Stop Selling Hours. Start Selling Value with Florence Brunet

0:00Be customer-centric, knowing who are your customers, your segment, what are their main needs, because it's so much easier then to take the best decision when you really know where you can create the value for them.

0:30Every year, the best pricing and commercial strategy minds in the world find each other in one place. This November, that place is Amsterdam. EPP is celebrating 20 years by bringing 1 ,000 pricing and RGM leaders together for its global summit, November 17th and 18th. If pricing is your profession, this is where you belong. Register at pricingplatform.com. Welcome to Impact Pricing, the podcast where we discuss pricing, value, and how buyers decide. I'm Mark Steiving. Our guest today is Florence Brunet. She is Pricing Director and Head of Group Pricing Performance at Equans. She has more than a decade of pricing, strategic marketing, and revenue management experience in several companies.

1:20And she's speaking at EPP Pricing and Revenue Growth Management Summit in Amsterdam. and she's going to talk about price transformation there. All right. Welcome, Florence.

1:32Florence Brunet: Thank you for the invitation, Marc. So, yes, I'm very happy to be in Amsterdam to talk about Requence Transformation. So Requence is a very new company created five years ago. And so it's very exciting to create the pricing function within this company with a lot of challenges about transition. so energy, digital, and industrialization transition. And of course, there is a lot of challenges as a pricer because Equans is new. At the same time, it's a very decentralized company. So decision is made at a very low level. Each agency can decide its own strategy. Before we jump into Equans, Before we jump into equines, I have to ask the really important question.

2:24How did you get into pricing? Oh, it was really by chance, I don't know how to say this. I think my first job, I was doing pricing without knowing it.

2:39Florence Brunet: I was doing a cost plus. So I have a cost and I add the margin and we give a price to the regions. But I didn't know it was pricing. And then I came to telecoms, and there I learned a lot about pricing, willingness to pay, elasticity studies, things like that. And that's where I really began to be a pricer, I think. Nice. And so at eQoins, you guys do big projects. And it feels to me like when companies are doing big projects, cost plus just makes a lot of sense, and so many companies rely on it. first off, how do you do value-based pricing for a big project? And secondly, how are we going to get the company to shift that direction?

3:27Florence Brunet: So, of course, we have an engineer culture. So, of course, this is the Bible for pricing. But then I try to give them other point of view and a way of calculating their price to be more confident with higher prices. so first of all I try also to explain that they can use data just to have a more competition price to be more confident with the level of price that they can propose to customers and then of course I explain that the cost plus is just to cover our risk and just to be sure that we cover our cost but there is another thing that customers are buying and it's value And so instead of selling hours of technician, engineer, and instead of selling equipment, here we talk about what we create for customers.

4:27Florence Brunet: And of course, it's really a different message. And the customer won't never say the value is too much or not enough. And because customers say, okay, the price is too high. but when you explain them what value you are creating for them, then the way of selling is really different. So it's not so easy because it's not so easy for them to have this value message. But I'm trying to convert them to this. Okay, so see if you can convert me. First off, I understand how easy it is to figure out what our costs are. I mean, even though all of our costs are going to come in the future, we're still making estimates.

5:11Here's how many hours we think it's going to take, or here's the equipment or materials we think it's going to take. So we're making estimates on our costs, and I want to make sure I cover my costs. So here's the hard question. How do I make estimates about my buyer's value? How do I decide what value they're actually getting from my product?

5:30Florence Brunet: Yes, that's the most difficult part. What I ask them is to ask questions to their customer. and just knowing what are their issues, how much pain they give them and how they can value this pain is part of the answer. Because when you do, for example, I don't know, a building renovation, you know how much the building was consuming in terms of electricity or CO2 tons. And then you know that with your project, they will gain, they will have less costs on electricity, for example, and you can calculate this difference in value, and then it can be part of the value created for the customer. And it's easy to estimate when you know what exactly is painful for the customer.

6:23Right. And so what we want to do is figure out what the customer's big problems are, and then help them quantify them and figure out what it's worth when we solve those. And so I get that completely. but let's say I'm building a building, right? And so you can make my building more energy efficient, but that's like a tiny, tiny piece of building the building. I would, you know, I'm going to spend a gazillion dollars buying a building and I don't even know how much it costs to buy a building.

6:52Florence Brunet: Yeah. So in that type of issue, we can have different scenarios saying, okay, we can build perhaps the cheapest building, but if you want to have a CSR consideration, if you want to be self-sufficient, then we have this other scenario. Perhaps it's not the cheapest one, but in this case, within, I don't know, three, four, five years, your ROI will be better. So it's also an investment, of course, but in front of that, you will have different value. and if we show you that you can have a very simple building without any technology or things like that, but on the opposite side, you can have a better way of monitoring your building, perhaps we'll be interested.

7:43Florence Brunet: But we show you how much value we create in each scenario and we can also, I don't know, propose you to visit another building that was built with this technology, for example, and it will show you concretely what the value is. Nice. Are you concrete? Okay, so I'm sure, I'm absolutely positive that you walk into an engineer's office and you say, hey, we want you to ask more questions and then they just do it for you. That's so easy. We have to, so I work not with the purchasing team, for example, just to challenge the engineers on the way they are selling their offer. And it's really helpful because the buyer will say, okay, we need this as a proof of evidence.

8:32Florence Brunet: We need this. And it's very helpful to understand. And then they say, okay, but we don't know what the customer really wants and we are not clear enough on this topic. And then it's easier to give them a list of questions that they should ask for each type of project. And then we try to ask this question. And those questions are all value-related. What's the pain? What's the problem? Not technology or product-related. They already know. They already ask the technical question. The only thing they need now to develop is more about value. Okay. I find it easier to solve the problem, as in provide the right technology, after I understand what the problems are, work, than try to say, what were the problems we solved with the technology we just gave you?

9:24Florence Brunet: Yeah, it's a reverse way of thinking, because most of the time people say, okay, here is our solution catalog, and we can do everything, but it's not perhaps what the customer needs. So reverse the possible need, and then adapt to what they will need. easy, but it's worth it to do this, to reverse this way of working. Yeah. And so what techniques or tricks do you use to help build confidence in your engineers that they can get a higher price, that they can talk about value? So I use many tools. So I'm doing a lot of workshops because they need to leave it completely. They can do as many webinars.

10:13Florence Brunet: They don't leave it. It's difficult. and then so there are many ways so I've created the value toolkit where they have all the things that legitimate them to try higher prices with value objection how they can also estimate the value then also I have added more scoring that helps them to say okay in this context I can hire because they will be more confident because they figure the net margin they can reach. If there is less competition and things like that, then it's easier, of course, to have higher training. Nice. And so what kind of resistance have people pushed back on you with? So most of the time the most They have internal and external objection.

11:18Florence Brunet: Internal is probably we have too much, too high SG &A. So we can't be competitive compared to small companies. It's also if we raise our price, we lose customers, we lose volume. They also say that they are not salespeople. so they don't want to seem squeaky and things like that. And so most of the time, I always have the same answer. And of course, the competition is too high in my market, so I can't get more price. Yeah, it's hard to get competitive pricing in large project-type business to see what's happening there. But have you gotten any big surprises as you do these projects? Anybody just shocked you?

12:11Florence Brunet: Sometimes, so I also ask them to know what the scoring of this deal is really. Because sometimes, of course, as we are premium, our price is higher back. As we have a lot of CSR points and things like that, as we are very engaged in this type of ESG and things like that, So we gain more points because we were cleaner than our competitors. So it's part of the value because it's not only the price and what we are providing, but when we are able to explain what we are as a company and how we treat people and how we respect the law and things like that, of course, it's very important also for customers.

13:00Florence Brunet: And sometimes we are very, yeah, we are not the cheapest, but we win because of this. Yeah, and that gives you the ability to actually communicate your value, right? You're selling the value of what you do, which is amazing. And we try also to be very engaged locally. So we show also the team that will work for the customer that are very local people. We also try to work on all the ESG part because it's part of our offer. It's not only the technical part that is important, but also what we are doing globally. Nice. So I'm going to reverse the story for just a second. And you may or may not understand this or have an opinion about this, but you're taking your company and trying to get them to move away from cost plus into value-based pricing.

13:57there's a gazillion fast companies out there today that don't do cost plus because they have no costs and now they're adding AI and they suddenly they have costs and so many of them are shifting to cost plus right they're shifting to pricing their tokens instead of pricing the value of what they have do you have any advice for these companies or any thoughts for these companies

14:23Florence Brunet: I think so It really depends on the context that using, I think, different methodologies is very interesting because, of course, we should cover our costs. It's the bare minimum. But taking into account the context and the value we're providing is also important. So I think this balanced approach with two or three methodologies is very important just to be sure that we don't miss anything and that we have these different approaches that will help us to have the best price and to be confident with this price. Yeah. So let me ask about individual jobs for a second. What do you do? This is true for the AI companies, and it also should be true for you, but you bid and you assume you've estimated your costs, and I'm going to say the costs were estimated to be$1 million.

15:18And so we bid a$2 million project and the cost actually came out to$2.1 million. But that was one project. And over time, we actually make profit on all the projects, right, on average. So do you guys look at the average profitability or does losing money on a single project just throw everything into Haywire?

15:41Florence Brunet: So we follow two main KPIs. So the first one is the difference between the margin sign compared to our strategy. And this one is very important because we don't allow so much to lower our prices. And then there is a second API, that is how much we realize compared to margin sign. And so we have created a cockpit to monitor what is happening during the project. because, of course, it's not a simple line and sometimes the margin decreases and it decreases. So we also try to train people to gain more margin during the project by adding additional work, for example, by doing claims, things like that, and really to challenge every day what is happening because, of course, if we don't manage the contract very well, we will lose margin of the contract.

16:44Florence Brunet: And of course, we also deal with all the inflation risk and the exchange risk. So we try also. Yeah, you guys have all, once you bid a price, you have all the inflation risk. So that's pretty tough, pretty tough. All right. Florence, this has been a lot of fun, but I want to ask you one final question. What is one piece of pricing advice you would give our listeners that you think could have a big impact on their business? I think it's really be customer-centric, knowing who are your customers, your segment, what are their main needs, because it's so much easier then to take the best decision when you really know where you can create a value for them.

17:29Florence Brunet: So segmentation. I absolutely love that answer. We should all be customer-centric, right? We should all be thinking about the buyers before we do anything else. So, all right. Florence, thank you so much for your time. If anybody wants to contact you, how can they do that? So they can contact me in LinkedIn and I'd be very happy to answer them. Nice. And we'll put the URL in the show notes. And to our listeners, thank you for your time. If you want any more information about this podcast or about pricing in general, or if you'd like help seeing value that your buyers can't see, feel free to email me, mark at impactpricing.com.

18:09Now, go make an impact.