[00:00:00] Mark Stiving: We go through an exercise to find several situations or products that they have where customers have not compared them to competitive alternatives. We try to coach them to realize, hey, we could have charged more there. We could have discounted less at that opportunity. It's really a way of us thinking about our customers and how they make decisions.

[00:00:31] Andrew Michael: This is Churn.fm, the podcast for subscription economy pros. Each week we hear how the world's fastest growing companies are tackling churn and using retention to fuel their growth.

[00:00:43] VO: How do you build a habit-forming product? We crossed over that magic threshold to negative churn. You need to invest in customer success. It always comes down to retention and engagement. Completely boosts the strategy, profitable and growing.

[00:00:56] Andrew Michael: Strategies, tactics and ideas brought together to help your business thrive in the subscription economy. I'm your host, Andrew Michael, and here's today's episode.

[00:01:07] Andrew Michael: Hey, Mark, welcome to the show.

[00:01:10] Mark Stiving: Thanks, Andrew, it's gonna be fun.

[00:01:21] Andrew Michael: It's great to have you. For the listeners, Mark is the founder of Impact Pricing and author of Selling Value, Impact Pricing, and Win Keep Grow. Mark is also an instructor on pricing and pragmatic marketing and previously held several pricing roles at companies like Maxim Integrated and National Semiconductor. So my first question for you, Mark, is what was it about pricing and packaging that drove you to build a career and business around it?

[00:01:37] Mark Stiving: Oh my gosh. What is it about pricing, first off? Because packaging I kind of fell into later. In the world of pricing, I was always quantitative. I loved math. And so pricing feels like a number, right? I'm going to put a number on something. It is math. But once you start digging in, you find out that there's so much psychology and emotion and strategy. There's so much going on in that price number that so few people understand.

[00:02:04] Mark Stiving: I just find it I'm addicted to understanding how people use prices to make decisions. Once you start really diving deep into understanding how people use prices, then you start to say, well, how is it that companies can use that information to make much better decisions? Obviously, they have to make pricing decisions. They have to make pricing strategy decisions. But then you quickly realize how we package our products has everything to do with how much money we can get for them when we charge for them. And so packaging is just one of those things that falls right into place when we think about what pricing is.

[00:02:30] Andrew Michael: As you're talking now, you reminded me of a quote somebody mentioned to me recently. So I'm exploring the space now at the moment to start a new company. And this quote went something like, we were talking about how they landed on their pricing and packaging and the sort of, you said the quote was I feel like in most companies were held hostage by the decisions of our past. And it gets to a point in time when we become too scared to make these changes just because of, as you mentioned, all these unknowns you might see at the service level, it's just a quantitative number, but really there's so many different influences that impact the actual pricing and packaging and output that you get.

[00:03:18] Andrew Michael: And I think a lot of times founders get very scared, they get held hostage because in the beginning they may be sucked it out of their thumb and said, okay, this is the price or maybe looked at a few competitors and said, this is what it should be. But then they get supported in scale and size where it becomes a risk to make those changes and then become very scared. And this is hopefully something we can chat a little bit about today. And I'm sure you've seen this a lot in the work that you do as well. But maybe you can give us a little bit of overview of what is Impact Pricing and how do you work with customers.

[00:03:44] Mark Stiving: So impact pricing is me. I have a few people that support me, but all I ever do is teach companies and advise companies. That's it. I love, it gives me the ability to go address many, many different companies, different industries. I get exposed to so many different opportunities that probably my favorite thing is finding something I don't really understand. I haven't seen it before. And I have to say, why do my frameworks not work in that situation? And so now I get to expand a framework or build a new framework out. And I see this over and over through my career.

[00:04:23] Mark Stiving: So probably the single thing I do most often is I help private equity firms when they acquire new companies or when they have new companies and they're trying to grow the valuation of that company quickly. I help them understand how their customers value their products. And then once they understand that, they have the ability to do pricing and packaging and selling and a lot of other business decisions.

[00:04:47] Andrew Michael: Yeah. Maybe you can give us one of those recent examples where you got surprised at something you hadn't seen because I think that's always interesting. Frameworks are great, but it's always nice when we get a sidewall and anything. So what was something new that you discovered or learned?

[00:05:01] Mark Stiving: Okay, I'm going to be embarrassed to tell it, but I'll tell it anyway. I have this really strong belief in understanding how customers value products. And typically when I do that, I have a tool I call the value table where we say, what's the product that you have? What problem does it solve? What's the result the client might get? And then what's the quantitative value or dollar value that we could achieve if we got that? And I started working with a company that I just couldn't succeed with that.

[00:05:27] Mark Stiving: These guys were doing IoT communications. And the problem is IoT communications addresses so many different industries and so many different products, and there's so many different places where there's value. And I finally realized the problem I was struggling with is that when I use these value tables, they have everything to do with a solution, or you would think of it as a vertical market. What the client I was working with was really a platform, or you would think of it as a horizontal market. That allowed me to create a whole new strategy of thinking about how do we deal with platforms, how do we deal with solutions, what's the right way for companies to be addressing either of those or both of those.

[00:06:11] Andrew Michael: I think it's interesting as well, like from the platform pricing perspective that most companies don't start needing to think about this, but as they started sort of any size of scale and they've started to layer on different products and services, ultimately they ended up becoming these platforms and the pricing and packaging that they started with really doesn't fit and meet the needs of the company that they've become. So, I think there's also that challenge as well, not only like figuring out pricing for platform products, but also like how do you deal with the change and evolution of the product or service that you have when it becomes platform?

[00:06:43] Mark Stiving: And what's fascinating in my view is the flip is probably true as much as what you had said. And that is the company start out as a platform company and then over time become more vertical. So a company I like to use as an example of Zoom. We all know Zoom, we've used Zoom. We can use Zoom to talk to our relatives, right? Which has almost $0 value.

[00:07:06] Mark Stiving: Or we could use Zoom to close a multi-billion dollar deal, and that has tons of value. And so how do you capture that different amounts of value? And one of the things Zoom has done is they've said, hey, we're gonna go after these specific verticals, and one vertical that you would think of is telemedicine. So now a doctor can do calls over Zoom, and you've got HIPAA requirements and things like that. They can charge higher prices because they've specifically created a solution for a market segment on top of the platform that they're selling.

[00:07:38] Andrew Michael: Yeah. It's interesting. Like these sort of vertical lives, these products as well, how many different opportunities there are and trying to discover where value lies in those. I think there's just so much opportunity and it comes with pricing and packaging of how you can unlock value. And you mentioned, you help a lot of startups, like typically you come in and you're working with private equity. They've just acquired a company. They're trying to like, see how they can extract value and turn the business around.

[00:08:02] Andrew Michael: Where do you typically get started when you walk into a company? So you mentioned some form of framework there, but like, what is your typical process go like when you're evaluating a company to work with?

[00:08:13] Mark Stiving: Yes. So, I'll have a conversation, a one hour conversation. Typically it's with the CEO or a C-suite type person who understands the value of the product, understands the customer, and we can decide if there really is an opportunity or where the opportunities lie. And then usually what will happen is I'm going to end up doing a three hour Zoom class with this company. And that in the three hour Zoom class, it's like me teaching them everything they need to know. But they walk away not knowing any of it. They've just been exposed to it. They've seen it.

[00:08:47] Mark Stiving: And then we get together for one or two days and we start doing exercises to apply each of those different things to their company and looking for where's the low hanging fruit. Where are the pieces that we think we can make changes on relatively quickly. Now I can tell you the one thing that happens universally across every company I've ever worked with, and that is they don't understand the value of what it is they sell to their customers. And if companies could learn that and figure that out, it would help certainly our sales, but it would help customer success as well.

[00:09:20] Andrew Michaels: Can you elaborate on that a little bit more?

[00:09:24] Mark Stiving: Sure. Most companies, if you think about a product that you sell or a product that you've sold in the past, you have what I'll call the curse of knowledge. You understand that product so well that you think in terms of that product. Let's say that you're going to sell computers. And I'm not a great computer guy, but you're going to sell computers and you start saying, hey, we've got five terabytes of hard drive and six gigabytes of SDRAM. You're listing these specs and they mean something to you.

[00:09:53] Mark Stiving: And now your grandfather walks into Best Buy to buy a computer and someone says, we've got five terabytes of hard drive and six gigabytes of SDRAM. And they're like. Yes, So what? they don't get it. And so this is true in our world. We understand our products so well, that we think when we say SDRAM, everybody knows what that means. And you have to translate that to your industry, but I can tell you that is universally true. And if you can stop,  take the time and say, why do we have SDRAM in a computer? What problem does that really solve for my customer?

[00:10:29] Mark Stiving: And if they have this, what's the result they might achieve. And then in the B2B world, how much more money does that make them? Because we did that. And if you can learn to do that, that changes the way you think about your business.

[00:10:41] Andrew Michael: Yeah. I think like pricing and packaging often it falls within like product marketing as well within organizations. And I think for good reason, because of this very point, as you mentioned, like a lot of it is around understanding what the value is that your product is delivering and how to communicate that in a language that your customers understand. But often, as you say, we have our own internal biases, we get lost in our own technical jargon and removing ourselves and saying, okay, let's take a step back and what is the actual value?

[00:11:08] Andrew Michael:  I think there's companies that just do this exceptionally well. You gave the example of the computer. I think like Apple is the complete opposite almost in this in terms of, yes, they do talk about the SDRM and things, but it's almost like a  is secondary piece of information, but it's more on like, what is the final output? What do you get with it? Like a foster gaming experience or a streamlined understanding of viewing content or whatever it is that they're talking about the outcomes as opposed to the specific features that the product or service has.

[00:11:38] Mark Stiving: I think that's spot on right. And if your listeners want to find a great example of this, recently, I was on the Salesforce.com website, and Salesforce does a fantastic job at talking about results that people might get and they're not talking about the jargon of what they deliver. So go to Salesforce and study their webpage.

[00:11:58] Andrew Michaels: I think it's interesting as well then to think about like when we do list features, like how can they be positioned in the way that you're not just listening, like the matter of fact that they're a bit really around the value that they deliver because ultimately like almost every feature is built for a reason it's built to solve the job of our customers. And finding ways and I think this obviously comes into the discussion of value metrics and figuring out like what is the ideal value metric but I think it goes beyond that to sort of think, okay, like, what are all the features within the product or service and how can you communicate those better so that the end user understands the value that they deliver.

[00:12:33] Mark Stiving: Yeah, and if you think about it different customers care about different features and why is that? It's because different customers have different problems to solve. And our job should be to understand why did we build this feature? What problems did we build it to solve? Which customers have this problem and which customers don't have this problem. And that's really what should be driving our market segmentation.

[00:12:56] Andrew Michael: And in an ideal world, you've done the pricing research ahead of building the product or service so you understand where the value lies and who it's for. So, you mentioned you would start out with a call with the client and then you'd have like a two day workshop. What are some of the things that you're working through these companies with over these couple of days, like some of the areas that you'll go to always when you're looking at trying to educate them on their pricing and packaging?

[00:13:21] Mark Stiving: Yeah. So one of the things we always start with an exercise that I do called will I and which one. Will I and which one is simply, there are sometimes customers buy from you without looking at a competitive alternative. And I think of this as a will I only decision. So they only said, am I going to buy something in the product category?

[00:13:40] Mark Stiving:  They didn't go on to say, okay, which one am I going to go buy? If they don't compare you to a competitive alternative, they're not price sensitive. We go through an exercise to find several situations or products that they have where customers have not compared them to competitive alternatives. We try to coach them to realize, hey, we could have charged more there. We could have discounted less at that opportunity. It's really a way of us thinking about our customers and how they make decisions.

[00:14:09] Mark Stiving: One of the fascinating things about SaaS is that once someone's bought into your platform, odds are really, really good they're not going to shop around someone else when they go to buy the next add-on or the next option that you offer. Those are probably will I decisions. What that means is that people aren't trying to say, how much is yours? How much is your competitors? They're really just saying, what's the value of the problem that you're solving for?

[00:14:38] Mark Stiving: And that changes the way we think about pricing. Because when we're pricing relative to a competitor, we have to say, what's the value of the differentiation. When we're pricing and there is no competitor, what's the value of the problem you're solving. And usually that problem, the value is much, much higher and there's no competition. So we usually do that to start off with mostly because it gets them thinking differently and that's really what I'm after.

[00:15:05] Andrew Michael: I think it's very interesting sort of the point you mentioned, like the add-ons and the expansion, very few companies actually shop that around afterwards and thinking sort of like how you can land and expand customers. When you think about pricing and packaging more effectively is that ultimately like you can get them in the door at a lower rates, but then once you've got them in the door, like the add-ons and expansion revenue, you can come from there and you can build that up over time.

[00:15:29] Andrew Michael: Which is, I think, something to talk a little about in the context of churn and retention when it comes to pricing and packaging. So, we talked a little bit about this at the start of the show that, that's the main area where you see the value lying as well in pricing and packaging as being able to expand and grow existing customer bases. And I'm keen to hear your thoughts on how you think about pricing and packaging through the lens of retention.

[00:15:51] Mark Stiving: Yeah, and this actually ties together with a lot of things that we've talked about so far today. But let me say, customers use the word land and expand a lot. My customers do. And almost every one of them focus a lot on landing new customers and rarely have a strategy on how they're going to expand. They think that just happens by chance. But one of the fascinating things you said earlier, which is so true, and that is that as companies grow, it becomes harder and harder to make good decisions. They're afraid to make changes. There are these three major decisions that companies have to make and they're hard to change over time.

[00:16:28] Mark Stiving: Those three decisions are what market segment are we going after, how do we package our products, and what's the pricing metric that we're going to use as we charge for our products. We tend to start off with something and then it's really hard to change that. But if we start off with those three decisions really intelligently, it gives us the ability to do expansion exceptionally well. Because there are only four ways that you can grow a customer. Those four ways are raising prices. One of my favorite things we can talk about that later if you want, right?

[00:17:02] Mark Stiving: So we could raise prices. That's obvious. We can do something called upsell. Now upsell comes from I've packaged my products into good, better, best, or I've packaged my products so that I've got the MVP plus some options. So I want people to buy into my good product. And later upsell or buy up into my better, my best packages. So now I'm getting more and more revenue from my current customers. Another one is called cross sell. Cross sell is where we're going to buy something that could be standalone from us, but they buy it because we've built a great relationship with them.

[00:17:40] Mark Stiving: They trust us. They know that what we sell really works. And so cross sell makes a lot of sense. Typically more mature companies have cross sell, not the startups. And then the other one that's crucial is usage. What we want is as customers use more of our product. Theoretically, they're getting more value from our product. They should be paying us more money. Well, that has everything to do with what was the pricing metric that we chose.

[00:18:08] Mark Stiving: So if we chose to price based on the number of users, then as a company grows and they get more users, they pay us more money, that's growing customers. But on the other hand, maybe users isn't the right metric. I was working with a company that sells to law firms, a tool to law firms, and they were pricing based on users. And it worked really well for small and mid-sized law firms because every lawyer needed this tool. When you got to bigger size law firms, they would hire an admin person to use the tool. And so, they ended up with fewer users for larger customers and more usage. And what that says is that they're using the wrong pricing metric.

[00:18:50] Andrew Michael: I think a lot of companies also realized the seat based pricing was perhaps not a great choice, especially in a down market now where every company is sort of like scrutinizing the bottom line and seeing where they can cut costs and allow that becomes like a users and also a lot of companies, unfortunately having to let people go and then the seats aren't becoming redundant, but maybe ultimately the tool is still being used in a similar fashion. They're still getting the usage out of it through those other metrics that could be better off as well.

[00:19:20] Andrew Michael: So yeah, interesting. Sort of those four ways, like as you say, are great levers for expansion. And I think it's something, as you mentioned, you should really be thinking about early on in the business. I think this is something similar at Hotjar. We came to some point where this was an afterthought at the start and it was sort of just in the beginning like, let's have a good, better, best pricing, like a $29.89, $189 price tier.

[00:19:43] Andrew Michaels: But ultimately what ended up happening was that we had these huge companies, like millions and millions of site visitors per month spending $89 a month, where in actuality, like the value they were extracting from the products or service was 10x that. And making that switch to the usage-based pricing was like a big step change for the business, but it wasn't really a thought in the early days. And it probably cost the business like a lot of money and stunted the growth in the early days outside, even though it turned out to be a big success as it was. But really being thoughtful about this from the beginning can make a big difference to you.

[00:20:19] Mark Stiving: Absolutely. When it comes to packaging though, in the beginning, I recommend you don't try to do good, better, best right off the top, right off the start. You have one product, go sell a product. And it doesn't really matter if we're price optimized yet. We've got to prove product market fit. We've got to prove that someone's willing to pay money. And then as we start to learn from those customers, we can figure out who are the market segments and how do we create good, better, best, and what are the features that matter to which type of customers? And so, I would start with a single product and go to market.

[00:20:49] Andrew Michael: Interesting. I think like that's also one of the other aspects is I touched on it briefly in the beginning, but like pricing and packaging, something I learned over the years, it should be treated just like another part of the product. As opposed to this precious thing that you don't want to touch and you don't want to move and just as much as like you iterate on product, you should be comfortable iterating with pricing. Like I'm sure this is something you probably face a lot when you start working with companies and hesitation. How do you end up like getting them to overcome those hesitations and getting to move forward with executing on pricing changes?

[00:21:22] Mark Stiving: Yes. What's common is that a company that hasn't done a pricing change or made, made pricing modifications for several years is terrified to do anything. They think no matter what they do is going to end up causing them headaches and a big problem and inevitably they're going to find that just try this one and it makes them a lot more money. It is almost inevitable that making pricing changes makes more profit. Almost inevitable. Now certainly it's possible that we could raise prices way too high and we lose a whole bunch of customers. But by the way, all we need is a mitigation strategy, right?

[00:22:00] Mark Stiving: How do we not lose customers if we raise prices on them and they say we quit? Well, we say, oops, we didn't mean that we bring their price back down. And we keep them from quitting. So it isn't the end of the world to try these things, but almost always there's profit to be made.

[00:22:15] Andrew Michael: Yeah. And what does that mitigation strategy look like then? Cause I think that's probably something that would help put a lot of founders minds at ease as well. And operators.

[00:22:26] Mark Stiving: So in the world of raising prices to subscription companies, to subscribers. First off, I want to point out that when someone bought from you in the first place, they didn't really know the value of your product. They had this perception of what they thought it was going to be. And now that they use your product, they know what the value is. And by the way, they've built it into their processes. And so it's harder for them to switch.

[00:22:51] Mark Stiving: They are willing to pay more once they know you love your product than they were before they bought your product. So that should say to you that you should be comfortable raising prices. On the other hand, what you could be doing is I always recommend we tier our customers. So if you look at our customers on who uses our product the most, and we raise prices on them first, and we just watch to see what happens. Because these are the people who love you the most. They use you the most.

[00:23:22] Mark Stiving: And odds are good, nobody churns, nobody does anything. Then we start to work our way down. Maybe it's in 20% or 25% increments. We work our way down and then we get to a tier where people start to churn. First off, we're going to stop raising prices at people below that tier. And secondly, if someone wants to churn, there are two things that we can easily do. The first thing you want to do is you want to make sure you've communicated your price increase properly.

[00:23:51] Mark Stiving: But assuming that they come back to you and say, hey, we can't afford this, we're gonna switch somewhere else, you could say, well, I tell you what, you've been a really great customer, why don't we hold your price constant for six months, three months, and then we'll give you the price increase. And often that makes them feel good enough that they're willing to take it and you did something nice for them. The other mitigation strategy is you just say, oops, I didn't mean it, we'll bring your price back to what it was and not end up raising their prices.

[00:24:20] Andrew Michael: And in that way, sort of you mitigate the risk almost completely from the end user perspective. The other side as well, I think pricing can be a real big lever for retaining customers as well. And there's this sort of the case as well. And a few people have mentioned this, I think on the podcast even before that, increasing their pricing once a year helped increase retention. Is this something that you see with companies that you work with? And if so, like, why do you think that is?

[00:24:47] Mark Stiving: I have not seen that or even heard that said before. I find it fascinating. If I were to accept that as a true premise and say why I think that is, I would say it's because one of the great things about cloud-based SaaS products is that we have to constantly make our products better and better and better. And one of the justifications for raising prices is look at all the things we did for you last year. And so if we're actually improving our product, announcing the fact that we've improved our product and raising prices, I could see how that could generate more loyalty from our customers.

[00:25:26] Andrew Michael: I mean, I've heard this several times. The thing that no one could rationalize in my mind as well, hearing it, was that they adopted more of a grandfathering strategy where existing customers retain their old prices and then in that way, by increasing prices, they rewarded the loyalty of the existing customers.

[00:25:44] Andrew Michael: But yeah, I think in general, like I had the similar reaction to you in the beginning. That's why I was wondering, maybe you had heard something from your perspective and having worked with lots of companies. But the thing, the way our rationalizer could explain `that was their strategy on that perspective.

[00:25:57] Mark Stiving: I think that's a great comment. And one of the strategies I often teach clients is that if you're going to raise prices, raise prices on your new customers first. Right? So people who haven't bought from you yet, they don't even know you raise prices. So for the sake of argument, let's say you raise prices 20% on new customers. Then when you go to your existing customers, you can raise their price 10%. And you could say, hey, we know it's a price increase, but look, you're still paying less than new customers. Right. And that makes them feel better. This relative pricing really matters in people's minds.

[00:26:35] Andrew Michael: Absolutely. The next thing I was interested in, obviously worked with quite a lot of companies when it comes to pricing and packaging. From those companies that have had the most successful sort of pricing and packaging updates, what do you think the teams got right? Is there any sort of common thread you've seen between the teams that really nailed their pricing and packaging after working with them?

[00:26:57] Mark Stiving: This is a hard one. Number one would be willingness to try new things. It is totally okay to try something and then say, okay, that didn't work. Let's go try something else. Right. Let's bring it back. But you'll find that as people try and test more things, they realize, oh, there's a lot of power here. Let's go play more. I've seen that in a lot of companies where they were very reluctant to change prices or change pricing strategies or packaging.

[00:27:23] Mark Stiving: And then once they started, they realized all of the gain they could get and it became a regular cadence, something they would do on a frequent basis. So I think that's a really big deal. And then the second, I find it much, much easier to work with small companies because oftentimes the CEO or an executive is saying, hey, there's opportunity here that we're missing, let's go make that happen. Whereas when you work with large companies, you might have someone in the pricing team or the product marketing or product management team saying, hey, there's all this opportunity, but they can't get the rest of the company around them to say, hey, let's go make a change, let's go do something. So certainly it's easier to do in smaller companies than it is to do in bigger companies.

[00:28:03] Andrew Michaels: Bigger companies. And in the companies and the larger companies that you've seen that do well and be able to sort of like maybe somebody in product marketing, be able to mobilize the organization, what do you think it is about them that manages them to get the organization to move and make changes?

[00:28:16] Mark Stiving: I think there's two things that really matter. One is having executive support. And two is being able to sell inside the company. Now being able to sell inside the company is a really hard thing for employees to learn to do. Employees think they have a job and it's their job to go do their job. But in truth, everybody in the company has a job. And if we're not helping other people achieve their goals, then we can't get them to support our initiatives, to support the things we're trying to get accomplished.

[00:28:49] Mark Stiving: And so, my strong recommendation and what I see in the only people I see really succeeding at this, are people who are willing to go to different departments, build strong relationships, understand what each of those other departments' goals really are, and make sure that you've listened and try to interpret or twist what we're trying to do to show them how they can achieve their goals.

[00:29:14] Andrew Michael: So you really need to become good at selling internally and really be evangelizing these changes and as you say like have executive support to be able to push through the finish line because I think, especially as the company's get larger, it becomes more of a risk and then it's being able to manage that risk effectively to be able to mitigate those risks in as many ways as possible.

[00:29:34] Andrew Michael:  And partly I think in that it comes to research like qualitative and quantitative, but then also just as much needs to be communicated internally of why these changes are happening, what is the evidence that we have, why do we believe this is going to make an impact and very nice.

[00:29:48] Mark Stiving: That's absolutely right.

[00:29:49] Andrew Michaels:  I see we almost running up on time. So I want to make sure I ask you a question, ask every guest. What's one thing that you know today about channel attention that you wish you knew when you got started with your career?

[00:30:02] Mark Stiving: It is all about value. So if people aren't watching this, I'm old, right? I'm over 60 years old. I've done many, many different things in my career. And one of the things I did early on was a salesperson and I was horrible. I would do what I would like to call show up and throw up. I could talk about my features and my specs and, and I'd be staring at my potential buyer's eyes hoping, hoping that they heard something that really turned them on. And now I understand completely it is all about how do they get value from what it is that I'm selling. And, oh my gosh, I think if everybody understood that it would change your career.

[00:30:45] Andrew Michael: I often say this, I think it's like churn and retention is actually the simplest thing to solve. It's really about understanding what the value is and making sure ultimately people come to you with a problem or they need a service and they're looking for some sort of value. And if your product delivers that value, there's no reason for them to churn. If your product doesn't deliver that value, that's when you have issues and when you have problems and making sure you understand that deeply and understanding their needs is saves you a lot of pain and troubles all in the long run.

[00:31:11] Mark Stiving: I think that is spot on. And the other thing I would challenge customer success teams to start doing, I rarely see this happening. Customer success teams certainly watch usage and how are our customers using our products? I would challenge them to start quantifying the value our customers are getting based on what they're doing with our products. And I'll bet you that changes the way they think about helping customers.

[00:31:36] Andrew Michael: Absolutely. I think there's also some very interesting analysis that you can do on this and you can sort of, on a four by four matrix, map out your usage on the X axis, you can put the costs and then on the Y, you can put the value your customers receive from your product or service. And you can quite quickly and easily see there where maybe companies are getting way too much value and they're not paying you enough and there's opportunity there for expansion and upsell.

[00:31:59] Andrew Michael: But in other quadrants, you might see that they're spending way too much and getting very little value. And then as you highlighted, I think that's a great way for CS leaders, for sales leaders, for marketing to really understand product. Are they delivering the value that they're selling on? And it's a great way also to get guests here as well from a pricing packaging standpoint is, is there an opportunity for us to expand and grow these accounts as well?

[00:32:23] Andrew Michael: Very nice, Mark. It's been an absolute pleasure chatting to you today. Is there any final thoughts you want to leave the listeners with like anything they should be aware of to keep up with your work?

[00:32:31] Mark Stiving: I would love it if people would follow me on LinkedIn. I post very frequently. And also subscribe to my podcast. I've got a podcast called Impact Pricing and I talked to pricing professionals and share pricing knowledge weekly.

[00:32:45] Andrew Michael: Very nice. For the listeners, we'll make sure to leave everything in the notes that we discussed today so you can find that there and, Mark, thank you so much for joining today. I wish you the best of luck going forward.

[00:32:54] Mark Stiving: Thanks, Andrew. It was fun.

[00:32:56] Andrew Michaels: Cheers.

[00:33:00] Andrew Michael:  And that's a wrap for the show today with me, Andrew Michael. I really hope you enjoyed it and you were able to pull out something valuable for your business. To keep up to date with churn.fm and be notified about new episodes, blog posts and more, subscribe to our mailing list by visiting churn.fm.

[00:33:18] Andrew Michael: Also don't forget to subscribe to our show on iTunes, Google Play or wherever you listen to your podcasts. If you have any feedback, good or bad, I would love to hear from you. And you can provide your blunt, direct feedback by sending it to Andrew@churn.fm. Lastly, but most importantly, if you enjoyed this episode, please share it and leave a review as it really helps get the word out and grow the community. Thanks again for listening. See you again next week.

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