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  • Episode #0122 -

    Episode #0122 -
    2026/03/26
    TIME-STAMP NOTES: [00:00] Introduction: CEOs Under Cost Pass Through Pressure [01:44] Cost Pass Through in Highly Volatile Markets [04:04] Cost Pass Through Must Be Disciplined, Not Reactive [08:20] Cost Pass Through Without Losing Customers [10:48] Conclusion: Pricing Is a Team Effort [00:00] Across Australia this week, fuel prices have jumped up sharply again. In Sydney and Melbourne, for instance, we've seen increases of 30 to 50 cents per litre in just a few days. And outside the capitals, the gap is even wider. In regional areas, for instance, prices are like two to six cents higher on average, and in some remote locations, 30 to 50 cents more again. [00:30] And it's not just price; we're now seeing supply disruption on a huge scale. Shipments are delayed; stations are running low in some areas. I drove past a station in the metro area; it was closed, pumps empty. This isn't a normal price cycle; it's a supply shock. And for many businesses in Australia, this isn't just a headline story; it's a real cost that's hitting the P&L immediately. But most companies are still pricing like the market is stable. Many are just still debating whether they should do something about this additional cost. And that gap, that gap right there, is where margin is being lost. [01:21] Hello and welcome. I'm Joanna Wells, founder of Taylor Wells Advisory, and we focus on helping organisations improve margin through better pricing strategy. Now, in today's session, this isn't going to be about long-term strategy. No, it's going to be about what CEOs need to do this week. [01:44] Now, today, we've learned that Iran has refused the 15-point ceasefire plan from the US. This has created even more instability in the global stock markets, and we're seeing global disruption flowing directly across the world, and that's impacting Australian businesses as well. Now the conflict in the Middle East has disrupted key shipping routes, including the Strait of Hormuz, which carries a significant portion of the world's fuel. And that's flowing through quickly; fuel prices are rising, shipments are being delayed or redirected, and Australia is particularly exposed. We import most of our refined fuel, and many businesses are being bought in US dollars and euros. So even when nothing changes operationally, costs still move on, and they're not moving gradually; they're moving in steps, and faster than most pricing processes can respond. [02:46] But here's what's really interesting: most leadership teams in Australia are still asking the same question: "What price increase should we take?" But is that the right question to ask in this environment? I think it's the wrong question. The real issue here isn't the price increase itself; it's how that decision is being made. In many businesses, cost structures aren't current, FX isn't fully reflected in cost structures, commodities aren't tracked closely or even at all, and decisions are based on fundamentally internal costs and historical data. In some cases, cost inputs are seven to nine months old before a business takes an increase. But as we already know, in that time, costs have already moved on, especially today. So what happens? The increase is set too low, and it's implemented way too late. So even when prices go up, margin doesn't recover. [04:04] I'm seeing that right now in the waste industry. One of our clients operates a high-capex business: large fleet, high fuel exposure, and tight margins. As fuel prices have moved recently, their costs have shifted almost day by day, and their pricing really wasn't set up to move that way. It was set up for more stable markets. So what's happening now? They're absorbing more of that cost increase. At first, it didn't seem to be a big issue; it looked manageable. People thought, "Oh well, you know, the crisis will end, things will change, there will be peace." But that's not happening. So what's happening financially? Costs are compounding, margin's declining, and now at an accelerated rate. And the issue really isn't margin anymore; it's become a question of sustainability. And this is the shift most companies haven't made. They are still pricing on a schedule. They still think they are in a stable market. They are not. There are annual reviews, annual reviews! When costs are increasing this quickly: Planned increases, long lead times, but costs are no longer moving on a schedule like this. They're moving continuously, day by day. And most B2B businesses still adjust pricing annually, or now I'm hearing maybe we'll do it twice a year, as if that's a big breakthrough. Well, let's think about this: your costs are moving monthly, weekly, and I've just explained daily when it comes to fuel. So there's a gap; costs are moving quickly, prices are moving slowly, and that gap is where your margin is fundamentally disappearing. [05:58] So here's the question for leaders: Are you setting prices based on how the market used to move or how it's moving ...
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    11 分
  • Episode #0121 - Margin Management: Why Revenue Growth Isn't Enough

    Episode #0121 - Margin Management: Why Revenue Growth Isn't Enough
    2026/03/20
    TIME-STAMPED NOTES: [00:00] Intro: Why Margin Management Is Harder Than Revenue Growth [02:22] Why Pricing Strategy Fails Without a Margin Management System [06:16] When Pricing Strategy Breaks Down: Rebates, Costs, and Margin Protection Risks [11:44] Margin Management in Action: Building a Strong Pricing and Margin System [14:39] Conclusion: Margin Protection Requires Discipline, Not Just Growth Running a business is not easy. Growing revenue, making money is really, really difficult. Winning new customers takes a lot of time, often lots of stakeholders involved. Sales cycles are getting longer, competition is heating up. So when companies grow revenue, I know that's a real achievement, but there's another challenge that often gets much less attention and that's margin. Because if revenue is hard to make, margin is even harder to protect. Hello and welcome. I'm Joanna Wells, founder of Taylor Wells Advisory, and we focus on improving margin through better pricing strategy. Now in this podcast, I just want to share some of my experiences and some practical insights on pricing margin and commercial strategy for CEOs, executive teams, and pricing teams. And today I want to talk about something very simple, but very important, how revenue is difficult to make, but margin much harder to protect. In Australia, businesses are dealing with ongoing change and disruption. Almost daily wars are affecting energy and commodity markets. Supply chains have been unstable, not just for a year or so, but for several years, and input costs remain unpredictable. At the same time, many Australian businesses are buying products in the US dollar or Euros. FX changes are, are becoming a real headache for businesses, and that just creates another layer of pressure and complexity. When the Australian dollar weakens those same products suddenly cost much, much more, even if nothing has changed with the supplier. Costs can still move quickly and often without much warning. And at the same time, what else do we have? Interest rates have just risen the other day. Customers are under pressure. Small businesses, large businesses, you name it, families, consumers, all under pressure and demand in some sectors is becoming less uncertain by the day. Why Pricing Strategy Fails Without a Margin Management System [02:22] So while revenue remains important. Margin here has become far more exposed than ever before, and this is where the pricing and margin system becomes critical. Actually, coming to think of it, there's something really quite interesting and strange about margin. Most leaders and teams believe they are managing it, but in reality, when you really look at your business. Are you really managing margin or are you actually only managing parts of it? Sales manage discounts, finance, manage costs, operation managers, fic efficiencies, marketing, focus on growth. Very few businesses actually step back and manage the entire end-to-end pricing and margin system together. And that system is what I call the pricing and margin system. Now, every business has one. Even if you don't think you have, you have one. And even if it wasn't designed deliberately, it's the set of decisions that determine how much profit your business is going to keep. For example, how prices are set, how discounts are managed, how rebates are used, how costs increase are handled during costs, pass through processes, and which customers the business focuses on and why. A few years ago I met a business owner. He owned a B2B manufacturing business. Anyway, we were talking and we got onto the subject of pricing, and he strongly believed that his business's pricing was really strong, that they defined, you know, value, they understood their customer's perceptions of value, that they knew that they thought their list prices were highly competitive. Et cetera, et cetera. And anyway, that he was going on to tell me that, um, they regularly introduced price increases and if we could come in and just have a, a look at the, the detail to ensure things were, you know, running as smoothly as, as he thought that would be great. So we did, we took on that invitation, um, and we analyzed their invoices. And what we found was that the customer's prices were actually much, much lower than the belief in the business. That, that, that actually, that he had, um, what we had to reveal to him and somewhat awkward discussions was that his sales force. We're fundamentally creating hundreds, if not thousands, of different pricing arrangements through small negotiations, what we call in the pricing world as price exceptions. And that essentially discounts we're building up over time outside of the official. Discount matrix in in the the ERP and that ultimately different customers were on different arrangements. They weren't on a neat listless arrangement that he thought they were on. And what we have here then is on paper, in in systems, a great pricing and ...
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    16 分
  • Episode #0120 - Why Price Rises Are Much Harder Than CEOs Expect

    Episode #0120 - Why Price Rises Are Much Harder Than CEOs Expect
    2026/03/11
    TIME-STAMPED NOTES: [00:00] Introduction [01:12] The Challenge of Rising Costs [02:39] The Problem of Ownership [03:53] Case Study: Finance and Product Portfolios [05:47] Case Study: Sales and Customer Relationships [09:03] Case Study: Pricing Teams and Internal Views of Value [11:59] Operational Systems and Data Challenges [14:05] Conclusion: Improving Pricing Capability Most executives I speak to think that taking a price rise should be fairly straightforward. Costs go up, prices go up, simple, right?. But inside most organisations, things don't work as smoothly when it comes to price rises. So, here's a simple question: When your organisation takes a price rise, who actually manages it, and what's the process?. Is it Finance, Sales, Marketing, or does it depend on a particular person or a certain situation?. In many organisations, that question really doesn't have a clear answer. Hello, I'm Joanna Wells, I'm the founder of Taylor Wells Advisory, and we focus specifically on improving margins through pricing strategy. In this podcast, I'd like to share some of my experiences of working with companies on pricing strategy. What tends to work with a price rise, and what often makes them far more difficult than they need to be. The Challenge of Rising Costs Now, over the past few years, we've all seen a lot of cost pressure and disruption. There've been supply chain issues, commodity price increases, fluctuations, lots and lots of inflation, global instability, wars, and political tensions, you name it. For many companies, that's meant you've got to move quickly with costs to cover your margin. And that's usually when organisations realise how difficult pricing actually can be. From the outside looking in, pricing looks simple. I've actually had someone say to me, "How difficult can it be? You just add, you know, 5 to 10% on costs". Right, give that a go!. But inside the organisation, when you're actually doing it, and you want to do it well, you realise calculating prices, planning a price rise, changing prices in a system, it really does affect almost everything in an organisation and almost every team, from Finance, Sales, Marketing, Operations, and IT. And if these teams aren't aligned, things really start to become complicated. The Problem of Ownership And often, from my experience, the problem really starts with something quite simple, really basic, and it's about ownership. Inside most companies, no one really owns pricing. Yes, people might put their hand up and say, "I'll do a bit of pricing, I'll help you out, I'll change those prices in the system," but no one really is accountable for pricing. I've even seen pricing teams that say, "I'm not accountable for pricing". So, if you've got that dynamic happening and you've got a lot of opinions around pricing, that's for sure, but no one will actually go, "Yeah, hand up, I did that. This is my decision, I own that decision". So, when a price rise is necessary, when it's needed, when you've got your executives that said, "We really need to take a price rise, we need to cover our costs." People have to come together and coordinate and start making decisions quickly, and that requires ownership and accountability, and her, that's where the weakness in the process, even if there is a process, starts to show. Case Study: Finance and Product Portfolios Let me think of an example for you here. In Finance, the Finance manager might calculate the cost increase at price rise time. But allocating those costs and increases across a large portfolio, I'm thinking here of a large, complex B2B business from manufacturing and distribution right through to the end consumer and retail, often means dealing with a very large product portfolio. So, allocating those cost increases really isn't easy. I've worked with many of these types of businesses. I'm thinking of one in particular, a B2B complex manufacturing business where the Finance manager had to apply cost increases across a huge range, it was about 350,000 SKUs. But when we reviewed and looked at the data and the COGS (Cost of Goods Sold) movements, we saw that some products had increases three to four times the underlying COGS movement, while others had barely changed at all. Now, no one in particular, he wasn't wrong, he didn't do anything wrong when he did that, it was simply a very, very difficult task to allocate costs, even if you don't have that many SKUs. But if you could just imagine, correctly and accurately allocating costs across thousands, hundreds of thousands of products. It's almost impossible. And this is what we see time and time again, and a lot of Finance people are wasting a lot of time trying to do that. It's a great effort, but it's not getting the outcome that many businesses need when they're taking a price rise. Case Study: Sales and Customer Relationships Okay, so if it's not Finance, then who should it be?. Well, often when there are some issues in the price rise process, and ...
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    16 分
  • Episode #0119 - What is Value Culture?

    Episode #0119 - What is Value Culture?
    2023/02/03
    Today's episode is a bit like Part B or a follow-up from our last episode a couple of weeks ago, where we introduced our new project, which we're calling Value Culture. TIME-STAMPED NOTES: [00:00] Introduction [03:05] Why do not all companies have specialised pricing experts or teams? [4:35] What can Value Culture do? [10:19] What can clients benefit from Value Culture? [11:17] The Ultimate Objective And The Essence Of Value Culture What is Value Culture? Aidan: Hello, and welcome to another edition of Pricing College with your hosts, Aidan Campbell. And Joanna: Joanna Wells. Aidan: Today's episode is a bit like Part B or a follow-up from our last episode a couple of weeks ago, where we introduced our new project, which we're calling Value Culture. But I suppose in this episode, I wanted to ask Joanna, really, why is this sort of project happening? What did we see? Why did we think companies needed this sort of product? Like, what is the need or what is the problem that a lot of businesses, smaller businesses and, you know, medium-sized businesses, are facing? Joanna: Yeah, that's right. I mean, primarily, what we are doing is creating and implementing an essentially commercial platform called Value Culture, which is really aimed, as you said, at small and medium-sized businesses and enterprise businesses too. And the reason that we have done this, and we're calling it a platform; it is a tech platform and not traditional consulting, is because we saw the mass need, the scale of the need of smaller, medium-sized businesses. Considering that about 98% of all businesses in Australia are small to medium-sized businesses. In terms of the problem, we've seen consistently when we're speaking to startups, SMEs, medium-sized businesses, privately owned businesses, and then your ASX listed and Fortune 500s' very common problems with pricing that we want to solve. And ultimately, as you know, the problem was quite simple. People feel that price can be something that is added at the end of a list of commercial tasks. For instance, when you're launching a new product, often the assumption is that it's okay. We can just set any price and then adjust that price later without really understanding the data inputs required to set pricing, the different pricing methodologies out there, and the metrics that they need to prepare and track along the way. And as you know, customer price response has a significant impact on your ability to change prices. Essentially, once you have your prices out there in the market, it's very difficult to change prices. And often when people do that, companies small to large, when they just do that guesswork pricing or cost plus, they regret it because they end up essentially either overcharging their customers or losing revenue and volume. You know, even selling below cost when they've got such great businesses essentially means they're undervaluing their proposition. Aidan: I suppose, you know, here at Taylor Wells, one of the things I'd be very aware of, you know, on this podcast we've spoken many times about how getting a pricing person in really will give benefits to a company. But I think, you know, we're realists as well, and we're completely aware that if your business is doing a million Australian dollars in revenue, you know, you probably cannot afford, like, let's be honest, to go out and pay someone a hundred grand who's a high performer in pricing. So I think, you know, there's a real gap in the market there. The vast majority of companies are small. As you said, Joanna, and I agree with that, there's a real gap whereby, in smaller companies, people tend to be doing multiple tasks. People tend to not be specialists, and the people often put their hand up and suffer the most stress and go, "Oh, I need some guidance on pricing. Can somebody help me today?" They fall into a trap, a gap, I guess, whereby they're not big enough revenue-wise to finance. A specialist, and to be honest, they're also, you know, there's not much point in getting consultancy for them either because there's nobody internally who could be dedicated. Joanna: Oh yeah. Look, that's a great point, and that's a big part of the problem too. Pricing then just becomes this quite onerous task that puts real pressure on people who are really out of their depth and don't know where to start, what to do, or how to move forwards with pricing. And really, what Value Culture does is give them that start, that ability to forge ahead when things are very unclear, the starting point, and then moving forwards, learning things step by step, getting the simple things mastered first before tackling the bigger, bigger things. And then, step by step, feeding the right information in the right direction, whether that's in terms of getting the right inputs, data inputs, and information inputs together for price analysis and cost analysis or what, or whether it's more, okay,...
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    14 分
  • Episode #0118 - Why Pricing Requires CEO And CSuite Backing

    Episode #0118 - Why Pricing Requires CEO And CSuite Backing
    2022/12/02
    Why Pricing Requires CEO and Csuite Backing Aidan: In today's episode, we want to dig a bit deeper into a topic we've covered a couple of times in previous episodes. And that it's vital, it's so important that a pricing transformation or a major pricing project has CEO, C-suite backing. And I suppose today we're going to dig into that. We're gonna do a bit of a question-and-answer format. Cause it works quite well. So we'll be asking our resident pricing expert, Joanna, these questions. I suppose then she's smiling at that suggestion. So the first one is, I suppose an open-ended question. Why is it important to have CEO and Csuite backing? Joanna: Well, let's start with the simple truths and facts about pricing. The importance of CEO and C-Suite backing comes down to the returns that you can get from pricing. They're more than substantial and very impressive when you compare a change in price to changes in cost volume, a mix for instance. So you can say if you were going for a 2% increase in prices, versus not increasing prices, can lead to an impressive and direct flow to the bottom line of 20 to 30%. Obviously, here I'm thinking, volume is the same and constant and we've got our supply chain and costs in control. But I think you can hear the message here if you just make very small improvements and changes to pricing. You can get a lot of money for it. So that's why number one, it's very important that the the C-suite understand how much monetary leverage they have with pricing. And equally, if they do pricing incorrectly, how much margin they could potentially lose? Aidan: Okay, so I think we understand, that's clear that it's important for the business, but does the CEO have to be involved in this project? Does the Csuite have to be involved? Can they not just delegate it down to a finance manager or someone like that? Joanna: I like how you mentioned delegating down. It's always about, I hear this a lot and look, I agree with delegating to the right people, but if that in itself can be a problem. I think initially it's very important for the executive team. A) to understand the importance of it as I've already stressed, and B) to get behind it and to be shown as a consistent voice on the topic of pricing. Even if their areas of expertise are in supply chain sales, and product pricing. They still need to get behind the pricing project because pricing often touches all of those areas inadvertently. And what we also find, if the executive team, you know, they're role models for change. What we commonly see within our clients, if they're not really behind it, they don't understand it, they're not committed, and they're just more focused on their area, almost this siloed culture. And they're sort of paying lip service to the role of pricing. Yes, it's important we get that. But that really isn't what I call sponsorship, that's just lip service to sponsorship. You've really gotta take an active role because if the executives don't do that, then it sends a clear message to anyone, that they're gonna delegate the responsibility of pricing to that. It's really not that serious, and they can just tack it on at the end of the normal day job and nothing really gets done. Or if it gets done, it gets done poorly. Aidan: You know, that makes sense to me. I think we've covered also some other podcasts, and how pricing often slips between the gaps. Which function does it fit into? Is it finance? Is it marketing? Or is it sales? Or is it the commercial function, which some companies, let's be honest, don't really have? So, I completely understand that it needs to be for a real pricing project to really work, it needs to work across multiple functions. So I completely understand that. The other thing I think is if, just on this point, if people do what they're incentivised to do, and I think that concept you mentioned of leadership, role modelling. People know what if the higher-ups care about something. I think there's an old anecdote about it. Some executive, what do you care about today? I care about what my boss cares about, and that's how you get promoted. So I think it is really important that it makes a lot of sense to me. Joanna: I think, when you mentioned, Where it should be delegated to, should it be the finance manager? And often if there isn't an established pricing team, it does go to some kind of finance manager often, or a commercial manager. And I think, when it gets down to it, the real reason why you need executive sponsorship, especially if you're gonna move to strategic pricing or a value-based pricing system, you really do need sponsorship there because what you're actually saying is, I'm going to change how we think about our customer. How we think about how we do business, how we think about making money. We're no longer going to anchor ourselves to our costs. We are no longer just going to look at maximising margin by putting...
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    21 分
  • Episode #0117 - What is different in B2B pricing?

    Episode #0117 - What is different in B2B pricing?
    2022/11/25
    18 分
  • Episode #0116 - Q&A On What Optimising The Tail Means

    Episode #0116 - Q&A On What Optimising The Tail Means
    2022/11/18
    18 分
  • Episode #0115 - Discounting And Price Promotions In Retail Or B2C

    Episode #0115 - Discounting And Price Promotions In Retail Or B2C
    2022/10/28
    20 分