And in this episode, we specifically dive into the psychology of the salespeople holding the line on the margins so they don't give up a discount, and then they actually feel confident charging the value that you actually know that you can provide, and it's going to make or break companies. As we look at the economic turmoil and all the things that are going on, I absolutely believe with a hundred percent of my soul that if we can manage our revenue and our margins and hold those and constantly be looking at the margins, we can actually adopt to the different things that are going on. But we need to make sure our. Our salespeople are not giving away the discounts after we do all of the work behind the scenes from the boardroom. So Kasey's gonna be diving into how do we actually think about pricing from the sales perspective to make sure that they feel confident and empowered to actually hold the line and handle that conversation about the pricing with confidence. Thanks, everybody, for tuning in. And here's my episode with Kasey Brown.
All right. How are you? We are on the air.
[00:01:49] Speaker B: All right.
Time to bathe.
[00:01:51] Speaker A: So many. Yeah, exactly. We are having good laughs.
I wanted to have this conversation because you and I were talking about your service offering. One of my clients recently just went through an engagement with you. We can talk about why, and I'm very excited for him and the outcomes that he's driving towards about increasing his prices. So he went through and increased his prices.
He was like, oh, my God, all my salespeople and all their fucking head trash. I need to help them so they don't just blow this whole thing up.
And you and I were talking about it, and you had said something about, I think, some of the confusion in the marketplace that I will admit that I was subject to at the beginning when you and I met. Like, are you a pricing mechanical expert of, like, this widget should be caught, and that should cost this much money versus dealing with what Bill was dealing with, which is, I mean, to hold the line and the margin. So, I mean, that's kind of the overarching reason, Kasey. And then there's a lot of sub categories in there that I'm excited to unpack. But how do you want to react to the first part?
[00:02:53] Speaker B: Well, you know, in a perfect world, given unlimited time and resources, you would have a perfect pricing strategy, meaning the structure, what you're charging, how you're charging it, the units of measure that you're selling. Are you selling, you know, for the, you know, like a professional services firm. A classic example is, do we sell hours, or do we sell fixed fee, or do we sell whatever? Right. So the structure's right, and the numbers inside the structures are right, and it's just perfect, and it's dialed in and it's informed by competitive landscape and all kinds of other things. The reality is that isn't where the biggest problems lie. So, you know, in other words, sometimes people come to us and they say, oh, my gosh, we need your help figuring out our pricing structure, because we think we could do this, you know, a little bit better. And then we chat and, you know, maybe they're a B plus pricing strategy. Like, there's probably some improvements that can be made by small changes in their structural design.
But turning a B strategy into an A strategy can take a lot of time and, frankly, a lot of money. And at the end of the day, if you hand that improved strategy to your sales team and they are not equipped, they don't have the sort of right skill set and mindset to execute on it. You've wasted your time and money turning your B strategy into an A. Whereas if you have a sales team who is otherwise competent and confident, but when it comes to the ability to hold the line on pricing, if they're pricing competence is a C minus, then, you know, turning that C minus into a B plus or an A is a lot faster and a lot less expensive than fixing the strategy. And you're going to get most of the bang for the buck out of the team's improved execution of your strategy, more than you will out of doing just the strategy. Now, again, perfect world, sure do both. But you want to get 80% of the benefit In a tiny fraction of the time. Start with execution.
[00:04:40] Speaker A: I think that is such a good framing for. I want to talk about how we do that. What's, what's the, how we do that. And let me frame up a couple things because you know, I'll put the links to our previous episodes in the show notes so people don't have. So that way you and I can continue the conversation. People that have listened to it, like I know there's a couple people that are die hards of you that will be. Is.
Okay, so Kim Clark, who you're aware of and familiar with too, she has been like really, really spearheading the, the predictable, predictable revenue engine module of ibd. And you know, she was on talking about what the CRO does and like managing all the revenue. And so for anybody listening in, what I want to put the container on this conversation is like, let's just, let's assume we're working on that. Like, let's assume that like instead of going, hey, no one gets it, it's like, you know, let's assume that we've got the revenue machine going. To a certain extent, the revenue machine and the margin machine are working hand in hand going like, hey, we have a unified plan here. We're not just making up. So I think that's relevant, Casey, because the ability for us in the next handful of years, given the turmoil that's happening on with the economic engine of the world and the supply chains and inflation that is bound to continue, like what's going on as we speak is going to ripple through supply chains is probably going to be worse than Covid in my opinion, along with the US dollar. So looking at revenue and then the gross margins and holding the line and then adjusting for people like listening and I'm like showing like this wave format, it's like we need to do this and have a plan over the around this, otherwise our company could be in jeopardy. So instead of like squeezing a couple extra points out, I think it could be life or death based on people's ability to execute this. So with that, when you say execution, so talk a little bit more about what you mean by like, what does a good execution, like when someone's rocking and rolling, what does it look like?
[00:06:36] Speaker B: Sure. So when I use that terminology, I'm speaking to the sales team's ability to achieve what you set out to achieve and charge what you set out to charge. And that is always to me value based and the most you can get for the value that you deliver. And so if you're worth, you know, X, but your team is routinely charging 90% of X, then that gap is tens of thousands, hundreds of thousands, even millions of dollars of profitability. So to me, execution, like world class execution, is closing the gap where we are never discounting to customers who would pay us full price. We are never negotiating against ourselves. We're never blanching in the face of a competitive quote that doesn't do what we do the same way we do it and using that to cause us to undercut. So it's essentially charging as much as we can in the face of commercial and competitive realities.
Now what I think this is an answer to a question you didn't ask. But I think it's important. Lots of teams think they're already doing that and where, you know, I think I bring a lens and a lot of experiences. There is a gap between what they're doing and the best they can do. They just don't see it for a variety of reasons, which, you know, happy to talk about, but really there's a belief that they're charging as much as they can in the face of competitive pressure. And the reality is they're leaving some money on the table. So execution to me is not, should we have, you know, add one more pricing tier? Like, which is a structural question. It's more for the tiers we have and the way we already intend to go to market. How is our team executing on that vision and getting the price that we ask for?
[00:08:13] Speaker A: I love it. How do you determine, you, meaning the owner of a company or the person responsible for revenue pricing, how do you determine what your ceiling is? So how do you know that there's a gap? Like, how do you actually have that?
[00:08:29] Speaker B: Oh, that's a brilliant question. No one does know. I don't know it. The owner doesn't know it. Their salespeople don't know it. Their customers don't even know it. Really. This is, in my experience, can be informed by information, but at the end of the day, the absolute what's the ceiling? Is informed only by testing. Until you make something available in the marketplace at a price and people buy it or they don't buy it, it's all guesswork. You know, the data is the sale, the data is yes or no from the customer. And so in my experience, I just had lunch with somebody the other day and she said, how do you know when you meet with a company if they're underpriced? I, you know, what do you, what questions do you ask them to uncover if they're underpriced. I said, I don't want any. 100% of the companies on the planet that I've ever met are underpriced, Meaning in some corner of the business, there's something you could charge more for. So if in my. And I have yet to be proven wrong, now I'm ready to meet a company that's charging as much as possible.
[00:09:25] Speaker A: Delta Airlines.
[00:09:26] Speaker B: But what's that?
[00:09:29] Speaker A: Delta Airlines.
[00:09:30] Speaker B: Yeah. Well, yeah, we're not here to talk. Yeah, I would argue that probably.
[00:09:34] Speaker A: There's probably. They could probably charge to go to the bathroom, just like some country does. Okay, I digress.
[00:09:40] Speaker B: I just, I find over and over again that there are some areas of unexercised opportunity in the business. So that means there's some room between where we are today and where we fall off the cliff. And I will tell you, in literally hundreds of cases, every client we've ever worked with, probably over a thousand at this point, their belief about where that cliff is or where that ceiling is is in the wrong place. They think it's 2 inches in front of their toes, and if they nudge their feet forward, they're tipping over. And I know it's across the room. And they're not going to ever believe that until they start to try it. It's very much like a case of. It's like experimentation. It's empirical. You can map out how much unexercised pricing power you have by trying to get a little bit more and seeing what happens. And when you get it, then you can try to get a little bit more. Some people want to map that space out faster, and they're willing to take bigger risks. And, and the risk, of course, is possible sales, volume, loss. So, you know, the answer is, how do you know? You test it and you, and you test it in accordance with your risk tolerance and your penchant for uncovering your own exercise, pricing power, and balancing those two things.
[00:10:47] Speaker A: The conversation that we had, I think it was the last one on the, on the podcast and, you know, I've had lots of conversations between there. I believe one of the main focal points was like, data and how to, you know, once you have the owner's plan, you have the data and it provides that exercise that you just talked about with more confidence. But I'll even go a little bit step further because. And I'm not trying to put you on the spot if you. Did you listen to podcast with Kim Clark, the CRO one. Cause I know you. So, like, okay, like, mechanically like how I would love to see someone do what you just said is, so if someone has the predictable revenue engine that Kim is talking about, where there's the complete womb to tomb conversion rate, where there's the five, you know, conversion points, and it's tied to the forecast, then you can say, all right, here's how we do what Kasey just said is, here's how we test it. We, like our conversion rates right now are 30% at this point, and if they go down, but then the revenue goes up, we can actually mathematically see what you're saying. So, like, that would be the way to do it with confidence.
[00:11:45] Speaker B: Yeah. I also think you can use data to identify the lowest risk areas to do it. So you're describing sort of like our win rate is X and depending on what happens with win rate and pricing, are we money ahead, even if we're slightly smaller? Whatever. Right.
You can, you can segment your customers, segment your products and services such that you take, you tackle the. The lowest risk, highest impact areas first. I'm a. Jim Collins wrote good to great. He said, bullets before cannons. Right? Like, how can you improve your, you know, like essentially or like when you're, you know, target shooting, the first shot is for sight, and then from there you go. Right. So we're trying to sight in our, our aim. And I think you can sight in your aim. And by that I mean, like, if I say, if somebody's listening to this and says, okay, I do believe that Cliff is right here and she's telling me it's across the room, I'm willing to see if she's right, but I don't want to do that with my biggest customer. Well, of course not. So where do you have maybe smaller customers or customers that you're already unprofitable or low profitability, where the loss to your organization of a miss is low, but the value gained from a hit is high and. Or the value gained from information gathering is high. So an example is small, unprofitable customers. If you start there and try things, you can tune your strategy, you can tune your messaging, you can tune your approach, and then you find out like, no, the cliff is not there. Now, the cliff isn't in the same place for every customer, obviously, but this is data that gives you information to allow you to tune your strategy as you go. What, what I find, I can't hear.
[00:13:15] Speaker A: I can't hear the word find out without thinking about that.
Fuck around and find out.
[00:13:20] Speaker B: Oh, yeah, I like something between FAFO and like, you Know, I look, I'm an engineer, so I like to design in some intelligence to this and I believe there are ways to get the biggest impact for the least risk. And for sure, I think, you know, you can use data for that. I think though that we can. What I see, you know, too often is almost analysis paralysis. Like we, we get ourselves spun into such complexity when we start trying to use the data to inform our pricing strategy. And honestly, like, even if you develop a great strategy, once again, like, okay, now we're going to go try this higher price point with these 50 customers. Well, if your team isn't equipped, if they're not armed, if they're not skilled at a masterful level in communicating that price increase and the value associated with it and why they should pay it, then you're not going to be testing.
It's like conflating variables. Like this is for engineering speak, right? Nerd speak.
You're testing both their skill set and your ability to charge higher price at once.
So if it fails, you don't know which thing went wrong. Was the team not well enough skilled to do it or was the price point too high? We're all about eliminating enough.
[00:14:37] Speaker A: Even more nerd speak is like, are they even independent variables?
Probably not, no.
[00:14:44] Speaker B: For sure, not for sure not.
But one can sabotage the other so fast. Which is why we're all about that execution side. Because now we've at least made sure that we have the ability to communicate and defend value over price and compete on value, not price. And then, and only then can I think we really, in a really clean way understand what customers willingness to pay is.
[00:15:08] Speaker A: So I want to come back to, I'm just doing this for your nice sake is I want to come back to how to communicate and the execution part of that. But you were talking about something really good that I liked is like that, that the client list or like, and I would add product and service list to that too of like a shittier product or service that you don't like every which way how like do you have a practical like matrix or chart or something like that you have people go through to help them think through that so they don't get stuck in the analysis paralysis.
[00:15:37] Speaker B: So of course we don't because what we do is they, we focus exclusively on the execution. Okay, okay. They, you know, they can get 80% of the benefit without doing any analysis by training the team.
That said, I'm a big enough geek on this that of course I have thoughts about it. And chapters 15 and 16 in the book Fearless Pricing are specifically about some analytical tools and some frameworks for thinking through how to identify some of those high impact, low risk areas of your business.
So I'm a fan of doing the analysis. I just think that you're better off getting your team ready.
[00:16:10] Speaker A: I think that's a perfect explanation too of the, what you guys do. I, because I'm just such a fan of what boost and what you do. That, like understanding the, how that's different than like the mechanical strategy. And that's where. So when you are working with teams. So given Kim Clark's revenue discussion that you and I, or that her and I had, that you are familiar with, you have sales and marketing, there's different silos, but then someone's managing the whole situation using that kind of language. Like, how would, how would you describe a team and how, like, what are the different facets of the team that you work with? And then we'll talk about how you actually deploy that communication and skill.
[00:16:51] Speaker B: I'm not sure I'll do it exactly in the language of Ryan Tansom and Ken Clark, but I'll.
[00:16:55] Speaker A: You get the concepts. I mean, like, yeah, yeah.
[00:16:57] Speaker B: It's essentially, I mean, our focus is the sales team. That said, it's about value. Every single thing that happens in the pricing space is rooted in the value you deliver. And so there's a really, there's strong connection lines there, of course, into the marketing function because that's like, what story are we telling such that people believe our values there. That's a big marketing play. There's also sometimes some connection points into the operational side of the business. Because very, very often where customers derive value from buying from us isn't always captured completely or even understood completely by our sales and marketing departments. And so having some integration with the operational side, say, like, where do you hear customers complain a lot? Where do you hear customers are delighted a lot? Like, it's very smart to have an interdisciplinary approach to this because to me it's a cultural thing. Do we have a culture of value and commanding a premium for that value? Do we have a culture of value and a culture demanding a premium for that value? Because if we don't like, it's, it's not going to be good enough to only have great messaging for marketing. Right? Like, it's, it's really about, it's a, it's about understanding that that kind of culture is what promotes the highest profitability. So kind of to bring it to ground to like how we work, who must be in our Programs always is the sales folks, the people that do the frontline pricing and selling and making decisions. Like maybe the corporate gives them some pricing guidelines, but they have the ability to discount or, you know, that, you know, maybe pricing floors or margin floors or whatever.
Those folks and their leaders have to be in the program because they're the ones actually going out telling the customer the number, getting punched in the mouth and told so and so have three other quotes, right? They have to take the punches. They have to stand there and get rope a doped and still get the deal, right. So they're the, they're the front line. They're the ones getting the arrows. So they have to have it. It's fantastic. And we recommend. It's really great to have some marketing representation in there, not just for two reasons. I think like anybody who's in a training program like this, it's valuable because their eyes are in the room, their ears are in the room, and the mouths are in the room, meaning ears are in the room. They're learning, they're hearing what other people are saying. That's informing how they work. They're also the right mouths in the room, meaning they're contributing to the conversation. They're sharing what they've done and seen and tried and used and what's worked for them and what hasn't. Our programs are really like, there's, it's, it's kind of a 50, 50. 50% is. We're teaching people to do things very differently and think about things differently and shining a light on it. The other 50% is very application. So they're bringing their own sales situations, customer situations. You know, hey, I'm. I'm prepping a proposal tomorrow and I need some advice on this or I got this objection yesterday and I didn't know what to say to handle it. So it's like they're bringing the raw material of their selling life together with our, our training content. And those two pieces are what create the product program because it's so application driven. Breakouts, brainstorms, role play, identifying opportunity, all that. The right voices in the room are just as important because sometimes, you know, you ask any sales leader, you know, tell me about your sales team. Put them in rank order in terms of their ability to like close deals at high profits. They can do it. They may not want to. They may not want to put somebody on the bottom of the list, but we all know that there's rock stars out there and there's people that struggle with it. And the reality is they would love to have more ability for their rock stars to teach.
They're less effective salespeople. But there's not really a mechanism to do that. Our programs are a format for that to happen. Because there's a lot of like debriefing on. Oh, did you try that? How'd it go so suddenly? Well, I, I said this and it didn't work. And another member of the team that's one of your stars says, really? Because I use that tactic quite a bit and I find it really helpful. And here's how I say it. So there's like a cross pollination that can happen.
[00:20:42] Speaker A: What you're harnessing is like selling like, what do we do here?
And then like giving the salespeople that are communicating the power to believe that.
[00:20:51] Speaker B: Yes. What tactics to go with it.
[00:20:54] Speaker A: How would you, how would you describe your structure and your program compared to what people will call like, hey, that's sales training. How, what's your response to that?
[00:21:07] Speaker B: Well, in, in a sense it is sales training, meaning we're training a sales team.
[00:21:11] Speaker A: Right.
[00:21:11] Speaker B: But unlike traditional sales training that covers everything from prospecting to closing and everything in between, and because it's so broad, it's necessarily not as deep.
We are, we are a teeny little slice of that. Very, very deep. And that, that has the advantage of allowing us to bolt on really nicely to any sales training program or sales methodology you already might use. So if somebody's listening to this and go, oh, we already use Sandler or Challenger or what spin selling, any of them, great. We work really nicely inside a framework that already exists. We just go way deeper on the things that specifically stop people from executing in the space of charging as much as you possibly can and still winning the deals. It's a very, it's kind of like a strike force, you know, on a, on a really narrow topic. And because of the disproportionate leverage of pricing on profitability, bringing you back to your financials and your three statement models and everything, the degree to which pricing affects profitability makes it such that there's no other element of, you know, sales mix. Anything else you're doing as a salesperson that contributes to the profitability. Pricing's the biggest lever in most sales.
[00:22:22] Speaker A: I was just doing a review over
[00:22:23] Speaker B: it and talks a little bit about it and it's like, here's our one module out of 50 to talk about pricing. Meanwhile, we're like, we're deep on it.
[00:22:31] Speaker A: Yeah. And like, it's so cool because I was just doing A review with one of my clients on our monthly owners meeting. And we were going, she's now got her three statement model up, she sells services.
And in the template that Pat has built for all the clients is you can see what results or what, what is the result of the more profit and how much has to do with revenue versus how much has to do with gross margins.
And just for, because I didn't just for the listeners and gross margins being the percentage and gross profit being the dollar amounts, that's one of my clients. Like I didn't know that. So it's like I'm just don't brush over this stuff like it's important. So it's like what we were able to see, Casey, is like how much more money they made because their gross margins. And then it was like what's the product and service line? Like why, what, what happened there? And how much it impacts everything else is unbelievable when you have more of those margins. So to your point, it's such a needle mover that it's like hard to, it's hard to describe.
[00:23:32] Speaker B: Well, and you think about, you know, and I hate to get all financially nerdy here, but I know I'm doing.
[00:23:36] Speaker A: Oh come on, you can do it.
[00:23:37] Speaker B: I'm with the right company here. Like you take a super high profit margin product or service, let's say it's 85% gross margin. Well that's bananas, right? That's amazing. Like you would love to sell, but it's like you still only keep 85 cents of the profit for that product. If you change price, you keep 100% of that because there is zero incremental cost. Zero. So it is x percent increase in price has a bigger impact on profitability than X percent increase in sales volume or X percent reduction in expenses. But companies are super focused on sales and volume and super focused on expenses and operational efficiencies and errors and far less so about pricing. I mean, I'll ask in a, in a keynote audience. Raise your hands if you're having sales meetings or sales dashboards or sales initiatives or sales programs or sales leaders or sales teams or sales, whatever. It's like everybody does, right? Same on the operational side. And then I say raise your hand if you're having regular strategic pricing reviews and like one or two hands go up because people don't even know what I mean by that question. None of them are having strategic pricing meetings. They're talking about pricing, but it generally tends to go to like, hey, we have this brand new opportunity. What should we quote on it? You know, or we're. It's.
[00:24:45] Speaker A: It's proposal and, and like one client had a feedback thing and it's all
[00:24:50] Speaker B: reactionary to a situation. It's not stepping back and looking at their whole business. And even things like you said, like you mentioned the win rate earlier, the conversion rates, like, if conversion rates are steadily ticking up, what might that mean about our pricing opportunity? Yeah, there's lots of factors that affect that, but we could look at that kind of stuff to trigger us to review some decision making.
[00:25:13] Speaker A: Sorry I interrupted. I.
Right the way I had to say so one of my people got on the podcast. You. Who cares what the people think about your interrupting? I was like, well, Casey told me her. Her life growing up as a kid was a perpetual filibuster. I have used that so many times.
[00:25:29] Speaker B: I see the floor.
[00:25:31] Speaker A: Oh, there was a microsecond that you interrupted that you paused. So to comment on what you were saying there about the, the like I want to. A couple of just this spray. A couple conversation or comments that we want to unpack is like, how would it actually get the people to communicate this? And then like, what. What are the things holding? Why is this.
[00:25:55] Speaker B: Why is this hard?
[00:25:56] Speaker A: Why is this so hard? Yeah. And then like, how. How do we go about it?
[00:26:00] Speaker B: That's my favorite question so far because I think, like, until you get to the root cause of the obstacle you're going to be, it's like you're putting band aids on it. Right, Right. And this is again, kind of how I would answer a little bit. Compared to traditional sales training. A lot of training is very tactic oriented. Say this, do this, follow this process. If the customer says this, do this, you know, and I'm, I'm. And it's, it's a real skill driven. Right. Like build better skill around communicating value or asking more questions or handling objections or whatever. Right. And I am very pro skill. That's great. The problem is that isn't why we aren't successful when we're not. It's not that we lack skill generally, not that we can't get better at it, but a lot of times people know what to say, what to do, what process to follow. They've been trained, they know. But in the moment when that customer is saying, brian, I like what you proposed here, but I got to tell you, I have three other quotes that are sitting on my desk and I'd love to give the business to you, but I can't do that unless you can match this price if you match this price, we'll go with you. And they put their hand out for you to shake it, right, like, and you're sitting there, we all are sitting there when something like that happens and we're like, oh my gosh, amygdala's freaking out, right? We get in our head, we get in our gut, we start panicking. Like, let's say you propose 45,000 and they're giving you a quote to match, that's 40. And you say to yourself, well, 100% of 40 is better than 0% of 45. And I'm having a soft month. And my most, I'm, you know, my boss is on my mortgage.
And we eat it because we get afraid. We get afraid. Fear is the dominant emotion present for pricing decisions and negotiations, not anything else. Fear even, like, if you, if you line up salespeople at a company that does good stuff and you say, tell me your value prop, they'll tell it to you. And then you say, do you believe in it? Yeah. Do you help customers? Yeah. Do they love it? Yeah. And then they don't act like they believe it when they're actually in the heat of battle, when they're actually getting punched in the face by the customer about pricing, they discount because they're terrified. And there's all kinds of things that drive that fear. One is asymmetrical feedback. Meaning how many times in your life, when you were back in the, in the, you know, in business with your dad, did anybody say, oh my gosh, Ryan, that is a deal of a lifetime. I thought you were going to quote me a price 30% higher.
Zero times, probably. Zero times, right?
[00:28:19] Speaker A: Yep.
[00:28:20] Speaker B: How many times did you hear, that's a little high? That's not in my budget. You're more expensive than the next guy.
Is that your best number? Can you sharpen your pencil every day?
[00:28:31] Speaker A: Every time.
[00:28:31] Speaker B: 10 times a day? 100 times. Right. We only ever hear we're too expensive, even when we're not.
Sometimes. When we're not too expensive, sometimes people just say, okay. Other times they still say, is that your best number? Can you sharpen your pen? Because why not? Can't hurt to ask. So we get asymmetrical feedback. All that feedback's negative. It's like if half the world thinks you're gorgeous and half the world thinks you're ugly, but all you ever hear is, you're ugly because there's an advantage. There's a built in incentive for the buyer to tell you you're ugly. What are you going to start to believe so that our confidence gets chipped away. Chipped away, chipped away by the asymmetrical feedback. All negative. And the risk, you know, the cost is high because if I don't sell this, I don't close. I miss my quota, I don't get my incentives, I don't get my variable comp right. So fear runs the show.
So our training and any good training in this arena cannot just be about skill. It has to be about unpacking the fear and naming it and giving people access to overcoming it, such that they can actually stand in front of the customer and say, I hear you saying you got another quote for 40,000. And then you, then you, what do you. Where do you, where do you go from there? What do you jump into? What do you say? What do you ask? Such that you walk out with that deal at 45, which is your original number.
[00:29:44] Speaker A: What are your, like, is there a short list or like, top things of like, how to overcome that fear?
[00:29:54] Speaker B: Yes, it's a, it's harder to describe on a podcast in a way that somebody could action it, but I'll, I'll try to do it and then you can.
[00:30:01] Speaker A: Yeah, well, I want to, I want to talk through because I got a, I want to get an example too that I want to walk you through.
[00:30:05] Speaker B: So a couple things. One is there's blind spots. There's things we believe that turn out not to be true. And so in our program, for example, we're like helping people understand some things that aren't. They're. They believe that are not true. And once they see, sometimes it's instant. Like as soon as you're aware of something and you've had these moments in your life where you have a, like an insight that changes things, after which the things are not the same and you behave differently. You believe different beliefs precede behaviors, precedes results.
So we have got to start at the level of belief when it comes to a sales team. And we've got to uncover what they believe and help them understand the blind spots where their beliefs are self limiting. And an example of this is the belief some people have about money. There's a lot of these, but we'll just use that one. And I can't remember if we've talked about this on one of your podcasts before, so hopefully it's not repetitive, but every single person on this planet has a money story. We grew, born into a family or a home environment where people talk to
[00:31:00] Speaker A: certain truck driver's daughter from the other side of the railroad.
[00:31:02] Speaker B: Driver's daughter. Got it. That's my, that's my shtick, man. Right? We never had any. We were poor as heck. By the way, I heard all kinds of terrible things about rich people that I believed until I got a little older and then I was like, oh no, that's not actually true at all. It's just what I was told by my poor parents, right? Rich people are a certain way, poor people are a certain way. If you, you know, you have a lot of it, you think something, you have none of it, you think something, you, you hear money doesn't grow on trees. It's rude to talk about money. Money is the root of all evil, right? You hear we. And so we're born into that and then we grow and we have our own experiences. Maybe you lost some money in a stock market plunge or you what, who knows what all of that informs your view of money, your comfort discussing money, what you consider to be a lot of money or not a lot of money. And all of that can affect how you sell. But most of us aren't really aware of that. We have not named our money story as a role in our selling life. And until we do that, we can't be free of it. So I'll always be a truck driver's daughter from the wrong side of the track. Like I can't go rewrite my money story. I can't be, you know, some rich tycoon's, you know, billionaires daughter. I would love that would be great. If I have long lost dad out there somewhere who's a billionaire, please contact me. But so, but I can do things such that that story doesn't limit me. And in my specific case, I'll give you an example like most my dad ever made in his life and in a year was like 32 grand.
And I remember the first time I ever quoted a project for 35 my heart. And I'm a pricing expert, right? I'm supposed to know how to do this stuff really well and I think I do. But the first time the words $35,000 came out of my mouth, all I could think about is my entire family of seven, eight on that amount for a year. And I'm asking for this. And my heart was in my throat, my stomach felt tight. There was all this emotion going on, right? So it comes up. It's natural to feel fear. It's natural for beliefs to be coloring the situation. The key is not to let that stop you from being successful with the habits Attitudes, practices that actually, and tactics that actually get you the deal at the highest price that have you not right before you say 35 grand, rethink it and say 28.
And a million other things we do.
[00:33:11] Speaker A: Well that's what I find so fascinating about what you do because by being a pricing expert you end up being a psychologist.
[00:33:20] Speaker B: And money, you got it. I mean so much.
And that's where it kind of back to the same thing like skills matter and we teach people skills. Selling skills specific to winning more deals at higher prices. But the real obstacles for success aren't skills, it's the mindset that sabotages the skill. So it's very much about self limiting beliefs, habits, attitudes, fears, psychology, stories we tell ourselves. All of those things that have. That's 90% of the problem, frankly.
[00:33:50] Speaker A: It's what I've noticed as well about my clients. Because let's just, let's just take what you're talking about and then zoom all the way out to someone transacting a company.
All of those things. Like I, I never got to this place. I've never been liquid in my life. I mean I like, and, and, and, and, and, and I was like, you know, I was just a technician and my parents were like, like. And all of a sudden I'm gonna have this money and I don't need this much. Any. Yeah, like I, I don't need this much money. I like I'll be financially free on 5 million, but the company's worth 20. And it's like all of that and it's what I've watched what it actually is worth.
Because then they actually have confidence in what they have. Then they can actually negotiate or actually at least be confident. It's back to the. It's not, it's negotiating, right? It's confidence.
How do we negotiate if we don't know what we truly have or what we're willing to give up?
[00:34:51] Speaker B: We need knowledge about the value for sure.
[00:34:54] Speaker A: Knowledge about the value. What was very well said. And it's really interesting too. So I, you know, I only spent 12 years trying to figure out money so I could actually have a good relationship with it. So understood that, that whole dynamic too. And like it was interesting. Alex Herbos, you ever read any of his stuff? Yeah. And there's one thing that really stuck out to me that was it's actually a benefit to charge someone more because even if it's the same amount or same amount of value, the perception in the person to actually do what they say they were gonna do. Will actually provide an ability for them to get to their outcome. And I was literally thinking about the program, the coaching program that I'm in and how much money it was. My God, it's so much money. And I haven't logged in for like six months.
And I was like, but I still am getting my shit done because that, that bill pay that comes every month, the first of every month, I'm like, just keep doing the shit. So it's. It is so such a mindset that is so fascinating.
[00:35:52] Speaker B: There's such. There's so much there that's a very rich set of like, I'm thinking, like, which way do I want to take that?
[00:35:57] Speaker A: First of all, that's why I like
[00:35:58] Speaker B: talking to you, which is like, first of all, like, what is free is abused. Right? So, like, if. If you paid nothing for that coaching program, it's unlikely you would be sitting where you're sitting with the value you got out of it. Because you invested, especially early, a lot in this program because you paid a lot for it, you committed it. So there's a skin in the game aspect of pricing, for sure. And if what is free is abused, it's ignored, it's easy to dismiss. And so, like, one role of higher pricing is it. Especially in a professional services space, this is less true if you're buying some widget. Right. But in a professional services space, pricing is commitment and pricing is a. Is a bellwether or a measure of commitment. The second thing I would say is there's something called the price quality effect. And I feel kind of sure. This probably came up in one of our other episodes, but it's where we infer quality from price. It's expensive, it must be good, it's cheap, it must be garbage. You know, so. So sometimes, especially when they're. When it's difficult to ascertain the value of something fully before you buy it. It's not like a, you know, I can go test drive a Lexus and, you know, like, I. That's a lot easier to surmise.
[00:37:03] Speaker A: It's tangible. You can see it. Yep.
[00:37:05] Speaker B: But a coaching program or like, this is like, I mean, I get what you're telling me the promises of the program are, but I have not been through it. I cannot touch and feel it.
People use price tag as a. As a proxy for quality, as a proxy for value. And if your prices are too low, especially in that professional services space, you're telling people you're not that good.
So there's another reason to nudge that price Tag up. And one thing I will say is, and this is not at the heart of the question you asked, I thought it's where you were going to head. So I'm going to answer a question you did.
[00:37:35] Speaker A: Yeah, I know. I want to hear it.
[00:37:36] Speaker B: Sometimes people are like, we have multiple clients buying the same thing, same product, same service. They're not all charging the same price. And sometimes the people that get the lowest price are the biggest jerks. Like, they're the hardest negotiators. They're the ones that bash us in the most and that gets them the lower price. Our best clients that actually value us more are the ones that pay us more. And that feels unfair. Sometimes it feels like a, like a flip, like a, like a, like an integrity issue for some people. Like, I've gotten that question from a lot of sales teams and what I would say is my belief, and I actually wrote a blog about this because I got this question so often. My belief is that the customers that do not engage in relentless haggling and negotiating with you, and they get to work with you quickly at high value, at a price that reflects it, they do get their premiums worth, Even if they're paying 5% more than that other guy. They didn't waste a bunch of time on some long, complicated RFP or reverse auction or whatever they have.
In my experience, inside most organizations, those companies get the best of the people. They get the best work they get. If you're.
[00:38:43] Speaker A: Here's why, I would terribly.
[00:38:45] Speaker B: Just finish this real quick. If you're getting beat up terribly by a customer on price and they want something that's not their due, you won't give it to them. You'll say, I'm sorry. You know, you have to. You got an awesome customer that pays you fairly and respects you as a partner. And they ask for something that's not part of the contract, your willingness to give them something extra to go to the ends of the earth to make sure they're satisfied are much higher. I believe they get that value.
[00:39:08] Speaker A: I could not agree with you more. And what I was going to say is it's that everyone listening and me and you probably both included, I know me. It's like when someone does that.
Buck off.
Oh, and by the way, if we do something together, the underlying resentment that we started this relationship on is never going away. And I'm going to give you an example because I was having this conversation because if at the end of the day, leadership or relationships is all about collaborative value exchange, I need to make sure that I'm going to occupy someone else's mind. I want them to think good thoughts about me. I mean, it might sound so simple, but when we were doing a remodel, Casey, a couple of years ago, it went just like every other remodel. It was. I'm still married, it was very difficult.
And. And my wife was like, what in the hell? And I was like, price quality or speed, where you can get two. We didn't get the speed aspect. And she's like, well, you can go ahead and do that. You know, tell Paul. And I said, here's the deal. When I'm at. When I'm out of the house and he's in my wall because the dry. The Sheetrock is open and the electrical box is all over, am I going to have him shove a fucking electrical box in there and not cover it up? Because, like, screw Ryan.
Or is he going to be like, ryan's a good person and he's going to take that one extra step to make sure that everything's the right way when no one's looking?
[00:40:39] Speaker B: Everybody ever sold anything, ever.
If you listed their customers in front of them and said, who's a partner on this list? Who's a partner to you? They know who those partners are. And then you say, who are the people? If you could fire them right this second, who would you fire? And they know that, too. So now you've got like a, you know, a red, yellow, green, right? If. If the guy in the green, the partner calls you and says, I'm in a bind, Ryan. I didn't head. And this thing happened.
[00:41:04] Speaker A: What do you need?
[00:41:05] Speaker B: And can you hop on the phone with me this Sunday?
Yeah, I'll figure it out. I gotta. I'll hop off the. You know that before I get on the lift in the afternoon, I'll. I'll have a quick call with you from the ski lodge, because that's a partner. I believe that people who are willing to pay for value get what they pay for. And I. That's always where I just, you know, sort of. I like that a lot of the argument that, that it's unfair somehow that the hagglers get lower price.
[00:41:29] Speaker A: I think that's very well put. And so how do you.
What I, you know, just to summarize the last five, ten minutes is like the, the psychology of this. I could not agree more. And I. That. That make. I mean, I just totally hear you, that that is what you're unpacking.
Like, how do you go about doing that? Because you got like, I'm just picturing like this group of people. You got the top sales reps, the, you know, the underperformers. They're being told to be here. Maybe they're. And you're just like, okay, now we're going to talk about your childhood.
I know you're not doing that, but like, I just.
[00:42:03] Speaker B: Your daddy issues about money.
No.
Anybody listening? That's not what we do. But it's a fair question. I think it's a little, of course, a little hard to summarize something that happens over a 10 week program, including some of the content that we teach them, like how to summarize it here. But I think that there's a few things.
There's something like we are. As much as I'm a pricing geek, I'm a pedagogy geek, and I am really, really geeky about how people learn and then retain information and apply it. And so one of our secrets to success is not just that the content's good, but that the content is taught in a way that actually can be learned at a deep level and turned around and applied. We have accountability built in. So that's all part of it too. But I think that there's very often sales leader.
You cannot imagine how common it is that a CEO or a sales leader says, I've already taught this to my team, meaning I've talked to my team about the power of 1% price. I've taught, I've taught them. Objection. Handling strategy. And that's where it goes back to again. They've dealt with the skill. They've dealt with the skill side. And I say, have you ever, let's say I'm talking to some sales leader, Jim, and Jim says, I taught, I taught my people that. I say, okay, so you're telling me you've, have you ever sat down with somebody and you've coached them through a situation and it's like, what if, what if, you know, you role play, you do whatever. And they're like, great. They go out and they have the meeting and then they come back in and you say, sarah, how'd it go? Oh, it was tough. Well, they, you know. What happened? Well, they said this and then. What'd you say? Well, I said that and then you said this, right? No, but we practice that people will not do what they've been taught to do, what they've practiced, what they're ready to do. If it's rooted exclusively in a skill preparation.
It's got to be deeper than that. And It's a combination of three things. One, illuminating a blind spot. So you know that that thing I just talked about with money, like some people are have not done the work to even think about how their money story affects how they sell. And we teach them how to think about how their money story affects how they sell. And that's just one example, but one we already talked about. So it's eliminate a blind spot. It's create a path for practice and then it's, it's reinforcement and accountability. And a path for practice is. Okay, let's say you have money story X and you want.
You're. You're going to always have that money story again. You're never going to have a different childhood, a different relationship with money. We want to make sure that the relationship you have with money doesn't affect your selling approach. So try these things instead. And then the next time you come into the session with us we're like, okay, Brian, you know last time you were, you said you were going to do xyz. Did you do it? How to go X and Y was great. Loved it. I'm going to keep working on that and building skill with that. Z sucked. You should stop telling people to do that. It doesn't work at all. Oh, okay. Tell me more. Tell me about Z. And you say how you said it. Whatever happened. Right. And that's where sometimes our coach is like, try this instead. But that's kind of that example I gave before. Sometimes it's Jeremy from the team, who's your rock star that always has the highest.
[00:44:58] Speaker A: You're pulling out the best practices within a common language. Yeah, yeah.
[00:45:01] Speaker B: And then it's cross pollinating among the team.
So it's really shining a light on blind spots. Having people identify a path for practice and then reinforcement in a accountability specific to some weird emotions and self limiting beliefs that most people don't know they have.
And money's just one. We have 16 modules and money's one of them.
[00:45:24] Speaker A: Yeah. I am so for everybody listening and I know there's people that have talked to you and worked with you that are listening is I want to unpack how to help you scale your business using the coaching delivery model.
I am talking about because like I think about how important, like I just think about my clients and their sales teams and sales leaders.
It's this situation just doesn't go away because this should be an ongoing conversation. Right. I mean like it's like, okay. I mean I just think about like every single sales organization that I've had exposure to or in. It's like, got it. And then back to the behavior and the beliefs like, okay, this belief showed up on this big deal, or I'm building this proposal for this big deal. And it's just, it's this constant situation that's going to keep rearing its head. Unless there's a, you know, a culture of having this conversation and dialogue, all this, all the time versus just what's the funnel?
[00:46:20] Speaker B: That's right. And that's where like again, sort of part of my pedagogy interest is not just how do you teach something, but how do you keep it alive? And so some tool. What. Which is one of the reasons, or actually the main reason that one element of our program is really tuned to the sales leader themselves.
So because pricing is so fear driven and because it tends to be the area of relatively less comfort and competence than other areas of selling, for most salespeople, it requires an extra level of maintenance and support by a leader. It requires an extra level of reinforcement.
And when I say I want to, I want to substantiate something I said, which is that it tends to be an area of relatively less competence and confidence than other areas of selling. What I mean is, if you ask a hundred people who sell stuff, you say, what do you love about selling? 0 people would tell you, I love when I get to tell them the price tag. It is so fun. That's the funnest part. It's not the funnest part. It's not the funnest part.
[00:47:14] Speaker A: It might only be my dad, like Corey Jansen is the guy deals so much, it's like, can we just get to the close?
[00:47:25] Speaker B: Yeah. So most people love building relationships, solving problems, being the hero, closing the business. Like there's all.
Pricing is the necessary evil. They have to tell the price tag to get the deal, but they don't love it. So even for very successful, accomplished, well trained salespeople, it tends to be an area of a little bit of discomfort, if not a lot.
[00:47:42] Speaker A: Oh yeah. And that's if you're.
[00:47:45] Speaker B: Yeah, right. Well, and many, most salespeople, I would say are. Their compensation directly depends on their ability to close business. So it's not just the discomfort of sitting across from a customer defending price. And the discomfort is there. But at the end of that, a yes or a no means a different amount of money. In my family's bank account. These stakes are high for folks and you have to respect that when you train them. You can't just say do that. That's Another problem with it. Just do this, just do that, just say this. Yeah, but I, the salesperson has to believe in their core being that they can still win the business at the higher price. Which is why we have to deal with belief. We can't deal with skill.
[00:48:24] Speaker A: I would agree. And then don't you also think, because I'm just thinking of my own personal experiences, believe that I can still win it, but also it's okay if I don't because I've got enough of my clarity on my own value, my own financial pipeline, my own situation where. And it is a. It is this weird because I have, I think, I hate the conversation that we're having about like. Like what? Like so much because of my, all of my old money. Because the money was never around. Like we had, you know, a big family business, we had no money for payroll. Like it was just, it was never around.
[00:49:01] Speaker B: Yeah.
[00:49:02] Speaker A: And so I hated it so much that I built systems and machines to say, okay, I've got so much optionality here. We're like. And I think about it and I'm just totally self reflecting out loud. Kasey, is that the extra energy that I spent creating the systems to overcompensate for the situation that you're talking about could have just been better spent. Not all of it. Like, I mean, because not having those systems is not obviously a good thing. But to say, hey, like, I want. It's a better balance of like the confidence and then having that conversation versus having the optionality. Because I do think it's a very healthy situation from my own experience of like there's a good enough funnel and there's a good enough clarity of the, of the path to know the context. If I lose this deal, how much should I care? It's going to be a big deal, but also it's not going to be the end of the world. So hey, kc, this is the price. But my whole life doesn't get completely blown up if this situation does not move forward. Because all of the other best practices I put in are going to overcompensate for that.
[00:50:07] Speaker B: Well, you're 100% right. And I would say if I can bring that to ground. Specific to the issue of pricing is really like the level of desperation you have around any individual sale. And if your level of, if you can't lose the sale, you have no power.
[00:50:20] Speaker A: Right?
[00:50:21] Speaker B: Right. You, you can say any number you want, but at the end of the day, you will do it for nothing. You'll do it for Dirk. Because you have no power. So, like, this is. I always say, dogs and prospects can smell fear, right? So, like, if you come in there, you know, with that, you know, desperation breath, because, oh, my gosh, I have to get this sale, like, or else that. That permeates the whole conversation. We make pricing weird. It gets weird. They. Everybody can smell that. Everybody can sense that your customers are smart enough to pounce on that. So that desperation eliminates your pricing power faster than anything. So it's funny, like, you. I'm hearing you say it one way, which is, if I know I have other ways I can make money, I'm not as desperate for this one, and it allows me to stand more confidently in the conversation. I would say if you aren't standing confidently in the conversation, you've killed your pricing power.
[00:51:12] Speaker A: You've killed 100%. Agree. And that goes back to that Alex Hormozi comment that I was making. We're, like, believing the fact that, like, this is what it is. Because, like, who doesn't want to work with someone that, like. I mean, you've always radiated that confidence, Casey, because it's like, I know my. If you want to pay for me, I will. I will show up. But, like, if you don't, and then it just puts the boundaries in there. It's like, I want someone. I mean, who doesn't want that rock for a vendor, whatever. I mean, all the way down to copiers or all the way up to, like, someone doing an ERP implementation. It's like, I want someone with that kind of confidence. I don't want to. I don't want a noodle. Right?
[00:51:49] Speaker B: This brings us to something we haven't talked about, at least not on this call very much, which is what you're just speaking to, and we mentioned before, is knowledge of your value, clear understanding of who values you for what and how much. Right? Like, you have to understand why your solution is the best fit for this customer at this price tag. You have to know what your value is. But that is only half, and so don't give that short shrift. For sure. Do a better job of understanding the value of your product or service to your customer. And not in your terms. Not because this valve has seven pressure settings, but what are those seven pressure settings do for the customer? Well, it helps you reduce waste by 14% in manufacturing on line seven, which is what, $180,000 this quarter. Now you're talking in language they care about, right? So. So, but that gets to the thing. It's not just knowing it, it's communicating it. You can have the very best product or service on the planet, but if the customer does not understand that in their language, then you're going to struggle to be paid what you're worth. The opening of my TED Talk, I say this. No one will ever pay you what you're worth. They'll only ever pay you what they think you're worth. And you control their thinking. And so the messaging, how we talk about, communicate and defend pricing and value is equally important to actually having a great product or service and understanding the value yourself. You have to be able to tell it. Have to. That's what do you, that's what so many people.
[00:53:10] Speaker A: I 100 agree. And that's where like, you know, the like, philosophies like challenger sale and stuff like that, I think come into play. Like, are there things that you do to help people figure that out or is it like, what are some tactical ways that you've.
[00:53:23] Speaker B: So there's a, so many. But I would say one thing. Here's, here's a one simple example. Very often people tell their value proposition in their own language. And just that example I gave seven pressure settings, right? They think it's in that customer's language. And you say, well, why does the customer care about seven pressure settings? Well, because they have.
[00:53:39] Speaker A: Because it's not six, it's seven.
[00:53:41] Speaker B: Right? Yes. Yes, because now we can tune it exactly to the level they need. Okay, why do they care about tuning it to the level they need? Because you keep on asking them, it's like, well, then they can save $180,000 a quarter. Well, why do they care about saving $180,000 a quarter? What else would they do with that money? Like, the key is to drive further and further and further. We get out of our house, we walk across the street to the customer's house, we walk up the steps, we go in the front door, but we don't stop in the foyer. We're like, we're going to the bedroom, we're going to the underwear drawer. Like, we're getting personal with the customer's deep concern for why this matters to them. And I'm not just talking about money and time and all that kind of stuff. It's like the emotions that go with that.
Like, if you had 180 jobs to be done, that's, you know, ex ftes this year, can you think of anybody you'd love to hire? If you had the ability to hire four FTs, what would you have? People aren't Talking about that when they're talking about their pressure settings of their pump. But they dang well should be because now we're talking about something the customer actually cares about.
[00:54:38] Speaker A: If you pull that thread long enough, it goes to independence, by the way.
[00:54:41] Speaker B: Yeah, exactly.
[00:54:42] Speaker A: Which is time, cash flow, wealth.
[00:54:43] Speaker B: I always. My advice is. And we talk about this in one of our modules where we talk, we teach this framework called the Fab Feature Advantage Benefit Framework. Channel your inner toddler. You have kids, Ryan. I have kids. We both know what it's like to be around a toddler. And a toddler's favorite question is why? Why? Why? So I, however, whatever any of our clients tell our coaches, like, this is why this matters. Well, why does that matter? Like, pull the thread until you're down to like the cellular level of the universe or something. Like there's no further deconstruction or abstraction possible. Table. And then you maybe have gone far enough because most. So that's one example of how do we teach people to do this? They've never gone far enough. They've never gotten personal enough with why the customer should care.
[00:55:26] Speaker A: It's really interesting that. Yeah, I agree with you. And I have said I don't know how many different times with lots of different service providers that I've worked with or companies like. Because, like company, like all my clients, people I've worked with, all sell to different companies. Right. And so.
And people say, well, you know, as. As they've tried to bark upon the. The challenge that you're talking about. I'm like, the only thing that matters is valuation.
That's like at the end of the day and the day. What's the point? Well, more cash flow. Cash flow equals value. And, and time is money. And like, next thing you've collapsed the whole, the whole thing. But it's. But then trying to understand.
Great. That might be the board's conversation, but who's in front of me? Well, it's someone looking for a job and a promotion. So you like within the. So there's, there's nuances to that. But I think it's super fascinating that if you ever. You ever read the book Jobs to be Done or.
[00:56:18] Speaker B: No, but I'm familiar with the framework.
[00:56:19] Speaker A: Yeah. I mean that's like, it's the whole. For anybody listening in. Bob. Bob Mesta, right? Was it Bob or Bob Buford? Something. Anyways, I love that framework of jobs being like, what's this actually trying to do?
[00:56:30] Speaker B: There's an interesting intersection between your work and mine there because we're both in the value game. Right? And, and I've heard you say this on this podcast and in our personal conversations, like, what do you. What do you want to. What do you want to.
[00:56:40] Speaker A: What's the point?
[00:56:41] Speaker B: Like, what's the point? What are you after? What do you. When somebody's like, I want to exit the business so that you can do what? Right. Like, that's a classic example of people don't ask themselves the question deep enough. They ask it to a certain point and then it's like, okay, so now you have 10 million bucks and all free time. What are you going to do with your 10 million bucks? What are you going to do with your free time? What do you. Until we. And so it's. You're doing it with entrepreneurs around the owner framework. We are doing it with sales teams around community.
[00:57:07] Speaker A: It's a subset of, like, at the
[00:57:08] Speaker B: end of the day, it's never going to be compelling. If we stop halfway through that question, it's just not going to be compelling or we're going to make a mistake.
[00:57:18] Speaker A: Here's where I want to frame up, and this is where we're kind of moving more towards. I like a little collaborative discussion here because I, I see your work being an instrumental component of the operating system I put together on the ownership side because.
And it gets mechanical. So I'll walk you through the mechanics of why I think it's so important. And then, like, I don't know, this is why I think we should continue to figure out how to collaborate. Because, Casey, the, The problem I see coming down the pipeline that has been kind of dormant for the last year or two, which I think with the war that started, people, I feel right now, for whatever it's worth, and I hope I'm overblowing this, but I don't think I am. And that's where, like, you know, I. I'm thinking out loud, so you're to give me a handicap here is I feel like right now we're in the late February of 2020, and no one has a clue what's coming.
The artery, the main artery of the entire global supply chain has been shut down for three weeks now, and it ain't coming back. It's been blown up on both sides and fertilizer and helium and oil, cheap oil, is gone. I mean, like, it is. There's no way to win at this point. And no matter what direction the US Dollar, treasury market is completely.
What does that mean? Without trying to overdo this, and I hope I'm Wrong, right? Like this is not me. Like, like feeding on this. I like because I really truly like, I hope it's like, oh my God, like never needed that insurance policy. Like I would be happy to be wrong. What I think that means, Casey, is we are coming into an era of high printing.
There's no way mathematically out of that because you're not going to let the $40 trillion in debt that we have now just fall. Like they're not going to let the bond market fall. So what that means is there's going to be constant whack. A mole of printing to whatever is redlining. The private credit market right now is completely fucked. And so it's just going to be this perpetual, perpetual plugging of holes which will have a long term inflationary effect. It's the only way out of this. What does that mean? And why am I talking about this as it relates to what you're doing?
Kim Clark and I are working actively together as well as in like her dad Allen, who has been Talking about the2030s for a long time. And I think we now have a more clear picture of how that's all going to unfold. And what I have said is that okay, like we're building Noah's ark for people.
Because the thing about what a company is is when I, and if you can picture into that three statement marketing, like okay, you got this five year forecast with the workshop I'm doing next week. It's like, okay, well I can look at my revenue, my mar. And my, my revenue, my cost of goods, my sgna. I can see the cash flow. I can see the whole picture once I can see the whole picture. And I'm looking through like the, the future is like a telescope. The only way to deal with this cluster coming is to look at my revenue and manage my gross margins. And okay, another wave of inflation. And then it's like this wave, it's like, okay, if I need to maintain 42% margins, I cannot stop.
Like it can't be 35 because then the whole thing breaks. So like what you're talking about has like, I see like it is more paramount than ever. Like having a strategic trend, strategic pricing conversation of guess what, another 4% raise or in our prices. By the way it now is, now it's eight.
And because we're, it either came on the cost of goods side or it came from the payroll side. But it's coming.
[01:00:44] Speaker B: Yeah.
[01:00:45] Speaker A: And so like then it's like also looking at our clients and the industries and all These different things. Saying, like, this is the way to win. Casey, is like, look at your revenue and your pricing and look at your gross margins and we have to hold the line, otherwise the company will be swallowed up by what's going on. And that's my little monologue. And I really hope to God I'm wrong, but, like, why not do that anyways?
[01:01:05] Speaker B: Well, that's the thing. And I think, like, you didn't mention AI but obviously you and I before on this, we were talking about AI, but that, like, I, I talk about how AI is, I think, going to change the value story for so many companies, especially in the knowledge space. And I've been accused of being hyperbolic about this, that, like, it's not going to change that much or that fast. And I'm like, look, maybe I, I'd love to be wrong that it isn't going to hollow out the value of all these professional services firms the way
[01:01:32] Speaker A: I think it's going to allow anybody.
[01:01:33] Speaker B: I don't think that I'm wrong. I may be wrong to a matter of degree or timing. I don't think I am. I would rather operate paranoid on this front than less.
[01:01:43] Speaker A: Because if you know what Ray Dalio's quotas. And I love this because you and I are both getting told the same thing, which is like, it's too much.
[01:01:48] Speaker B: And it's like you're, you're overreact. You're. You think it's a bigger thing than it is kind of thing. Yeah.
[01:01:53] Speaker A: Ray says if you're worrying, you don't need to worry. If you're not worrying, you should worry.
[01:01:56] Speaker B: That's exactly right. So I'm preparing. It's like, you know, maybe it's because I was a Girl Scout, maybe it's because I grew up poor, maybe it's just my personality. But I'm preparing for the worst and hoping for the best, which is what I've always done. And I'm preparing that all these things are going to hit at once. And I think about.
I think about what happened in Covid and the supply chains got blown up and the companies that survived that, what preparations they had made for an unforeseen change, but also how quickly they reacted when the situation started to change. They didn't wait and see. They didn't wait and, you know, six months later, they were taking pricing actions or cost cutting actions, or they were taking, like, days after stuff started shutting down or minutes after stuff started shutting down. And I think, like, we're, we're due and for the reasons you said. Reasons. I said reasons. Neither one of us even know. Today, the nature of our world feels more volatile than ever before.
[01:02:48] Speaker A: The reset. Because the reset is coming and like
[01:02:50] Speaker B: whatever that long, you know, three year pick, you know, strategic plan and five year. I don't think there's no purpose in long term planning. I think there is, but I just think like people are giving generally too much weight to long term planning and not enough weight to not short term planning but like investing in their ability to react quickly to change.
[01:03:09] Speaker A: When I think, I think it, both of those are the way to go about it. Because like so in the workshop that I'm doing, by the time this comes out, it'll be already done. I don't know. It doesn't matter. So I did a workshop or I am doing a workshop. I don't know.
[01:03:22] Speaker B: It either just happened or it's just about depending on my.
[01:03:24] Speaker A: Or you're in the middle of it.
[01:03:25] Speaker B: Yeah.
[01:03:26] Speaker A: Is the, the five year forecast is where a lot of my clients right because they got the foundation and we like the five year forecast, in my words is it's the mathematical connection of all of your statement, three statements tied to your valuation target what that allows us to do. And I did this podcast like a year or so so ago Kasey of you know, the whole Mike Tyson, everybody, everybody's got a plan until they get punched in the face. I titled the podcast Everyone gets punched in the Face. So you might as well have a plan.
[01:03:53] Speaker B: Right.
[01:03:53] Speaker A: And it is this five year forecast which is, you know, I had someone that's a client of mine, he's a sailor and he and I, I get the metaphor. Same thing with flying. Like the destination is very clear. We're going to have all this turbulence along the way which will help us course correct to get there. And that's why like that I think the five year plan should bring context to we have to have 45% margins no matter what for this entire situation to work. So what we're doing going to do is have an ongoing conversation about hey guess what the. I mean I remember like yesterday I was sitting on a call with a client who he sold the business. He's got to be pretty happy about is he wrapped fertilizer with nanotechnology. And so fertilizer is like totally screwed because it all comes through the straight. So but we, I was sitting on call with him. He's like, it was, it was, I think it was June of 2020. He's like, Ryan was a mayday call it was June 2020. Like our shipping containers went from 2,500 to $20,000. So had he not got on that call and us readjust the pricing because he had all this shit together, he, it would have cost him three and a half million dollars that month in working capital. Like it would have been gone. Like his money would have been gone. So the golf ball went down the garden hose. But his long term plan and his ability to see the numbers in real time allowed him to jump on a call quickly do that price adjustment. And now I think about like really a specific example with your situ, your skill set is mechanically we knew what to do hold the, hold the market.
[01:05:20] Speaker B: How do you tell the team to go have these conversations with their customers?
[01:05:23] Speaker A: We need some help.
[01:05:24] Speaker B: Like right, right. Because guess what, they're they, they have fluency and comfort with $2,000. They do not have fluency and comfort with 20,000.
[01:05:32] Speaker A: I know.
[01:05:33] Speaker B: And how does that impact their ability to actually go out and still win business? So we're in violent agreement that short range quick reaction by looking out at the horizon to that eventual destination for short tack adjustments. Absolutely, yes. I want to not exactly challenge something you said, but introduce another way of thinking about it. Like you're, you've mentioned a couple times this wave of like if we're not tracking revenue and gross margin based in cost with what's happening to us, then we're underwater all of a sudden. Right. So we've got to keep up. Meaning if we suddenly have a new 17% tier, if we need to take quick pricing action so we don't let that eat into our profit. 100% agree.
My only whatever you want to pros or challenges to anybody listening is like there's a, there's plenty of businesses have margin targets. My problem with margin targets is that they, they, they often understate the opportunity. In other words, 45% might be right, but it might be 48. 45% might have been right six months ago. It might be 52. Like in other words, all of that approach is still cost plus pricing. Now it's a proxy for value because they value us at 48 or 45 or 52. But it's still cost plus pricing. And cost plus pricing is the wrong.
It's the tail wagging the dog. Wagging the tail, wagging the dog. I think start with value and back up from there. Now I'm agreeing with you. At the end of the day, if we're not making enough money at what our customers will value us at Then we've got to change mix. We've got to change product. We've got to.
[01:07:01] Speaker A: Let's assume.
And then we locked it in.
[01:07:05] Speaker B: But I always, always, always want people to think of. Start thinking about value first and driving pricing from value. Because how would you got to be a 45? It's like, well why not a 55? Because some businesses where. Businesses we're working with right now who have an 85% gross margin.
[01:07:21] Speaker A: Yeah. And I am too actually. And then I'm also working with a company.
It's really interesting.
I apologize if you're listening and you know who you are.
[01:07:30] Speaker B: Yeah. You're not saying their name. So we're going to be.
[01:07:31] Speaker A: Yeah. No, no, it. Cause like just, it just is just insult injury. Like how much work we have to do to squeeze out 6% is mind boggling. And then someone else who has like significantly less revenue is just a. They're printing money.
And it's like look at both of those things and how much work effort is different.
[01:07:52] Speaker B: It's not just how much work, it's also. It's back to that thing we talked about. Like because I do, you know it boost we did. We've done a ton of work in the office furniture, space, commercial interiors. This is an industry where the net price, the net profit is in this, in your net margin is in the like 2 to 4% range. Oh my goodness me. And we're in a dang interest bearing checking account. Like and so it's, it's a, it's tons of work for very little money. But it also.
These sales folks are abused on the regular by the worst customers alive. They're just horrendous. So you're printing money, you got the guy that's 6%. Their customers are not the same at all.
It's not just about working hard for not very much money. It's about getting abused in the process.
[01:08:41] Speaker A: Well said. But going back to your point and, and I. And it's very well taken of having the.
So let me see. I'm trying to find the word. So let's say right now that a comp. Like a company or client of mine is feeling good about where they're at. And I, I don't know, you know, like they'd have to go through those exercises which I know is less about your strategy and offering but like they went through, they're going through Kim's like conversion rates and they're a B test. And like. Okay. I feel like we're pushing the. We're Pushing the limit here and it's 45.
What would be your practical recommendation about how to constantly be putting in discipline to test that 45? So for example, before you have answers, right now with the ownership operating system, we have monthly ownership meetings. We have quarterly board meetings. Those sit on top of EOS traction meetings. So a lot of my clients run an eos. These are just higher level, boardroom level meetings. Would you say like quarterly? You're looking at stuff annually, monthly. Like what's your thought?
[01:09:46] Speaker B: It's a great question. I think it depends on a few factors. So if you are a, and I use some examples to help illustrate this. If you're a digital marketing agency that closes 20 big deals a year and you get five at bats a month, right? Like you don't need to have a pricing strategy meeting every month. And look, unless something catastrophic happens, volume has a lot to do with big external factor. You, you need to, you need to recruit, but just kind of everyday life, you don't need to meet every month. You may not even need to meet every quarter. You should definitely meet every year. I, I am a big fan, but, but if, on the other hand, if you are a, a steel job shop, custom, you know, custom job shop, and the price is deals changing, literally spot buys every single day. Like you meet once a quarter about pricing, you're in deep trouble, right? Some of this is the number of transactions, the number of customers, the number of at bats, how quickly your inputs change, cost, how quickly your, your competition and the external environment changes. All that factors in. I would say a good default is at least quarterly to at least have a quick check in. And it may be as quick as, like nothing's changed in our win rate, no new competitors in the marketplace, nothing crazy economically. That's changing factors like are we still okay with our, you know, the path we're on. It's essentially like sort of picking your heads up out of the weeds and looking around and making sure you're still pointing at that spot. I'm mixing metaphors now because if I'm a sailor, there's no weeds. But you're still pointing at that point on the horizon, right? Like you need to, you need to stop just looking at the operational attack you're on and taking a look out at the horizon, making sure. So at least quarterly. A quick check in.
[01:11:24] Speaker A: Like having a quarterly pricing checklist? Yeah, something like that.
[01:11:27] Speaker B: Yeah. I always. So a lot of times I'll talk about like have a strategic pricing meeting once a quarter and then people inevitably say what's a strategic pricing meeting or what do we talk about? And I have created a little handout for this, which I can send you
[01:11:39] Speaker A: just the questions that you're talking about. I mean, like, if it's. Yeah, I mean, it's.
[01:11:43] Speaker B: But it. It. I. I don't mean to be tongue in cheek when I say it almost doesn't matter. And by that I mean if you and your senior leadership lock yourselves in a room for one hour and say, like, what's happening with pricing? And you in one of the. I just wrote a blog about this a couple weeks ago. You could assign people different positions, like, like a debate club. You assign this guy, our prices are too low and it's time to raise prices. You sign that guy, the prices are too high, and we've got to, you know, be really, really sharp with our pencil. And each of them build a case and they come in and do a debate club in front of you. Right. Like I'm being kind of.
[01:12:14] Speaker A: Yeah, no, I like it.
[01:12:15] Speaker B: The key is sort of a devil's advocate approach. Like, let's really sell ourselves on why we can't possibly charge anymore. Let's sell ourselves on why we can't possibly charge any less.
And then, you know that even with no data and even with no, you know, checklist, have a. Have a rigorous discussion and debate inside your senior leadership team about pricing. And I would be shocked if meaningful and profitable decisions don't come out of that.
[01:12:42] Speaker A: And if we really wanted to get geeky, I would say transcribe that, have marketing in on that, and then have all of that turned into marketing content so you could actually have all your value props.
[01:12:52] Speaker B: Yeah. If Claude's listening in, it'll tell you what to do next with your. With your messaging. Yeah.
[01:12:56] Speaker A: Yeah, that's. I like that a lot. This is so good. We covered a lot of grown. Again, I'm trying to think if there's anything else that I. We haven't missed or we haven't covered and we've missed it. What's your hope for.
For people? Like, we're like, as you're.
As, you know, as we talked about, there's a lot of volatility that I think the volatility is increasing for whatever, whatever variable that you're choosing economically.
[01:13:21] Speaker B: Like, there isn't a place in our lives that aren't under dramatic change.
[01:13:26] Speaker A: What is your hope for people and the impact that you're trying to make?
[01:13:31] Speaker B: Well, I mean, if I can sort of, you know, irrespective of the current times, my Hope and my commitment is that people who are generating excellence are paid well for their excellence.
Nobody should accept less than they're worth. And all of our work is designed and you know our clients are the same as your clients. They're small and medium sized privately held companies, mostly founder led. So this is someone who hung themselves out and you know, to dry a little bit. They have chased payroll, have written checks to their own business to cover like they do. They've been through everything to build this business. I want to see that effort, that risk, that gumption, that expertise be rewarded. That's the, that's the so what of our business as it relates to the right now, the right nowness. All the change, all the volatility you're describing is that people don't freeze up, you know, don't freeze up and wait C mode. And we're seeing way too much of that. I would say if you're sitting there thinking to yourself my sales, my team could use some pricing training. Call us if you're thinking I need to invest in such and such AI capability in the business. Do it like whatever you're thinking can help your business jump on it. Because wait and see.
The wait and see companies aren't going to be here in five years. Many of them won't be here in a year.
[01:14:50] Speaker A: I think it's really good advice. I mean it's, I think it's going to take a lot of energy and it's, it but it's going to be the adaptability.
The people that are adaptable are going to win and which makes me really excited. I mean like I, I, I constantly have to think about when I'm talking to Alan Bolio and Kim's dad and like okay, the whole, he wrote the book Prosperity in the Age of Decline.
[01:15:10] Speaker B: Yeah.
[01:15:11] Speaker A: I said to one of my clients like if we need to get a therapist for you because you're so fucking successful while everybody else is not, I'll bake that into my price.
I'll gladly support the therapist.
[01:15:25] Speaker B: Yeah. If you've got guilt you have to deal with over how rich you are, we'll figure that out.
[01:15:29] Speaker A: Exactly. I'll cover the therapist under my, under my program as a way of just that's the byproduct is we have to get you a therapist because it's so good.
Boost pricing, reach out to you where else? What's that? What would be the first.
But what's the best way to explore engaging with you guys? I heard you negotiate on price.
[01:15:47] Speaker B: Hey, do we do not negotiate on price. It's a professional. You know, I mean, obviously like we teach it right, but it's also like we believe deeply and it's proven and money back guaranteed to work. And so we're unapologetic about the value just as we are unapologetic about the price. And the value is typically 10x to 100x the price. So if you want to hand us a much smaller check and get a 10x or 100x check and return, return, you know, reach out info pricing.com or you can reach my partner
[email protected] directly and set a sales meeting with us. But anybody who's maybe not ready to jump all that way and just want to learn more about what we do or we have a ton of free resources. I write a lot. We have a free newsletter that we share a lot of helpful pricing content, videos on YouTube, stuff on LinkedIn. You can find a bunch of free stuff. And then I'll also just mention Fearless Pricing is the book. I mentioned that earlier and kaseybrown.com right? Yeah. Yes. And so yes, you can see you can find the
[email protected] it's also listed on boostpricing.com Kaseybrown.com is where all my, my speaker, my thought leadership website where, where the book is this anybody who is ever interested in a keynote about this stuff that makes people piles of money, I love to be on stage and tell stories and make people money.
[01:16:59] Speaker A: So yeah, put your TEDx in there too.
[01:17:01] Speaker B: Yeah. Oh yeah, TEDx. There's a TEDx talk. Sure. All of that you can
[email protected] and boost price. Everything we sell, everything we give, everything that's free, everything that's paid. You can find out about it on those sites.
[01:17:13] Speaker A: And I'm excited to have you back into the group session.
[01:17:16] Speaker B: Looking forward to it.
