Para reflexão

"As the world becomes increasingly price-competitive, successful companies will need to become ever more vigilant in targeting markets for profitability, not just volume growth.
...
When working with the client, keep it simple. He said, “Don’t waste too much time overcomplicating the topic of customer value. Just ask the cli- ent this: ‘Do you know how much it costs your customers not to be doing business with you’?”

Trechos retirados de "Integrating Marketing and Operational Choices for Profit Growth" de Thomas Nagle e Lisa Thompson.

"One must first understand the main source(s) of value"

"One must first understand the main source(s) of value; only then is it possible to have the real value reflected in the price. This statement does not imply that the general model of value leads directly to a pricing decision or that there is some formulaic relationship between value and price, only that once one truly understands the value provided, the pricing potential becomes much more apparent."

Trecho retirado de "Understanding Value Beyond Mere Metrics" de E. M. (Mick) Kolassa

"value, like price, should be deduced, and not calculated" (parte II)

Parte I.

"The most important questions the pricer can ask are, “What problem does my product solve, and who owns that problem?” Answering those questions is the first step in understanding and clarifying value. For any new product or service, the value will be determined in the context of current options. I argue that value is comprised of multiple components, including both negative aspects of value (such as risk in use) and positive aspects (such as the incremental benefits of the product) that drive the value of the product.
...

...
Put another way, value is determined by the interaction of the utility of the product (as defined in the model) moderated by the risk (also defined in the model) in using it; ... The implications of this relationship are fairly straightforward: increasing the utility of a product or decreasing the risk in its use can both result in increased value, which can translate into either a higher price or an enhanced value proposition in which the buyer understands that the price paid is far below the value received.
...
The positive aspects (or sources) of value begin with a determination of the need for the product or service, which is driven, or moderated, by the criticality of the situation in which it is needed or used and the number and quality of alternatives that are available.
Criticality is the urgency of the need for the outcomes of the use of the product. This urgency is not strictly temporal but also captures the likelihood and severity of the negative consequences if the product is not used or acquired. Higher levels of criticality will positively affect the level of need. Criticality is moderated by a number of alternatives in that the level of criticality of the situation is a key driver of value, while the availability of alternatives can mitigate the level of need."

Trechos retirados de "Understanding Value Beyond Mere Metrics" de E. M. (Mick) Kolassa

Para reflexão

“The purpose of price is not to recover cost, but to capture the value of the “product” in the mind of the customer” (Dan Neimer)

"selling projects rather than products" (parte III)

Parte I e parte II.

Como são as coisas... não há coincidências, todos os acasos são significativos.

Ontem à tarde, estive numa reunião de exploração estratégica numa empresa num sector tradicional da economia.

Empresa desenvolveu um produto a pedido dum cliente-fabricante. Entretanto, esse cliente chegou junto da marca e resolveu declinar o convite para produzir.

Marca, com produto na gama média-alta, resolveu avançar com a produção em Itália. Empresa resolveu fazer algo que nunca tinha feito antes, entrou em contacto com a marca, apresentou-se e ofereceu-se para continuar a fornecer a produção.

A internet ajudou-os a resolver o problema da distância (engraçado que antes da reunião ouvi este texto, "The Problem For Small-Town Banks: Technology Has Redefined Community" e, durante a reunião recordei "O fim da barreira geográfica")

Ou seja, a empresa está a considerar entrar no mundo da venda de projectos, em vez da venda de produtos, ou de soluções.

Também ando a pensar na relação da venda de projectos com o último nível desta cadeia:

"selling projects rather than products" (parte II)

Na Parte I Antonio Nieto-Rodriguez deu o exemplo da Philips sobre como deixar de vender produtos e passar a vender projectos. Fez-me lembrar o fabuloso livro de Ramirez & Manervik e os seus ecossistemas da procura:

E a propósito de ecossistemas da procura, a minha primeira experiência, em 2004, de transformar a venda de produtos em projectos para "Subir na escala de valor". O mesmo "truque" usado pela Jofebar:

• Um sistema de gestão que começa no negócio (Novembro de 2015)
• A mensagem de quem sabe quem são os seus alvos (Setembro de 2016)
• Não esquecer (Dezembro de 2016)

Interessante que o sector da pedra tenha apostado na mesma estratégia (Portugal exportou mais 10,5% de pedra natural em 2018):

"Há uma inversão da exportação do material em bruto para uma tendência para o material transformado”
...
“Há quatro anos tínhamos a China como principal mercado”, pelo que “o setor exportava sobretudo bloco”. Agora, é França o principal mercado, com um crescimento superior a 5%, sendo que este país “consome sobretudo produto acabado”.
...
As associadas da Assimagra estão, neste contexto, “a fornecer sobretudo obra à medida”, aumentando o valor acrescentado face à venda mais indiferenciada de blocos de pedra. “Hoje o setor consegue estar nos principais projetos mundiais, disputá-los e vencê-los”, adiantou Miguel Goulão."

E volto a  "Selling Products Is Good. Selling Projects Can Be Even Better": 

"Clearly, the shift to becoming a project-driven organization and selling projects rather than products or services presents sizeable challenges to corporations and their business models. Working in projects throughout my career, I have identified these as the important ones:
.
Revenue streams. Revenues will be generated progressively over long periods of time, instead of right after the sale of a product. This will affect the way revenues are recognized, as well as accounting policies and the overall company valuation.
.
Pricing model. New pricing models will need to be developed. It is easier to price a product, for which most of the fixed and variable costs are known, than a project, which is influenced by many external factors.
.
Quality control. Delivering quality products will not be enough to meet customer expectations. Implementation and post-implementation services will also have to be of the highest possible quality to ensure that clients continue to buy projects.
.
Branding and marketing. Traditional marketing has focused on short-term immediate benefits. Marketing teams will need to promote the long-term benefits of the projects sold by the organization.[Moi ici: Estou constantemente a dizer isto às empresas, fujam do preço da troca, calculem o custo do ciclo de vida do produto/serviço. Ajudem "get the customer to appreciate a bigger picture"]
.
Sales force. The buyer of the project will no longer be the procurement department of an organization. Sales will be pitched to leaders of the business, so the sales force and sales skills will have to be upgraded with strategy and project management competencies.
.
Stop for a moment and consider what your organization is selling. Is it a project? Increasingly, the answer is clear and affirmative. If not, beware, your products might soon become part of a project sold by someone else."

É preciso coragem

"This product is way out of my budget" a customer recently emailed me. I sighed and reminded myself that not everyone is now always right customer for my store."

É preciso coragem para ser firme.

Trecho retirado de "Here's Why You Should Stick To Your Prices--Even If Your Customers Hate Them"

"usando o que produzimos como um input para o seu processamento"

O exemplo que se segue pode servir de reflexão aos que respondem com o seu produto ou serviço à pergunta sobre qual é o seu negócio. Os clientes não compram o que produzimos, os clientes procuram o que vão conseguir viver, experienciar, usando o que produzimos como um input para o seu processamento. Diferentes processamentos, diferentes contextos:

"You’re either pregnant or you’re not. And the market for pregnancy testing kits would appear to be similarly dichotomous: you either need a pregnancy test kit, or you don’t. If you do, you buy one and it helps you answer the first question in the affirmative or in the negative.
.
So you’d think there’s not much to the market – not much market segmentation potential.
...
“why do consumers buy pregnancy kits?”
.
The answer was surprisingly far from obvious.
.
It revealed two very different kinds of buyer of pregnancy kits: those who hopefully await a positive result, and those who anxiously wish for a negative one.
.
These two segments deserved to be served differently. So the product was launched differently for the two types of consumer: one for “the hopefuls” and another for “the fearfuls,” differentiated in name, packaging, pricing and in-store placement.
.
For the fearfuls the product was named “RapidVue,” it came in a plain white clinical pack design, priced at $6.99 and displayed near the condoms in the contraception aisle.
.
For the hopefuls, on the other hand, the company created a pretty pink box labeled “Babystart,” featuring a gurgling, rosy-cheeked infant, priced 50% higher at $9.99 and sold near the ovulation predictor kits.
.
It was a dramatically successful strategy for Quidel. A new way of segmenting the market was born."

Recordar:

• Preço e JTBD são contextuais (Novembro 2016)
• Conservas e pricing (Janeiro de 2014)

Trechos retirados de "Segmenting The Market For Power And Profit"

"Price is not"

"Luxury goods markets are extraordinarily attractive because they combine high growth and high profitability.
...
On the other hand, loss of exclusivity poses a threat. Luxury goods are by their very nature elitist. Exclusivity plays a key role. Growth strategies and expansion plans which dilute a brand’s exclusivity must be avoided. ... Watering down the brand is extremely dangerous for luxury products. The expansion may pay off in the short run, but long term it can lead to the trivialization of the brand.
...
premium products are by no means limited to prestigious consumer products. There are also many premium offerings in B2B industries.
...
For a premium price position, the quality, competence, or uniqueness of the supplier is at the forefront of the customer’s interest. Price is not. The cost differences between competing offers are typically smaller than the differences in the perceived value and the resulting willingness to pay. The latter is systematically exploited through the premium price.
...
the competitive advantage derived from any given innovation is only temporary, so premium suppliers face constant pressure to innovate. Some brands stress this emphasis on constant innovation in their advertising claim.
...
innovation isn’t the only successful premium strategy—a company can also focus on remaining true to what has worked well.
...
Premium products also require a level of service which is both comprehensive and of a similar quality as the product itself. To deliver this, companies require highly qualified “employees both internally and at its sales and distribution partners.
.
The comparatively high price is an integral feature of a premium product. The price cannot become a ping-pong ball for discount actions, special offers, or similar price-driven measures. Premium suppliers must place a high value on continuity, price discipline, and price maintenance. Wendelin Wiedeking, the former CEO of Porsche, explains: “Our policy is to keep our prices stable, in order to protect our brand and avoid a decline in the residual value for used Porsches. If demand falls, we cut our production, not our prices.” The current marketing decision-makers at Porsche, Bernhard Meier and Kjell Gruner, have a clear philosophy on this point: “We always want to sell one vehicle fewer than the market can absorb, in order to remain true to our brand promise of high exclusivity and high retained value. We are not volume driven, but rather obligated to an enduring business”.
.
This policy works well for several reasons:
Sharp variations in price are not compatible with the sustained high-value image of a premium product.
Temporary price reductions will frustrate or anger customers who purchased the product at its normal (high) price.
For durable goods, price actions can jeopardize prices for used products. The residual value is an important purchase criterion for these kinds of products. A decline in residual value can diminish willingness to pay for new products.”

Trechos retirados de  “Price Management” de Hermann Simon.

"companies should design a product around a price"

“We are asked again and again what the most important aspect of price management is. We always give the same answer: “value-to-customer. ” The price a customer is willing to pay, and thus the price the seller can achieve, is always a reflection of the customer’s perceived value of the product or service. If customers place a higher value on the product, then they are prepared to pay more. If the perceived value is lower than that of a competing product, they will only buy the product if the price is also lower (relative to the competitive product).
...
As a guideline for addressing price problems, this view suggests that we should start by looking at value through the eyes of the customer, giving rise to three important tasks for the supplier or seller:
Create value : Innovation, product quality, the standards and nature of a product’s materials and components, design, etc., all contribute to value creation. The choice of customer segments also influences value creation, because customers have different requirements and different perceptions.
Communicate value : Statements about the product, its position, and last but not least about its brand all communicate value. Value communication includes packaging, product presentation, and placement at shelf or online.
Retain value : The degree to which a product retains its value will influence first-time willingness to pay for consumer durables. For luxury goods and automobiles, value retention—resale value—can even constitute a deciding factor for initial willingness to pay.
Only when a seller has clarity on the value of the product or service can the seller approach the specifics of price setting.
...
companies should design a product around a price. In other words, they should start with the price range and then begin with research and development, designing a product with the appropriate features and quality for that price range.”

Trecho retirado de “Price Management” de Hermann Simon

Para reflexão

"Schoch recorda que a BMW facturou 21 mil milhões de euros e teve um lucro de 784 milhões, contra a Tesla, que teve uns magros 312 milhões, mas com uma facturação de 6 mil milhões de dólares, ou seja, 5,2 mil milhões de euros."

Recordar o Evangelho do Valor e o poder do preço.

Recordar o exemplo da Porsche e das companhias aéreas.

Entretanto em “Price Management” de Hermann Simon sublinho:

"There are only three profit drivers: price, volume, and costs. Price has a particularly strong effect on profit.
Under ceteris paribus assumptions, price increases lead to massive improvements in profit, while price cuts effect very sharp profit declines. It is often more advantageous to grow through higher prices than higher volumes, or conversely, to accept volume declines instead of making price cuts.”

Trecho inicial retirado de "“Temos de fazer como a Tesla”, diz executivo da BMW"

Voltar ao Evangelho do Valor!

"The legendary investor Warren Buffett considers pricing power to be the most important criterion when evaluating the value of a business. The value of a brand is also ultimately determined by the extent to which it can achieve a price premium.
...
In reality, most firms view their pricing power as quite limited. In its “Global Pricing Study,” Simon-Kucher & Partners surveyed 2713 managers in 50 countries. Only one third of the respondents ascribed high pricing power to their own company. The remaining 67% believed that their company is unable to realize the prices it needs in order to achieve appropriate profit margins.
...
Another important current trend is the rising level of attention which top management is paying to price.
...
In the Global Pricing Study by Simon-Kucher & Partners, some 82% of respondents from around the world said that top management is taking a more active role in pricing. There are several reasons for this. First, top managers and executives realize that their companies have either exhausted their cost-cutting potential or will have great difficulty in achieving further gains.
...
When top management gets involved in pricing, we observe a significant impact on the company’s performance.
...
There is strong improvement across all indicators when top managers get involved in price management. Their inclusion obviously pays off.
...
There are only three profit drivers: price, volume, and costs. Price has a particularly strong effect on profit.
Under ceteris paribus assumptions, price increases lead to massive improvements in profit, while price cuts effect very sharp profit declines. It is often more advantageous to grow through higher prices than higher volumes, or conversely, to accept volume declines instead of making price cuts.”

Trechos retirados de “Price Management” de Hermann Simon.

“Cheap” is another way to say “scared”

Sexta-feira passada, numa empresa mostraram-me um esquema que parecia uma análise do campo de forças pró e contra uma decisão de compra por parte dos clientes.

Uma primeira versão para trabalharem e desenvolverem argumentos de venda junto de potenciais clientes. Uma iniciativa de louvar.

Todos, a começar por mim, sentimos-nos incomodados com o contra, "investimento". Estamos a chamar a atenção para o custo da coisa. No entanto, a realidade é que a coisa custa dinheiro.

“Pricing is a marketing tool, not simply a way to get money
.
Eventually, you’re going to have to tell people how much you’re charging for your services and products. There are two key things to keep in mind about pricing:
Marketing changes your pricing.Pricing changes your marketing.
Because people form assumptions and associations based on your pricing, and your pricing shapes what people believe about your service, it’s important to be clear about how you position yourself. [Moi ici: Mas se eu me queixo que as empresas não se definem, não se posicionam, preferem ir a tudo e todos... medo!] Your price should be aligned with the extremes you claimed as part of your positioning.
...
Unless you’ve found an extraordinary new way to deliver your service or product, racing to be the cheapest probably means that you’re not investing sufficiently in change.
When you’re the cheapest, you’re not promising change. You’re promising the same, but cheaper.
The race to the bottom is tempting, because nothing is easier to sell than cheaper. [Moi ici: O problema é que competir pelo preço mais baixo não é para quem quer, é para quem pode.] It requires no new calculations or deep thinking on the part of your customer. It’s not cultural or emotional. It’s simply cheaper.
Low price is the last refuge of a marketer who has run out of generous ideas.
...
When people are heavily invested (cash or reputation or effort), they often make up a story to justify their commitment. And that story carries trust.
Every con man knows this. The irony is that marketers who need to be trusted often don’t understand it.
Lowering your price doesn’t make you more trusted. It does the opposite."

Seth Godin usa um subtítulo que merece destaque: "“Cheap” is another way to say “scared”"

Excerto de: Seth Godin. “This Is Marketing”

"the financial impact of not buying"

"1. Getting the buyer to agree to the financial impact of not buying.
Every B2B offering promises to increase the customer's revenue, reduce the customer's expenses, or a combination of both.
.
The financial impact of not buying is the sum of the revenue increase and the expense decrease. The bigger that total, the more likely it is that the customer will buy and the more you can charge for your offering.
.
Therefore, before you start talking about price, identify all the ways your product will increase revenue and customer loyalty and reduce expenses. For example:
.
Ways your offering might increase your customer's revenue:
.
More customers for your customer (worth $x more per year)
Bigger purchases from your customer's customer (worth $x per year)
Greater customer loyalty (worth $x in referrals per year)
.
Ways your offering might reduce your customer's expenses:
.
Less inventory (worth $x in carried interest)
Lower shipping costs (worth $x per year)
Less customer attrition (worth $x in lost revenue)
Lower customer acquisition cost (worth $x per customer)
Less paperwork (worth $x in lower clerical costs)
Those are just some suggestions; the specific revenue boosts and cost reductions will of course be specific to your offering.
.
Important: Get the customer to agree that your estimates for all these metrics are reasonable. Once that's happened, your offering will probably seem like a bargain, regardless of what you're charging.
.
Very important: Frame the impact as an amount that's lost by not buying rather than something that's gained by buying. Customers (like everyone else) are far more motivated by avoiding pain (loss) than obtaining pleasure (gain)."

Trecho retirado de "3 Brilliant Ways to Win a Price Negotiation"

O crescimento canceroso (parte II)

Parte I.

Ontem de manhã, antes dum compromisso, tive oportunidade de fazer uma caminhada de 8 km em Rio Tinto onde, entre outras coisas, li um pouco do primeiro capítulo de "Price Management: Strategy, Analysis, Decision, Implementation":

“we can conclude that it is more advantageous for profit to grow through price increases than through volume increases. Conversely, it is better from a profit perspective to accept lower volumes than lower prices.
Confront managers with these statements as they need to choose between alternatives A and B below, and you get an explosive debate.
Alternative A: Accept a price cut of 5% (e.g., in the form of a rebate) and volume remains constant.Alternative B: Accept a volume reduction of 5% and price remains constant.We have discussed these alternatives with hundreds of managers in seminars and workshops. Almost all of them lean toward Alternative A, which means they defend volume at the expense of price, even though profit is $3 million lower (using our earlier numbers) than in Alternative B. Even in the case of improved profit drivers, many practitioners prefer volume growth, usually making the argument that market share is higher under that alternative.”

BTW, recordar as curvas de isolucro sobre como o volume tem de crescer para compensar a quebra do preço e, sobre como o volume pode cair por causa da subida do preço:

Entretanto à tarde, já depois das 17h apanhei este tweet:

Being schooled by Pamela about all things coffee. A transformation story as Colombian farmers go from mass production to small batch high quality branded product. Like making and selling great wine. pic.twitter.com/Z2ODnT1Sax

— Saul Kaplan (@skap5) December 28, 2018

Basic Value Pricing Model

"• Level 1: Commodities you typically buy and resell. These commodity items are easy to find elsewhere, and brand carries almost no value. Your gross margin (GM)—selling price, minus the cost of goods sold, divided by selling price—percentage for this level of products will end up below your company’s average GM percentage. It is best to think in terms of gross margin percentage rather than markup percentage because gross margin translates much more directly to the income statement. Ensure pricing is competitive with the street price (not necessarily the lowest, but competitive). Pricing these products too high might make buyers question all of your pricing.
...
• Level 2: You make, buy, or private-label these products. Your offerings have little or no exclusive customer benefits; little or no competitive advantage; no intellectual property (IP) protection, such as trademarks or patents; and can be sourced elsewhere if the customer is willing to put in the time to research. Target the upper range of competitive pricing for these products or services.
...
• Level 3: You make or private-label these products, or you buy them from a source that is hard to find. These products have some perceived benefits and competitive advantages, and they should have a price point slightly higher than competitors’.
...
• Level 4: You are clearly the vendor of choice for these products, either through recommendation or by a directed-buy mandate. The products have strong, unique benefits and competitive advantages. They might have patent protection or be manufactured with an exclusive capability that few companies possess. These products might be available only from you. The value is high, so price these products with a higher GM percentage."

Trechos retirados de "Is your pricing strategy hurting your business?"

Valor em vez de custo

"1. Think about its value, not its cost.Many people start the process of figuring out how to price their products or services by the costs that go into producing and delivering them. While you need to know your costs, that's not how you should determine your price.
.
Instead, start by calculating the value you create for your clients. How much more revenue do they make? How much more profit? Do you increase sales or lower costs or remove risks? Answer all of these questions and then use this data to calculate your optimal pricing."

Trecho retirado de "Most Companies Get Pricing Their Products and Services All Backwards. Here's How to Get Your Right"

Alterar preços

"2. Changing prices uniformly across your product catalog
Different products or categories have different price elasticities and require different pricing strategies. Demand for some products will change when a competitor changes their price, but not always. Pricing is more complex than that; while competitive pricing is an important component, it’s not the only one.
.
Sometimes it doesn’t make sense to match a competitor’s low price and you may even find opportunities to raise prices instead! For example, Amazon does not have the lowest price on everything—they have some loss leader products or categories but make up the margin in other areas."

Trecho retirado de "Six reasons why your retail pricing strategies aren’t working"

"manage value in order to make a profit " parte III

Parte I e parte II.

"Increase your firm’s bargaining ability In addition to securing a higher added value, firms may also improve the share of created value that they appropriate by improving their bargaining ability towards buyers and suppliers. In essence, this includes different strategies for increasing price without raising the firm’s added value. This may be accomplished by investing in pricing capability, and commercial decision resources, such as IT-based systems, commercial organization, control systems, and commercial experience that improve the quality of commercial decisions made under uncertainty. It may also be accomplished by the development of particular persuasion resources that allows the firm to negotiate more successfully, and ultimately strike a better deal with buyers and suppliers."

Trecho retirado de "What Is Value and How Is It Managed?" de Niklas L. Hallberg, publicado em Journal of Creating Value 3(2) 173–183, 2017.

"helping them break through the limitation of this thinking"

"There is a difference between price and cost. Price is what you pay for something, and the cost is representative of the value (of which price is only part of the equation). Some people prefer to use price as the value, eliminating all other factors from consideration. Helping clients to recognize and address the other factors can shift them away from looking only at price.
...
Sometimes ... you have to engage your client about what else they value outside of price, or you have to prompt them with the value by addressing it directly. You have to point them at the additional costs they are going to incur by being cheap, things like missed deadlines, rework, reordering, waiting for product, additional labor, poor speed to market, falling behind their competition, more labor, disappointed clients, lost clients or customers, poor experience, frustrated internal employees, loss of reputation and on and on.
...
When your dream client weighs price more heavily than other factors that are equally—or more—important, you are responsible for helping them break through the limitation of this thinking. You are also responsible for not allowing them to underinvest in the results they real need—and avoiding the higher price they pay by being cheap."

Trechos retirados de "Helping Your Clients Understand Value"