Is Your Business Healthy? Your Pricing May Have the Answer with John Gilbo

0:00Pricing is a great thing to look at the health of what you're doing. Uncover the processes. I still talk to a lot of people that use Excel only, or they've had a pricing solution in place for the last 10, 15 years, and they haven't looked to enhance it. Just like anything, look at it with fresh eyes. It could be just a process thing, not needed with software. It could be not a big spend in terms of a consultant or a strategy change. It's really about almost like doing a health check as it comes to pricing.

0:51Today's podcast is sponsored by Jennings Executive Search. I had a great conversation with John Jennings about the skills needed in different pricing roles. He and I think a lot alike. If you're looking for a new pricing role, or if you're trying to hire just the right pricing person, I strongly suggest you reach out to Jennings Executive Search. They specialize in placing pricing people. Say that three times fast. Welcome to Impact Pricing, the podcast where we discuss pricing, value, and how buyers decide. I'm Mark Steiving. I help companies turn hidden value into willingness to pay. Our guest today is John Gilbo.

1:29Here are three things you want to know about John before we start. He is the sales director in North America, Australia, and New Zealand for QuickLizard. New Zealand happens to be my second favorite country in the entire world. He's led pricing at Kirkland's Academy Sports and Outdoors and Safeway. He's worked extensively in pricing technology. And the thing that I find most fascinating is he's an endurance athlete who's done many marathons, two Ironmans, and he's escaped from Alcatraz several times. Welcome, John. Thanks, Mark. Good to be here. Okay. Easy question. How'd you get into pricing?

2:06Yeah, right out of college, I got started with Safeway in the Eastern Division, located in Maryland. and I was an entry-level backstage corporate employee for pricing groceries. So I did everything from execute, manually keying promotions into be effective, updated cost changes, kind of master data management around pricing, and then took it from there. So grunt work to begin with. But you actually started out in pricing, which is kind of cool. I did. I didn't know what it was the first day I got there, but I figured it out. Well, and when I first started in pricing, people asked me, did you have one of those guns?

2:42And so did you ever have one of those little price guns where you got to put the prices on things? I didn't have the price gun, but our ads broke on Wednesday. And when I'd come in Wednesday morning, if the light was on my phone for a voicemail on my phone, you'd come in the old school desk phone and you'd see a light. I knew I had voicemails and I knew we probably had a pricing error that I had to go figure out. And if I picked up the phone and I had 30 voicemails. It was going to be a busy day if it was maybe one or two. Pretty easy. So no gun, but the old school phone. So that's pretty cool.

3:17That's pretty cool. So one of the things you said that you wanted to chat about, I always ask my guests what they want to chat about. And you had mentioned sustained value. I have no idea what it is that you mean when you say the word sustained value. So let's define it and then we'll, we'll figure out how to talk about it. Yeah. I think for me, when I put that in the topic, what I love about pricing, I now sell pricing. I'm an advocate for leveraging pricing, enhancing pricing, whether it's tools, strategy, people, process, just unpeeling the onion, is it's a great way to drive sustained value.

3:52It's a great investment, in my view, in time. You're trying to optimize what you already have through more intelligent, more efficient, faster reaction to whether it's competition, cost changes, tariffs, if you have smarter models, elasticity. So I like it because it can be a strategic weapon to drive real value and real margin, real revenue to teams. So that was the reason I put that in there. So when you say the word sustained value, you're really saying value to, and I'm going to say the word retailer, if that's okay. It's perfect. Right. You're really saying value to the retailer. Yeah, correct.

4:29And potentially the customers as well. If your strategy is to be very competitive in your price and making sure your prices are low. So if you have regulations that are needed to be filed, state, sometimes there's, if you're familiar with WIC, Women, Infant, and Children rules, or other state regulations, you might have to make sure you're priced in a certain way to be able to meet the demand of what that regulation's calling for. So really valuable. Yeah. Okay. And so it's kind of interesting. I just now realized this. You grew up in the world of B2C, essentially. So you're pricing products for consumers to buy.

5:08Right now, you're living in the world of B2B. I sell B2B. Right. You're selling to retailers, I assume. Correct. Retailers, direct-to-consumer brands, some B2B players, depending on how their pricing go-to-market strategy is. But yeah, primarily those that are selling to end consumers. So it's interesting because when I think of the word value, I almost always put it on the side of my customer. Right. How much value is my customer getting? And so I can see why you would say sustained value for retailers because that's your customer. That makes sense. Right. Yeah. Pretty cool. And so I'm trying to decide if I want to go down the consumer side or the B2B side.

5:48Let's go down the - Either way, when I first came to the selling of pricing, I started off at price effects, which is primarily B2B. And so that brought me into the world of CPQ, rebates, different ways of looking at pricing waterfalls. So, you know, I'm not as dangerous in the B2B world, but I can speak a little bit to it. So whatever you like to go into. Yeah, but the key is you are living it, right? I try. I try. Yeah. So I'm going to ask you about your sales pitch. Is that okay? Okay. Perfect. How do you sell to retailers? Right. So I love the concept that says sustained value. And what you have to do is communicate value to retailers.

6:35Correct. Yeah. What does that value look like? What does that conversation look like? You know, generally I get into, I try to have a conversation with them first about some of their processes, how they go to market. Are they primarily selling through everyday pricing, meaning not a lot of promotions, not a high-low retailer. So you think of a Walmart-esque retailer, their everyday prices are very solid and infrequent promos versus some grocery stores that may be more high-low. So I talk about just their go-to-market. Are they heavy promotional? Do they have seasonality and one-time buys around certain products?

7:13Or are they going to have markdowns? markdowns end of year if you're selling apparel footwear widgets that are seasonal winter coats different color lines markdowns can be a huge drag on margin and they're a lot of work to manage so i just try to understand how they go to market to their end consumer from a pricing perspective and then i just try to come i truthfully just come to be a problem solver and i'm honest with them about if I think we can help, I'll try to continue conversation, set up more calls. If I don't think we can help, I may bring in one more meeting, but then I'll be honest with them and say, hey, look, either they're not complex enough or they're, you know, sometimes they only sell a few SKUs or their revenue's not enough.

8:00They don't have the team in place. I'll just be honest with them that there's a gap for what I think the cost versus the value would return. So try to be open and honest and not pushy at all. Nice. So I'm going to tell you what I just heard. One of my favorite lines or sayings is value is the result of solving problems. And one of the things I heard you say, which I loved is, hey, I'm just going to go in and figure out what their problems are. Yeah. Right. What are the issues? And then we'll see how we can solve them. And I assume we say, look, if we could solve this, here's what the result looks like.

8:33Are you turning that all the way into incremental profit in the sales call? as in you're helping them say, here's how much money you can make if we do this correctly? Not in the first call, but I will. I work with them to give them, I like to give them ranges for an ROI. I like to give them some of what consultants will say pricing will get, which is the high end. And then I like to give them in bands of what we've done historically. I like to give them break-even numbers so they can see, look, here's what you've got a hurdle. And then I like to have a nice dialogue about the deltas there. And it helps, I think it helps clarify for me, is it something they should continue?

9:14Is it something that I think has a ton of potential? It's not uncommon for us to see 20, 25 X ROI from our platforms, but I don't always go in day one with that number because that can come off as salesy, right? So I just try to show them like, oh, look, this is, you don't have to do the Ironman on your first race. You can do a 5K, right? Let's just do the 5K as an example. So I'm going to tell you a quick story that hopefully resonates with you. And you can tell me a story back that's the same. And that is many, many, many years ago, I was in semiconductors, went to work for a company. They really needed a new pricing system badly.

9:52And I went in and I'm quoting, look, you know, we're going to get 5 % of our revenue and just pure profit. And I could not convince the CEO to buy this thing. I failed miserably. And then a couple of years later, I'd gotten a mentor after that. He came through and told me all the things I did totally horribly. And then I found another job several years later, similar situation. But this time, instead of going in and saying, hey, we're going to make five times revenue or, you know, 5 % of our revenue back in profit, I went around to every person that cared and figured out what their problems were with pricing.

10:24And I was able to quantify, hey, this is costing us this much and this one's costing us this much. and I went in with specific problems back to the leadership team and they're like, oh yeah, we got to get this. And it was such a different scale. Yeah, it's perfect. It's like you're bear hugging or 360. You're doing the 360 approach to the blockers or the advocates for moving forward. And it's a smart technique. And honestly, I don't always do that, not because I don't want to, but you forget. You try to do everything as a salesperson to do everything correctly, but sometimes you miss do that. But that's a great approach.

10:58You want to hit the IT teams, the CFO group to talk about, you know, the ROI, the business teams, the merchants. You want to cover off on all of that. And it's, one, you can't always get access. But two, you forget like you're human, right? Right, right. Well, so it's so funny because you looked at that. You looked at the story I said and said, oh, it's the 360 technique. First off, I've never heard of that. But secondly, I looked at it as I was quantifying value, right? I was finding specific problems and making it believable to the executive team that there's real money to be had if we buy this thing.

11:35It's good. Smart. I thought the problems were the thing that I was keying off on there. Yeah, I love it. How is it that you get a 25x return or ROI? I mean, that's just insane, isn't it? Yeah. What's nice about my current role is we are aggressively priced. We're built differently in how we price our product, number one. But number two, in some retailers, the lift in revenue, because their margins are pretty thin, you can have a pretty nice impact on their margin line. So we come in with an aggressive, not only annual subscription, but implementation cost. And we want to be a long-term partner with them.

12:16We want to grow. We want to eliminate the barrier to entry, if you will. And that first year can be a lot. We figured out a way to tighten that up, not just for the first year, but going forward. And it really benefits our clients. So we try to come in with, you know, aggressive pricing that is not a blocker for them to move forward. Other reasons, you know, there's always other reasons. They could have other projects going on, new warehouse, new ERP system, store growth, whatever it is. there's always a million projects to compete with. Might not be the right time for whatever reason, but we try to, you know, I can control pricing.

12:53And it's one thing I like to try to bring to the table and try to make a non-factor when I'm in a nice sales cycle with a partner. Yeah, well, 25X returns feels, just knowing that, you're not pricing enough. Yeah. Right, you need to charge more. Don't tell my, yeah. Talk to me about year two, right? So year one is, you know, everybody's loving this, right? Because we just, you know, we just took 5 % gross margin and made it 7 % gross margin. Wasn't that just freaking amazing? Yeah. Year two, I start at seven. You're not delivering me anything, right? I'm at seven at the end of year two. How do you keep them knowing, believing, liking the fact that you're still delivering the same 2 % that you were before?

13:43Yep. Yeah, it's a good question. So we've got ways depending on how retailers tackle their problems. They don't hit everything all at once. So as an example, if you were a company that had, let's say you're an apparel and footwear retailer and you have some seasonal goods that have marked down and then you have a lot of one in one out products. So maybe, you know, you're bringing different colors or different styles in that will be living for four or five months. The first project we may tackle for you is helping solve your markdown efficiency and more smartly price your markdown. So if you were to take a vanilla spread of, hey, the shoe isn't selling, let's mark it down in our chain.

14:27Well, some stores it's selling well, you don't need to mark it down at all. Some stores you should probably take it deeper sooner because it's not selling at all. So getting more granular, using sell-through data, reacting quicker can really provide a huge benefit. So in some cases, we start with markdown. We haven't even touched their everyday pricing or their promotion yet. So you start with a project, solve markdown, build some trust, get the team on board. And sometimes all category teams won't go at once. So it's a process where you're bringing on the early adopters, getting some things moving.

15:02And then depending on how they go after it, there could be AI involved in, we've got rules-based pricing. We've got the ability to configure models for them specific to their challenges. So we're always, and this is where the sustained value comes in, we're always looking at what's next. And sometimes it's not just taking the five to seven, the seven to eight. I'm working with a soon-to-be client they're fearful their market margin is going to go down three or four percent in the next year their goal is not to go up their goal is to only go down one or two and they're calling it beat the market so if their margin deflation or reduction can be a little bit better than the market they're going to be happy so it really just depends on objectives at that point and how we can help.

15:51But it's one of those things that, you know, again, pricing, I got into it as a niche a long time ago. And it seems like every year there's a new challenge that we help solve. And, you know, tariffs didn't exist when I got, they did exist, but not at the level. And that alone, solving that and helping companies with that was a new wrinkle that, you know, wasn't planned for the year before those got started. So fun times. Since you bring it up, how do companies handle tariffs? Do they just say, hey, it's costing me 25 % more, I'm going to raise prices 25 %? Some do, some take it even more. So some retailers will maintain the margin percent.

16:30So if you receive a dollar increase, you've got to take it up more to maintain your margin percent. Some are just passing the dollar on. Some are not taking a peanut butter spread approach, but they're getting more granular into whether it's items, right? Top moving items. They might not take the full amount and pass it on to slow moving items, things that are less elastic. And same with clients, you know, keep your best clients happy. Maybe they're not taking as big of the tariff pass through on those clients and passing it on to the ones that are maybe not shopping as frequently. So multiple tactics, and it really depends on their strategy.

17:09What we'll help do is automate when those tariff changes come in. A lot of companies are unable to react to those fast enough. And instead of margin gains, it's really avoiding the margin leakage that's been happening. The volume of cost changes due to tariffs, a lot of companies have been able to keep up with that if they're using spreadsheets or manual methods. So do you act as a consultant and help them go through these as we sell this? Or do you have an implementation team that acts as a consultant? Yeah, we do have an implementation team. And what's nice about QuickLizard is the implementation team from day one is with you.

17:49And from the life of the contract, you have a customer success manager that can help with the consulting side of, I would say more around how do you leverage our platform, how to set up strategies in our platform, how to get the most out of the platform. We don't do, I wouldn't say we're like a strategic consultant in the classic sense, but there are some ways we've helped, you know, companies think about how to set up the rules and strategies to gain margin. So when you think about tariffs, what you're really saying is, you tell me the strategy you want and we're going to help you implement it.

18:24Correct. Yeah. And we'll forecast that impact for you. So you can do, if you're unsure, you can run some what if forecasting scenario planning and things like that. Nice. And so almost everything we've talked about, we could do deterministically, right? Pre-AI. What does AI do for you? Yeah, for us, we have a couple buckets in our world. We have models that we use to help set pricing. So we have seasonality models that can help drive pricing, elasticity models. We can configure models around almost any dynamic attribute. So if you wanted to say inventory is a dynamic attribute that we want to use to drive some pricing out of, whether it's we're low on inventory and it's selling well, bump the pricing up or vice versa.

19:13We're not meeting plan. We're falling behind our sell through rates. Trigger a promotion. Trigger a regular price change. Trigger something to drive pricing. So we've got the model side of it that is highly configurable for our clients. we've also what's great about what i've learned since i've joined we spend a lot of our internal capital making our product and our processes better through agentic tools and in ai whether that's helping with the product roadmap helping qa bug fixes building internal processes to make things faster and or which includes our implementation so one of the reasons our implementations are faster and not as expensive as in the past.

19:58We have a lot of agentic tools sitting on top of that process to streamline it, to find errors. And data is always an issue when we receive data, like that can be a slow point in the process. And we've used it for really, you know, turbocharging implementation. And then the third one is in the UI. We have some natural language, agentic capabilities in there. And we're enhancing the UI with more and more every day. So that's kind of the core of almost like a three-legged stool is the way I explain it to our clients. And again, it's highly configurable for you. So here's what I wanted you to say.

20:37I wanted you to say, yeah, we have AI. Tell us which products to test pricing on so we can see what happens so that we can make better predictions in the future. We can help drive that if that's the target. Generically, those models, when I said those models can enhance pricing, we can, we use AI and we also scrape competitive scrape data. We use AI and finding similar matches. We use AI to help, you know, call out which items should be promoted, maybe pull those off. So it really depends on the objectives of our clients and how we leverage it at the end of the day. But yeah, that's one that would be a classic use case for us.

21:17Pretty fascinating. In my mind, I don't do much B2C work. Occasionally I do. And when I do, I'm always thinking there have to be 5, 10, 15 different types of customers who buy in different ways. And that's probably what's driving this predictive behavior or predictable behavior. And so if we just talk about groceries for a second, right? I'm watching the price of mayonnaise at Safeway versus the price of mayonnaise at Raley's. And does that drive my store choice? Does that drive whether I buy it this week? Does that drive the quantity I buy? And different people behave differently. How do you put all that together in a model that helps predict what's about to go happen?

22:04Yeah, for us, that's one of the more complex factors to consider, right? But if you've got, if like a Safeway would have customer level data and they can segment their clients into groups. So, you know, you might call it, you know, tier one or best shopper or whatever. And they may come into the into the store, let's say, three times a week and spend X amount of dollars. And, you know, you want them to be loyal. And then you have the other tail, right? A lot of customers that come in once a month and grab a sandwich or once a month and grab just a couple items. we would wait you know and a lot of companies would wait those loyal customers with a little bit more you know you put more weight behind how we would price for them and the decision making around how you would merchandise for them and how you would whether it's pricing whether it's assortment whether it's you name it it's the full process for how you want to take care of those loyal clients and we can do some things around if clients have customer segmentation that we can bring in and use that as a factor for our models for sure.

23:10So it's another feed that we can consume. It just seems like a fascinating problem to me. It's fascinating. You can get into the weeds. In a prior life, I worked in this space and you can kind of just go down a rabbit hole and never come up and you're slicing data, slicing data, slicing data. And you forget what question you were asked at the beginning and then you got to come up for air. Yep. Excellent. John, we're running out of time, but let me ask you the final question. What is one piece of pricing advice you'd give our listeners that you think could have a big impact on their business? You know, I always think it's one of those things, you know, teams do, they look at health of categories, health of business.

23:53Pricing is a great thing to look at the health of what you're doing. Uncover the processes. I still talk to a lot of people that use Excel only, or they've had a pricing solution in place for the last 10, 15 years, and they haven't looked to enhance it. Just like anything, look at it with fresh eyes. It could be just a process thing, not needed with software. It could be not a big spend in terms of a consultant or a strategy change. It's really about almost like doing a health check as it comes to pricing and dig deep because again back to your question at the beginning what is sustained value you can really drive a lot of value out of pricing and if you're curious about what's going on you know within the your four walls and specifically the pricing i think there's there's a lot of money to be made for companies and and what i've found is you usually reinvest that so it's you know back to the you had talked about earlier value for the customer usually when we reap some value in based on pricing, we'd reinvest it in a category or a set of stores and, you know, try to take care of something that was out of alignment in the other way.

25:05So having that health check, having that regular process review, I think is super, super healthy. Yeah. If you don't have margin, you can't reinvest. Yeah. Yeah. So, John, thank you so much for your time today. If anybody wants to contact you, how can they do that? My LinkedIn's great. And if you click on my contact info in there, you'll see my email, my phone number's in there as well. So you can either hit me with a DM on LinkedIn or you'll see that info sitting in my cell and personal email as well. Perfect. To our listeners, thank you for your time. If you enjoyed this, would you please leave us a rating and a review?

25:39And finally, if you have any questions or comments about the podcast or if you want to see value through your buyer's eyes, email me, mark at impactpricing.com. Now, go make an impact. Thanks again to Jennings Executive Search for sponsoring our podcast. If you're looking to hire someone in pricing, I suggest you contact someone who knows pricing people. Contact Jennings Executive Search.