Alan Albert – Why Much of What You Know About Your Customers is Wrong

Why you have to check out today’s podcast:  What is Value Research Discovery  Identifying what specific values the customers have and letting go over assumptions around that  Why is it not necessary to follow your competitors’ pricing model  Alan Albert is the President of MarketFit, providing strategic services that drive measurable growth. He is a co-founder of three software companies, selling one to Apple Computer. He conceived and led the design and development of multiple top-selling and award-winning products, generating over US$1 billion in cumulative revenue. In this episode, Alan leads us to a discussion about market segment, pricing metrics, and value, how they all relate to value creation and pricing. His vast knowledge about capturing value will give you a clear understanding of what value-based pricing is all about and debunks whys much of what you know now about your customer is wrong.   “Whether your company's biggest challenge is in the area of innovation or in marketing or in product or in pricing, they all tie into customer perception of value. Start by letting go of your own assumptions about what our customers should care about and take the time to truly discover and understand and gain insight into your customer's perception of value.”   – Alan Albert    Get Accelerate Your Subscription Business: Your Blueprint to Packaging & Pricing for Growth Course at https://www.championsofvalue.com     Topics Covered:    01:24 - What is Value Discovery Research?  02:30 - What is Value?   05:58 - Customer Value: What it means and how to create it 07:02 - Walking through the process of Value Discovery Research  11:35 - Why value-based pricing is a misunderstood model  13:56 - Values: Why most companies get it wrong 14:52 - What is Market Segment and how does this relate to Value  16:46 - How does Value Discovery Research drive Pricing Model  17:53 - What is a Pricing Metric  21:05 - Why it is not effective to follow your competitor's pricing model    Key Takeaways:    “The first step in value discovery research is to acknowledge that we do not know our customer's perception of value. My definite definition of value is what something is worth in exchange as perceived by the recipient.” – Alan Albert    “There is a difference though than having the same problem and having the same values about how to go about solving it. Some might want to solve it with a do it yourself approach. Some might want to buy the most expensive product on the market. Some may want to just dip their toes in and try something without being too committal. They all still have the same problem, but the values of the people may be different and that will lead them to different solutions.” – Alan Albert    “Often people think of pricing initially as picking a number, what price should we charge? And by focusing on customer perception of value, I've learned that pricing is actually an area for innovation that by changing the pricing model, companies can do a far better job of generating revenue and distinguishing themselves in the market than just picking a number.” – Alan Albert     “Following your competitor’s pricing is rarely the most effective strategy. Companies like Netflix with their all-you-can-eat subscription pricing or Amazon with Amazon Prime have seen just enormous gains just by coming up with innovative pricing models, by changing what people are paying for.” - Alan Albert    “If we know what our customers value and we can measure the delivery of that value, we can increase the price of our product so that those who are getting and receiving the most value and perceiving the most value are paying the most for it.” – Alan Albert     “One way of distinguishing your product or service in the marketplace is to use a completely different pricing model. This makes it so that your customers cannot directly compare your product to theirs as a commodity.” – Alan Albert    “Understanding the customer's value is, does not mean you need to have a complicated pricing model. In fact, simplicity as you mentioned, is a virtue and that's the beauty of something like Amazon Prime, like Netflix, all-you-can-eat subscriptions, it's relatively easily understood and the value of it is quite clear.” – Alan Albert      Resources / People Mentioned      Infobip  Pragmatic Marketing      Connect with Alan Albert:     MarketFit.com   LinkedIn   Twitter   Email: [email protected]       Connect with Mark Stiving:       Email: [email protected]     LinkedIn     Twitter     https://www.championsofvalue.com