Episode Transcript
[00:00:00] Speaker A: I said, hey, is there a playbook? Like, when you buy a company, what do you do? Because I was looking to reverse engineer my m and a activity, and that's how I coach my clients is towards the goal in mind. As a purpose driven coach, my job is to kind of reverse engineer what an exit looks like. And a lot of that is the market you're looking to serve and how you break that market down. And then, of course, how you're pricing to that market.
[00:00:19] Speaker B: Yo, Mike check. What's up, everybody? You're listening to the street pricing podcast, the only show where proven SaaS leaders share their mindset and mistakes in pricing so we can all stop and start growing. Enjoy, subscribe, and tell a friend. Now, let's break it down with your host and sought after Slayer of bad pricing, Marcos Rivera.
[00:00:42] Speaker C: What's up, and welcome to the street pricing podcast. I'm Marcos Rivera, author, founder, and pricing coach, and I'm feeling really good about today's guest. I'm gonna tell you why, and you'll see why here in a few minutes. Today, I have James Martin, Sr. With me. He's the CEO of Rallycorp, as well as a Revops coach. James, welcome to the show.
[00:01:03] Speaker A: Hey, man, great to be here. Thanks for having me.
[00:01:05] Speaker C: Nah, man. You're one of those really, just really good people that I love talking to. But you're also one of my favorites. Cause I get really hungry when I talk to you because of the fabulous tacos we've had in the past. Right. But we'll unpack more of that a little later, man. Tell everybody about yourself and what you do.
[00:01:24] Speaker A: Hey, everybody. Yeah, so, again, Marcus, thanks for having me here. James, startup, founder, entrepreneur. But Rallycore is my most recent company, building out with a great team out of San Diego serving charities and causes. And then, as you mentioned. Yeah, Rev opscopes coach. Usually helping organizations bootstrap to the first three to 5 million mark. Kind of in that. In that area. So, yeah, it's just.
[00:01:47] Speaker C: It's in. It's in your veins. You just love helping, right? In general. And that's one of the big. The big things I love about you, man. So.
[00:01:53] Speaker A: All about people, man. All about the people.
[00:01:55] Speaker C: All about the people at the end, that's the truism across every industry, right. So, excellent, man. To unpack some things around pricing monetization, because pricing is not just for the profit seeking. Good pricing could be for nonprofits, too, right? And it could also be good for those who serve. Well, I want to make sure that we cover all the learnings that you have. So, are you ready to get street, man?
[00:02:18] Speaker A: Let's do this already.
[00:02:20] Speaker C: Excellent. So, for everybody listening, quick roadmap here. This show is formatted after the book, street pricing. So we're going to go rewind, and we're going to step through a story, a pricing struggle, a pricing success. We want to hear what really happens, so that way, folks out there could learn, and then we're going to bring it to play today, what is really working well nowadays. And then we're going to go to fast forward, which is. All right, well, what's next when it comes to pricing? And I want to unpack some special topics with you on that front. Does that sound okay?
[00:02:49] Speaker A: Sounds great. It's good.
[00:02:50] Speaker C: Fabulous. Well, James, tell us a story.
[00:02:52] Speaker A: Yeah. Okay. So, actually, with your help, you helped us really get this right. So when we. When we brought you into our company at Rallycorp. But short version is this, we serve nonprofits. And just that name right there tells you that most organizations that consider themselves a nonprofit might think that there's something uniquely special or unique about them. Right. There's their problems. What have you. So, one of the biggest challenges we had early on in our startup, which is nailing who our ideal customer is, is it. And now we use tiers. I'll talk a minute now about where we are today. But is it a tier one nonprofit that's 10 million or more in revenue, or is it a tier four in a nonprofit that is under 2 million in revenue? So, without really knowing who our customer was, Marcus, it was really hard for us to identify what the pains that they were having, because they were different sides of that equation, right where their biggest challenges were. And without knowing what pains they were having, we didn't know what levers to pull on to really nail our pricing, because if you solve a dollar five problem and you charge a nickel for it, that's not good. But if you're solving a, you know, nickel problem and charging $5 for it, that's not. That's not good either, right? So, um, nonprofits are just like any other business. They've got challenges. Uh, they have things that they're trying to do. Missions are trying to move forward. Money creates the time and space for them to live out all of us, to live out our values and our mission. So having the right understanding of the pain that they're having and being able to drive those. Those levers, so to speak, in the conversation, allowed us to get clearer on, like, how can we move up market to serve more the tier threes tier, you know, to your fours, you know, move from the fours to the twos to the ones and really know that over time. Does that make sense?
[00:04:24] Speaker C: 100%. I mean, if you really don't understand the pain, how can you help them gain at the end of the day? Right? And so that's where, believe it or not, when someone approaches and say, I have a really big pricing problem, I start to ask questions about their customers first.
[00:04:39] Speaker A: I know.
[00:04:40] Speaker C: It's funny. It's like, well, you should be asking about their model, right? But no, I start talking about, well, what do you know about your customers? How are they different? How are they the same? Who's the best one for you? And that usually starts to reveal something else. Right. Which is they're not really targeting or selling to the right group. So that's a big one for everybody here.
[00:04:57] Speaker A: Yeah. We're trying to be all things to all people. So the way that would show for us is we would. We would. I would hang up the phone with a large tier one nonprofit, you know, and, you know, six figure contract, no problem. Right. Like, they're spending seven figures, you know, a year on what we. What we do. So it's more of an enterprise sell. And the sales process, of course, looks quite a bit different, and the pains are different and the expectations of how you communicate that. And then I would literally take a sip of coffee, get back on the next Zoom call, and talk to the next organization that couldn't believe it was $99 a month. Like, that was. Just blows their mind. So how do you context switch between. How do you identify quickly the value drivers within the conversation, and then context switch both your marketing but also your sales and really meet people where they are and speak into that if it's just all things, all people. Right? And that was. That's a huge challenge for us in the early.
[00:05:46] Speaker C: Huge challenge for you. Huge challenge for a lot of, you know, SaaS operators out there. If you're listening to this right now and you ever had a customer tell you you're way too cheap, it's laughable. And you're way too expensive, it's laughable. Then you really got to listen in closely here, because I think a lot of. A lot of SaaS leaders see this.
[00:06:02] Speaker A: Yeah, definitely 100%.
[00:06:04] Speaker C: Excellent. All right, so what happened next?
[00:06:06] Speaker A: So we, you know, we did some. Read your book. For your book, I met you through a coaching group that part of. So, you know, obviously got a little bit of time with you through that group and then read your book and kind of got to some conversations. But really, I think the big. The big aha moment for me was I had sold a business before, so I've had a number of exits as an entrepreneur, and I've kept in touch with some of those people and one of those organizations, big private equity back group. So having a relationship with that group, I reached out and said, hey, you know, walk me through. And I had, you know, team members that were still obviously involved with that company even after it was sold, transacted. And of course, it had recapped several times. But I said, hey, is there a playbook? Like, when you buy a company, what do you do? Like, how. What's one of the. What, you know, just give me. Because I was looking to reverse engineer my m and a activity, and that's how I coach my clients is towards the goal in mind. As a purpose driven coach, my job is to kind of reverse engineer what an exit looks like. And a lot of that is the market you're looking to serve and how you break that market down, and then, of course, how you're pricing to that market. So short version, long version, you know, hopefully a little shorter. Here is identified quickly that one of the first things in these playbooks I started collecting was a price increase universally across the board. First thing they do is raise the price. And I thought, man, I'm kind of done. I think people will pay what I ask them to pay. And then my job is to work towards creating that value. And ultimately, it might be easier to land the smaller nonprofits initially. But if I can move up market as I get more confidence in my product and my clarity and my messaging, then, you know, it takes. I had literally, customers that would respond to an email say, yeah, 50,000 invoices, let's go, others. And then the next, you know, next email would be, all 500 is just too much. And I'm like, why am I working just as hard for the $500 customer? I want to help them. It's not about the money, but it's about what I'm able to do as an organization to drive the enterprise value to ultimately, you know, exit the company.
[00:07:52] Speaker C: I love that the reverse engineer working backwards from the end state or the end goal that you want, right, you. So you just break it down step by step, because there is, you know, if you think about it, it's not something that you can walk through blindfolded, but there is a certain sequence that happens in a certain process, such as being very clear on who you're serving, how you're serving them, giving them value, extracting that value fairly over time. And so when I, you know, I'm listening to this, I'm thinking like, yep, 50,000. Great. Love it. Let's go. Others are like, 50,000? Are you crazy? It probably just completely ghost you.
[00:08:23] Speaker A: Right, exactly.
[00:08:24] Speaker C: You may not even know why they're ghosting you. Right. And so how did you, how did you solve that problem? Because the context switching could just slow you down so much.
[00:08:32] Speaker A: Right.
[00:08:32] Speaker C: And it just makes it really hard to figure out what works.
[00:08:35] Speaker A: Yeah. It's very inefficient. Yeah. So, you know, and whether it's an exit in mind that you reverse engineering or whether it's your p and l, your income statement. Right. But I think at the end of the day, there's, if you have customers and you collect a list of, you know, like, your top 20% of your billings, and you just look at what's the commonality between them. You know, like, for us, it's national concern nonprofits. So nonprofits that have a larger footprint, they do some grants, but they're primarily, you know, looking to drive more individual donations or unit economics for the individuals. They're very price sensitive on acquisition, cost of new donors, in our case, for example. So that's a pain point that they have. So the conversation isn't just necessarily how much revenue I can drive for you as a nonprofit, which, again, I said this earlier, but a nonprofit is a business. It just has a different tax treatment on the profits. So the smart nonprofits run it like an organization that is fueling on cash. They're just a little bit more conscious about how they spend any excess and that they're delivering programs and services that they promise they're their donors that they're about. So it's really just identifying through the income statement or if it, you know, an m and a event for the buyer, what's important to them, and then who our ideal customer is, and then reverse engineering from there. But, yeah, I mean, just, you want a ten x. You're not going to do that. The bottom rung of your customer list, you're going to do that. The top, wrong. Right.
[00:09:45] Speaker C: You want more of those, right? You take that top 20 that you want more of, and then you just, I guess you just flat out study them, right? You just get, okay, what are the numbers?
[00:09:54] Speaker A: Like?
[00:09:54] Speaker C: What are the conversations? Like, why do they buy from you? What happens after they buy? How do we keep them happy? Like, all those things, right? And you start saying, yeah, let's let's. Let's pick these three or four things that are in common, and that's going to help us position and message better to those so we can attract those even more, close them better, bring more of them in here. So that top 20% starts to grow a little bit, uh, in terms of your overall share, if you get good at it, doesn't happen overnight, but you have to sit down, you have to crack open the, the numbers, and you have to, like, actually study it 101, right. Just really sit down and pay attention. You can't do that if you don't have the data in the first place. Right? So all those out there, I always say, if you're not capturing any information on who you're selling to, who you're talking to, who says yes or no, all those big things, you got to start now so you can even take the next step that you just said, james, and break it down and find the pattern.
[00:10:46] Speaker A: And there's so many tools. I mean, you know this. You know, there's so many tools out there that help you do this. But if you, if you're using something like stripe, there's a lot of tools like connect to stripe that will pull this data and help you understand it. I think it's really the discipline of the CEO and the leadership team, and it needs to be really the CEO's. One of the four or five responsibilities a CEO has that they cannot outsource or delegate is capital allocation. And capital allocation comes down to my efficiency in an organization of bringing new revenue, retain that revenue, and that is, quite frankly, all it comes down to at the end of the day is how much value you're creating in for who. So solve a small problem for a lot of people, or solve a very specific problem for a very, you know, subset of people and charge a lot of money for it. So there's, you know, there's only so many ways to break it down. The key is, what are you able to do? And then how is your team most geared to deliver on that?
[00:11:33] Speaker C: I love it, man. I love it. Just listening to you in the last, like, five minutes or so, it just, it just hit me. It just hit me like a rock. I mean, what you're saying, right, is that the leader's job, the CEO or whatever, the leader that is in place, if you think about having the right conversations with the right customers so you can make sure you're allocating your capital in the right way and charging them the right amounts, I mean, I'm seeing four c's just emerge just from talking to you, man. Like, you're like a walking framework.
[00:12:01] Speaker A: Yeah, exactly. What do you think I learned it from, man?
[00:12:04] Speaker C: Super cool.
[00:12:05] Speaker A: Super cool.
[00:12:06] Speaker C: No, I think a lot of folks can take that away because I think slowing down and watching for that upper echelon of the population instead of studying every single customer, I think is a big unlock for a lot of folks here. But let's take it from, from the past and let's bring it up here to the present with play. So what is working nowadays for you? What? Are you really happy that, man, I'm glad I did that in my pricing or packaging or anything.
[00:12:28] Speaker A: I think for us segmenting inbound traffic on marketing to identify, like, what is this? A lead, a subscriber? Just being a little bit more clear in the marketing side as to who this person is because I think in the early days of any startup, you're just chasing anybody with a pulse, right? I'll take any mini with someone who will return an email, but identifying upfront, top of funnel, like, who is my ideal customer and how am I reaching them? Where do they shop, work, play? Like, how do I get ahold of them? Where are they in their cycle and their journey? Understanding what that looks like. Marcus, just asking the question. And sells. Have you bought software like this before? Walk me through that experience. I mean, you can anchor on something. You were very helpful in helping us. Price anchor. I'm a big believer in price anchoring. You know, people, the first number they see is kind of the number you anchor them on. So when someone lands on our pricing and they go, holy cannoli, Batman, that's expensive.
And then they look at social proof. Well, here's some logos under the middle plan. Organizations like you. And here's an organization. And one of the fortunate things about working with nonprofits is I can pull their tax data. It's called a 990. I can literally pull their income. And the only other market that's as easy to sell into, in my opinion, is public companies, because you can do the same thing with public companies. Otherwise you're kind of just guessing, like, what is this guy's income stream? What is their strategy? Whats their plans? I sold into public companies for a while. What was beautiful about public companies is I could literally listening to last quarters earnings call and the CFO and the CEO would tell me exactly what they needed to do to hit price to earnings ratio. And then I would just sell them to that because I could solve for x. With nonprofits today having that visibility and that clarity has allowed me to be very specific with my sales messaging, very specific with my offering, and then our product roadmap has been built around that. Right.
[00:14:09] Speaker C: That is such a huge benefit. Right. I also think to a degree, this may not follow the same thing you tell me if I'm right or wrong here, but sometimes selling into governments where they have to be public about all of their quotes and what they're doing and what they're spending on could also give you that same level of transparency that is not really present in selling to other businesses. Right? Private businesses.
[00:14:33] Speaker A: Exactly. Yeah. Yeah. If you're selling into a request for price in RFP model, then, yeah. You know, the old adage in government sells is that unless you're in the room writing, because I have clients that I coach that are in B 2g, if you would, business, the government. But the joke that we have internally is like, if you're not in the room to help them write the RFP, you're probably not going to get the business because most rfps are written specific to a business offering and they go through the exercise. But someone's got, there's some horse trading going on somewhere. Right. But what's cool about rfps, and even this is true for any business, the more business you lose, actually, that's just one step closer to a yes. Right? So it's okay to get a no. The key is to understand why the no, because that just is an indication you're not creating the clarity and the value now. And so you just have another chance at bat. Right. And it sales guys, Marcus, we can bat 30% and still get in the hall of fame. Right. So it's not, it doesn't take much.
The key is to understand your customers, what their pain is. And like I said earlier, it's all about the people. You know, what is their, what is their chief complaint? It may not be the presenting problem, but what is their chief complaint? And then from there, you can double down into what the value drivers are and then charge accordingly.
[00:15:37] Speaker C: I love that. The thing is, you actually bring up an interesting thought because you said you have to understand the why behind the no. No could get you closer to it. Yes, of course. Right. But the why behind the no is interesting. A lot of folks don't ask the question. Okay. You know, you found something else. Can you tell me?
[00:15:53] Speaker A: No worries.
[00:15:54] Speaker C: Tell me why. Right. So do you have any angles where you try to get that why? Because I think sometimes folks are just kind of, I just want to move on. It hurts so bad.
[00:16:01] Speaker A: I know? Yeah. First off, you got to remember, they're saying no to the offering, not you, right. So I tell my prospects right up front, like, look, you know, full disclosure, I really want your business. But you got to be careful, Marcus, not that commission breath where you just. It just is too needy. Right. I'm okay with or without them. Right. That has to come. I have to be convinced of that personally. The first sellers in the head. Right. So I know that I'm okay without this deal. I don't have to have this deal to be okay. I don't have this deal to have a business like I am. Okay. Right. So that brings a lot of calm. It's kind of over a serenity and a release. Right. So when I show up, I can be more helpful. And then in that helpful state as a trusted advisor, I can just simply say, hey, Marcus, that sounds like you went in a different direction. Totally cool with that. Like I said, maybe that's when I share. I'm fine with that. You're saying no to me now, Marcus, but I hope you're not saying no to me in three to five years. Is it possible that we work together in three to five years? And they say, absolutely. Great. Would you help me understand? Like, if I were to show up in three to five years, what's the one thing I would have to address in my offering that you saw today that would make it a no brainer in three to five years? A lot of times we go to like, okay, well, who did you select and why? But a lot of times, that's not. That's kind of a short sighted question. They will tell you what they hope in their dreams, because people love to dream. What they want to accomplish in three to five years, because that's when the next chance at bat, like, why would I try to solve for why I missed it today? I want to know where they want to be in three to five years. And that conversation alone keeps you in the trusted advisor seat. And then, with permission, can I touch base with you a couple times over now in the next three to five years, make sure that you're being served and cared for and you go from there.
[00:17:31] Speaker C: Brilliant. Absolutely. And the nice thing about it is that there's a shift in focus here, right? Because I think the tendency is like, well, damn it, what just happened right now? How do I get the information right now? But you're looking forward. You're saying, you know, what I want to understand in that timeframe later, which, by the way, reduces a little bit of the tension, too. Right. Because people, the decision maker doesn't really want to be most of them anyway, doesn't want to be a jackass and hurt your feelings and all that stuff.
[00:17:57] Speaker A: Right.
[00:17:57] Speaker C: So they'll either say nothing or say, you know, some planet, oh, sorry. We, you know, we had to. My boss said we had to do this or whatever it is. But the framing to three to five years from now, I think, is a very, very important part of that. Of that conversation.
[00:18:10] Speaker A: Yeah. And sometimes why can put somebody on the defensive. So if my, you know, if a customer says, hey, we chose somebody else. Oh, I'm curious. Why was that? And then they feel like they have to justify their decision. Right. And it's not comfortable. People don't like conflict naturally. Right. Those of us from Boston, Mike, but those of us on the west coast don't. But where I grew up, we love conflict. I grew up in Boston, so we were always arguing what it was, just kind of what we did. So you lean into that, though, and the key as a salesperson or as a CEO in the leadership role with your team or your customers is just to reduce the friction for them to be just open with you and to say, hey, let's talk about the future. And I like it because it opens up the conversation for them. They're not saying no forever. They're just saying no for now, which is totally cool. That's their right. It's my job to be ready when they're ready to renew.
[00:18:55] Speaker C: Yep. It's my job to be ready when they're ready to renew. That is a quotable piece right there. I love that, James.
[00:19:02] Speaker A: And it could be one year, by the way. I mean, I have customers that sign a one year contract. And so if they tell me, hey, we just signed a year, we're going to sign a year contract. And I'm like, hey, one year. What would need to be true for me to sign you? Right. So if the conversation, it had to be three to five years.
[00:19:14] Speaker C: Yeah. No, even better. And actually, that's when I think about a lot of contracts being signed or, you know, the majority of them are one year or a very big portion of them. So in the year goes by pretty quick, I think. I don't know if anybody else notices here, but freaking time. We're in a time warp. I feel like every week is evaporating. One last thing on that piece, because the why is so important on the sale. Understanding the why. There was a podcast I was listening to. I think it was. I think it was Alex Hormozi. Big props to him. Right.
[00:19:43] Speaker A: He says a lot of good stuff right here.
[00:19:46] Speaker C: Alex said that the when of the no is also just as important as the why of the no. And I thought it was an interesting concept, and I thought about it a lot more and sat down. I'm thinking, like, okay, yeah, if they say no right away, you know, as you're even opening up your pitch, you probably have a messaging, framing, positioning problem going on. If they're saying no at the very last minute, there could be a, you know, maybe a risk, a risk reversal problem you have going on. Maybe they just didn't quite feel like it was in their interest to jump your way. So what do you think about this concept of the when the no comes out?
[00:20:19] Speaker A: Yeah, great point. So. And I think it comes back to our ideal customer, because when you got on a phone with, like, in my case, a tier three or tier four nonprofit, they have a tendency to really drag. Like, they're really nice, and they won't. They won't give you a fast no, they'll give you a slow maybe, which is almost worse. Right. It's so painful because it goes on for six months and you think you have an opportunity, but they're just flirting with you because they don't want to say no, and they don't. And they're in pain. They don't want to say no because of. Not that. They don't want to hurt your feelings. They are legitimately in pain, and they want it so bad. They just don't have the. It's not just even the money, it's the time. Right. It's just. That's really. Maybe what they're saying no to is the workload. Right. So it comes down back to the conversation earlier about who your ideal customer is and what the timeline to close. One of the things that we track with our company is our average sell cycle by tier, so that we have clarity into how long it takes us to win a deal based on whether it's a tier one versus tier three, and then that comes back to lifetime value. Right. So if it's a x dollar contract and takes us six months on average or the medium, I usually look at the median, not the average, then I kind of have an expectation going into it on when I should get the no. But you're right. If you're booking meetings from a meeting and you can't even get the second meeting, if you get a no at the first meeting, then you may very well have come in too heavy on, you know, features or function or salesmanship when it was really about getting the next call because you want one more yes before you get the no. You know, then again, that comes down to price. If it's a $9 solution, maybe a five call sequence isn't going to work.
But if you're talking to the customers and you have the right customer acquisition cost model. And that's why I think working with someone that whether you, for example, as a consultant or a coach, to kind of help them with that. But I think once they get that clarity, then it comes down to, hey, what needs to be true. If we get the first yes and the first sell. And sometimes the first sell is just getting the second meeting, and the second meeting is where you get the third meeting. The third means we get the close. Right? So, yeah, 100%. You know, what are they saying no to and how quickly, I think, can inform your sales process as much as your messaging and pricing.
[00:22:19] Speaker C: Golden for a lot of folks. And then it all kind of meshes well together. Right? The pricing, the messaging, the positioning, that entire sequence. Right.
You have to help them kind of walk through that process.
[00:22:30] Speaker A: Yeah.
[00:22:31] Speaker C: Those that rush to the end, can you just buy the damn thing already or they're selling to the wrong person.
[00:22:36] Speaker A: Yeah. Is your credit card. Is it a visa, Mastercard? It starts with a four or five, right? That's what we all want to do. We want to go right for the close, right?
[00:22:43] Speaker C: That's it. That's it, man. So, sales operators listening.
This is, I think, a masterclass in how to set up and close those sales. So, big lessons for everyone here today. I want to take it forward and do one more topic with you. Fast forward, where pricing is going. And I'm going to go off script for a second because I've been eager to talk to you about this ever since we had tacos at Puesto here in La Jolla.
[00:23:08] Speaker A: Yeah, please. Amazing.
[00:23:10] Speaker C: And listen, if your thing is delicious, fresh filet mignon tacos with that nice avocado drizzle, you know, I mean, go there. But here's the thing. They were in the news, James, so they were in the news for trying out dynamic pricing, all right? And I saw others trying it, too. Wendy's got, you know, smacked upside the head for trying to do some dynamic pricing because it came out the door as surge pricing. All right? Now, think about what's going on here from a framing perspective, right? Surge pricing. We are going to charge you more money because we're a bunch of greedy corporations and we want to be unfair to the little guy, and we're going to charge you more when you want your food the most. That's what it felt like. And then when Wendy's came back, they're trying to do some pr damage control, right? Basically they're saying like, no, no, no, no. We actually. We want to give you discounts and reward you during the slow times so that way we can keep our staff working and busy.
[00:24:06] Speaker A: Yeah, yeah. It's all in framing.
[00:24:07] Speaker C: It kind of falls on deaf ears after the first one. Right? But then, presto, when they got the news, when the news broke, they did the same thing, said, hey, ten to twelve before lunch is kind of slow. We're going to reward you and give you a discount if you come in. Oh, right. It's a little bit different. What's your, what's your thought on this whole dynamic pricing thing, man? In restaurants?
[00:24:26] Speaker A: Yeah. You know, I love it. So I've not done much of that, but it's interesting to me, I mean, that we, when it comes to buying gas, aren't we kind of used to gas being tied to the futures and oil? Like, we just. We drive by the gas price and we kind of like, oh, it's 547 today. That must be, you know, whatever. There must be some war going on or something. Like. Or we go by. As soon as the news breaks, we go by gas. Yeah, exactly.
[00:24:49] Speaker C: Some missiles shooting somewhere.
[00:24:50] Speaker A: Okay.
[00:24:50] Speaker C: Gas is up.
[00:24:51] Speaker A: I can't go figure. So I think. I think when it comes to gasoline, we've become this elasticity of pricing. And as the consumers, we're used to it, right? We just kind of. That's the way the world works, which is why we drive around looking for, you know, a couple of pennies off. But when it comes to tacos, man, like, you can only get presto one place, right? I'm not going to drive around town, not like you and I are going to just move our meeting the Taco bell. That's a different, different kind of experience as far as an entrepreneur, man. Yeah. And I do this, and my wife, bless your heart, she gives me so much grief for it. But about every six months, I pull pricing from my website because I'm not convinced I have it, right. And I'm like, all right, how do I get confidence in that, right? And so finally, I'm like, look, let's just run a median of what I. What I sold to and then just. That's my pricing and I'm just confident now. Right. But the reason we pull pricing as entrepreneurs is because we're still trying to figure it out and we want some elasticity in that. We want to have a conversation and they go 50,000 and we want to have a conversation and turn to 5000. We know we're going to service that differently. Right. As far as the number of people and in my case, credits and all the variable things that make up the price difference. It's not like we're gouging people, but we want that freedom to be able to do that while we're, while we price test. But as a consumer. Yeah, man, it's all about messaging, all about how you frame that.
[00:26:06] Speaker C: It's a frame all day long. Now listen to this. I mean, you made a couple of really great points there, naturally, which was, yes, we do want to make sure that the framing is right and communicating. Right. But confidence has to go up. And just like anyone's confidence, we're all human beings. Confidence goes up, confidence goes down.
[00:26:24] Speaker A: Like buy some oil.
[00:26:25] Speaker C: Exactly. And so we need ways to fluctuate that. But here's the thing, and here's my, my little thesis that I've been coming up with since I've been reading about all this is that I think dynamic pricing has been here all along. We're just not necessarily used to it. Right. And so if you think about happy hour is another form of dynamic pricing, it's cheaper, you know, from whatever, three to five than it is.
[00:26:46] Speaker A: Well, you've always done that.
[00:26:48] Speaker C: Right? The same ribeye sandwich at dinner is more expensive, but it's cheaper during lunch. Right.
[00:26:54] Speaker A: Lunch, fortune.
[00:26:55] Speaker C: Right. And then there's all these key things. And so you're seeing there's Valentine's Day. Why is it so damn expensive to get a plate, right? And so I'm finding that dynamic pricing has kind of already been around for some time, but in just these different forms. But when you walk, you know, walk up and say, we're going to charge you more during a period of time when you're hungry and you don't have a lot of optionality, say it's the only restaurant near you, then you get this perception of unfairness, right.
You're sort of sticking it to me and then shifts the focus away from what's really going on. So I think if restaurants are going to start doing this or even others, like from a dynamic price point perspective, I think it's much better to frame it as a reward than making it risky on them that they're going to pay a bunch of money. And so that could be like, hey, if you do these behaviors, these conditions, or these things, we actually will reward that and give you a discount or give you something there, and then it's a win win on both sides.
[00:27:46] Speaker A: Yeah, and. Exactly. Marcus. I think it comes down to framing. Like, in my case, we have this concept of committed revenue and we have to be careful because sometimes that will blow a deal or confuse the customer and they'll want to slow it down a little bit. But in my world, if I prepay for like, for example, text messaging credits, if I know you're going to spend 5 million this year or 10 million text messages this year, I can go lock in and negotiate a contract with my direct to carrier network that we use. I can go and negotiate a better rate and then pass that savings off to you. But I'm under contract, so. You're under contract. Right. And as a startup, especially in my case, I typically bootstrap both my clients and myself. I'm not going to. For capital efficiency, there's no way I'm going to lay out money from my coffers and fund your discount. You got to fund that, right. So it's prepayment. So it's committed through contract and then committed through revenue. So when, I think it's how you frame that up front, but yeah, if you wait till midnight the day before the biggest fundraising day of the year, and then you want to get our team on the phone for last minute strategic training and buy the credits, at the moment, you're going to go with what we call pay as you go pricing, or we're going to call it emergency onboarding or whatever, it's on the way, you frame the thing. But that comes from a place of relationship and trust. Right. It's hard to do for a taco place, I get that. But in the SaaS world, it's all about trust. And if they're going to buy from who they know, like and trust, then up front you say, hey, here's how the pricing works, here's what it's like, and you decide what's best for you. But yeah, absolutely, if you want to pay as you go. I'm literally not able to discount at this point, and I don't like discount in any way. I think that cheapens the service, but I'm not able to negotiate. I frame it as a negotiation. I'm not able to negotiate a better rate for you unless you're willing to commit because that's the way commitments work.
[00:29:25] Speaker C: That's right. And then being straightforward, that transparency leads to trust. Right.
[00:29:29] Speaker A: 100%.
[00:29:29] Speaker C: And that trust leads to relationships, which is really where subscription is kind of an embodiment of that relationship. So, really smart all the way around, man. So we talked about getting sharp around your customers or identifying that pain. We talked about really getting behind the why in the no. Of the sale.
[00:29:45] Speaker A: Right.
[00:29:45] Speaker C: We talked about framing and messaging in order to really help you nail the right model, gain confidence in the model. You're just, again, you're a walking book. As a matter of fact, I think you have, like, two of them, right?
[00:29:56] Speaker A: That's right. Well, one publish, one comment. Yeah. Yeah. And I think, you know, and I think the key is just we're success as a service, right? And this is why I tell my clients, coaching, you have the solution, they have the problem. Provided you're clear on their problem and you're clear that you do, in fact, have the solution, that should give you a ton of confidence. Then it just comes down to work with you, Marcus, to identify, are you solving a nickel problem or a ten dollar problem? Because there's a difference there, right, both in time and overall capital allocation. So I think that if I'm, if I have clarity as an entrepreneur, that I'm solving big problems for the right people, then just, yeah, give yourself the confidence to just put your pricing out there and then. Long pause. There's discomfort in that moment, but they're thinking about what you just said when you present pricing. They may not be thinking, man, I wish this was cheaper. That's what you're thinking, because you're worried about it, but they're not. They're thinking about, man, how am I get this approved? Because I really want this. If you framed it properly in the front, run inside that. So, long pauses.
[00:30:50] Speaker C: Long pauses. Yes. As uncomfortable as it could be. You can even practice that with a friend of yours. Just sit there. Just do some long pauses. Just kind of see, get used to the uncomfortable silence. Right?
[00:31:01] Speaker A: Roleplay. That's right.
[00:31:02] Speaker C: Excellent, man. Listen, you were phenomenal today. I think folks learn a lot. I do have one final question for you. Is my favorite question of all, and just for people understand James a little better, why don't you tell us your favorite music, your favorite jam growing up, what was your favorite song? Brings you back, always puts a smile on your face. You could play it on repeat. What's that favorite song of yours?
[00:31:22] Speaker A: You know, I was going to say money for nothing by dire straits, just because of the nature of our conversation, because, you know, I thought, you know.
[00:31:28] Speaker C: How appropriate I propose, but I'm like.
[00:31:31] Speaker A: Well, I don't know if that's true. I just. Mister convenience, you know, I'm a. I'm a Def Leppard guy growing up, so I'm in the eighties. Date myself here a little bit, but def Leppard, AC DC, all that. In fact, my teenager who turned 19 this week, actually, and I are going off to see CMA concert in a few.
[00:31:48] Speaker C: Oh, my God. They're still playing.
[00:31:50] Speaker A: They are still playing. I'm so excited. Yeah. So anything. Yeah. If I play anything in that. In that genre, I'm excited. I'm easily motivated.
[00:31:59] Speaker C: I could just see you there. I can see the hair, the shirt. I could see the head behind me. I can see it all, man. Listen, thanks for my. Thank you for coming in here and dropping the knowledge for everybody and also just all around, just sharing what you know because you know a ton. So, ladies and gentlemen, James Martin, Sr. All right, team, listen. Take these lessons forward. Now, the idea behind this is that you can listen, you could be a standby, or you can actually apply these and get the results. So whatever you learned today, apply it next Monday, see if it works, and come on back for another episode. Try to grab something there, apply it, see what works. That's the motion we want, and we want you to move away from that guesswork, all right? So remember, stop guessing and start growing. Until next time, thank you and much.
[00:32:50] Speaker B: Love for listening to the street pricing podcast with Marcos Rivera. We hope you enjoyed this episode. And don't forget to like and subscribe. If you want to learn more about capturing value, pick up a copy of street pricing on Amazon until next time it.
