Transcript
So, hello, everyone. And as always, I have an exciting, interesting conversation partner, Jenny and Jenny. I wonder, before we get going, why don’t you just introduce yourself to everyone? Thanks, Annay. Yes, I’m Jenny Miller, uh, founder and CEO of Untapped Pricing. Uh, we help companies use price to drive growth and and profitability, but also to deepen customer connections. So, I like that, and I think there’s a lot we can unpack. But if I say Jenny, or just think of you, Jenny, I immediately think pricing. And maybe before we go into a specific topic, can you maybe unpack what you’ve been doing over the last few years and the pricing space?
You’ve been on a really interesting journey, if I think back, yeah, over the last couple of years. And I know you’re also doing some writing. Yes. Yeah, absolutely. Well, uh, Untapped really started in recognition of a widespread lack of confidence by business leaders in how to price, right, so. So, uh, how to set prices for new products and services, how to change prices over time, how to communicate price changes without scaring away customers or uh uh putting anything at risk. Um, and so, uh, it has been a roller coaster, a few years building the business and, and partnering with and reaching more and more companies, um, to give them the, the sort of the, the tool set and uh sorry, the toolkit and the mind.
And the evidence to make confident, uh, pricing decisions. Um, and you’re right. I’m also, uh, deep into, uh, writing a book that encapsulates our toolkit, uh, and, uh, helps business leaders take, um, kind of very practical steps, uh, to, to building their pricing capabilities and confidence. And a price or pricing is such an interesting concept, right? Because if, and I, I, I, yeah, I was listening to you saying that, you know, Sometimes leaders or businesses lack the confidence around this topic. But why do you think it’s such an emotional, emotive topic?
Mm, great question. Uh, so I am fascinated by the humans on both sides of a price. So that’s what makes it messy and sometimes they’re predictably irrational. exercise. Um, so you’ve got the, the person or team that are setting prices and all of the, uh, emotions and biases and, uh, things going on within that team that influence their, their pricing decisions. Um, and then you’ve got customers who are interacting with uh a company’s pricing. Uh, they’ve got different perceptions of the value on offer. Perhaps they’re being being anchored, uh, in how they evaluate that price by external forces and, uh, different things in their minds.
Uh, and I think that’s all, uh, uh, makes pricing feel really challenging. And is there, and I’m, I’m, I assume there is a difference when it comes to having a pricing conversation about an existing product or an existing product that’s changing versus a new product versus a truly innovative product. And so are there some differences, or would you say, well, at its core, it’s actually all the same? Yeah, so I, I think uh uh the challenges with pricing are exacerbated for particularly innovative products and services. So in cases where there are fewer benchmarks or market norms to help guide those pricing decisions, or um if it’s a truly disruptive product, customers may not fully understand the value yet.
Um, so I think in those cases, uh, it’s even more of a ripe opportunity to build out the evidence to underpin your, your pricing decisions and put pricing as a, uh, firmly at the heart of any innovation process. And so I think, I think this is where, I mean we can say innovation means pricing, and I think, does that mean we can be innovative about pricing or Yeah, how much leeway does one have to be inevitable? Are they safe principles that, you know, it’s kind of the rules of the game.
Mm, yes. Well, uh, I think there is a lot of innovation in pricing models themselves. So, uh, uh, the, the basis on which organisations charge for, for what they do. Um, so if you think about Um, uh, uh, what have we got, uh, 0, sorry, maybe slack offering, yeah, to kind of build up that, um, uh, market penetration before starting to. size, um, and so forth. But I think price is a common oversight when establishing product market fit. And I see product teams thinking about price too late in the journey quite often.
So, so product market fit isn’t just about whether customers want a product, it’s about whether they’re willing to pay for it at a price that is gonna be viable for the business. So, when would be the right time to think of it? Obviously, you need to have a product, right? But can you, when do you start thinking about price? Is there a time, is it ever too late? Is it ever too early? So I think, I don’t think you necessarily need a finished product. You need a, uh, that is, uh, that you can describe to prospective customers.
So whether that’s a mockup of what it might look like, or a simple sort of prototype or description of how you might charge for it. And, and that’s sufficient to get some early feedback. So do customers kind of understand the value that is on offer to them? Uh, what is the role of price in, in their decision versus other factors? Um, you can ask some, uh, willingness to pay questions and tease out what exactly about the proposition, uh, unlocks that purchase decision for them. And so I think as early as possible in that product development journey, um, understanding exactly what customers are going to pay for, uh, uh, will have a huge impact on the resulting success of that product and, and shape the early evolution of it.
And if you were to, and we, if we just focus now on innovative products, right? In the innovation context, what would you say has been the biggest lesson you’ve learned in your own journey around pricing, innovation, innovative products? What, what’s all like, what would be the kernel of advice that you would always give to people? Think of this one thing, these two things, or, you know, this is the biggest mistake I’ve made and the biggest lesson I’ve learned. Yeah, so I think the uh the thing that never stops surprising me.
Is the anchor points for prices that people have in their heads. Uh, so, and, and that’s, um, can be particularly broad when you’ve got a very innovative product. Um, so we, uh, did some work with a a sustainability startup recently who are developing, um, uh, a nature monitoring platform for enterprise clients, so big global brands. Um, we conducted some research with, um, uh, global CSO, the chief sustainability officers to start testing the concept, having a prototype of that uh, pricing model to, to get some reactions to.
And we noticed that when we asked questions around willingness to pay. And then probed for, oh, what was in your mind when you answered these questions. The, the, the answers were so, the range was so big, and the anchor points that they had in their minds were very broad. And for one person, they even mentioned their Netflix subscription. I mean that’s a completely irrelevant benchmark as a sort of consumer streaming product versus this enterprise level. Of software, but what was in their minds. So, in situations like that, a, uh, learning that as soon as possible is important.
Um, but B, it helped us realise that we needed to help this client’s customers, uh, understand the value. Uh, we need to work, work harder at doing that. Um, but also work harder to set those anchor points or those benchmarks in, in their minds. OK. So, I think we, we have enough material still to cover for another in another podcast around how we actually better navigate the pricing journey. Cause I think we were, I think there are, there are, you’ve learned a lot, and maybe there are some do’s and don’ts.
I can hear from the your last response that I’d love to explore with you. Um, and so, to everyone listening, there’ll be a part two to our conversation, and it will focus not necessarily on innovation meets pricing, which was Towards the end, what we focused on towards the end of this podcast, but actually, I think some tips for navigating the pricing journey will come next. So Jenny, until then, thank you very much. My pleasure. Thank you.
