Value-Driven Pricing in 2023

What is our biggest prediction for association pricing and value strategy in 2023? Watch below!

Automated Transcript:

Hello, everyone, and welcome to the pricing for associations podcast, where we give away all of our knowledge on Pricing and Value strategy for your association. I'm Dr. Michael Tatonetti. I'm a certified Association Executive, and a certified pricing professional. And I'm the founder and CEO at pricing for associations.com, where we got associations like yours forward in their Pricing and Value strategy. Today, I'm answering a question from an association Pro. If you have a question you'd like us to answer on the podcast, head over to pricing for associations.com forward slash podcast? To submit your question, I will answer it on a future episode. Please remember that my answer is general advice. And it is not specific consulting recommendations. So take what we share as a learning opportunity, not necessarily the exact path forward for your organization. So today's question that was submitted is, what are your Trend predictions for Pricing and Value strategy in 2023? Now, I love this question, because I've been seeing some things in 2022 that I've been wanting to share with you all. And I'm just gonna have like a brutally honest conversation today. As I've been working with clients over the last year, I think I'll kind of go back actually and say trends that I've seen from 2020, to 2023, and 2020. Of course, we had a lot of disruption in our fields. And we really had to figure out what were we doing pivot quickly deliver things virtually, our digital game, that was its own thing. In 2021, some of us started to come back with in person things depending on if you were more of a local organization, or what time of year and the comfort level of your audience and your organization to pull events off. And by 2022, for the most part, it feels like we're somewhat back to normal. And a big thing that kept coming up last year was well now how can we raise our prices not only on the virtual events, but now that we're back in person, and membership was a big one as well, how do we raise our membership prices, our sponsorship prices. The problem though, that I saw, this ties in to my 2023 prediction, and what I would watch out for if I were an association professional making these decisions in house, the big thing that I actually saw in 2022, as our firm, we typically do two main types of analysis for our clients. The first is a value analysis. And the second is a pricing analysis. So we believe in value based pricing, that means we don't just price based on what you see your competitors pricing out, because you may not be offering the same thing or quality that they are yours may be higher and may be lower. So we don't believe in just pricing based off competitors. And we also don't believe in pricing just based off of the squeakiest wheels, meaning those people who really love you, your biggest fans, or those who are critical of you, those who are going to complain the most, right like all of our audiences have that that's okay. But what we want to do is really figure out what value overall does our audience need? And then based on delivering that value, what are they willing to pay overall, the the fans, the people who are kind of progressively continuing along being members or attending your events, and then those in between who are maybe a bit indifferent, we want to hear from everyone. Now, here's what I saw in 2022, I saw a lot of organizations wanting to raise the price of different products, again, especially membership and sponsorship.

I also saw a lot of new product launches. The problem was most people were not focusing on the value analysis. They wanted to know can we raise the price. And they assumed that they could and by how much because we haven't raised in it a bit. But the pitfall that I'm seeing is likewise, associations have not really looked at the value that they provide. I think a lot of us because we were focused on events and digital and responding to a global pandemic, we have not really assess the value that we provide within membership or sponsorship. Or why are we launching this new product, I had some organizations who have not even done a value analysis, yet they had already decided to launch a new product. And then when we came in and did a value analysis, there wasn't as much of a need or the willingness to pay was not that high. They had missed the mark and how they developed it. So my warning to organizations and my prediction for 2023 Is that retention might be an issue. I think that if you only go into this, you're focusing on raising the price but not doing a value analysis and really assessing the value that you deliver. Again, there's kind of three main parts to it. What are you doing well, that you should keep doing? What should you amplify where opportunities to maybe increase the value and then what should you sunset what value components are not really needed? And that all can be by segmentation within a product as well? Right?

So that impacts your marketing communications and what you're saying to people. All that being said, I think that value analysis needs to be the main focus for 2023. Even above and beyond pricing, I just finished a project for one client. And what we found was that they are not ready to raise the price, they need to do some value adjustments over the next six months. But once they do that, I think we can then redo the pricing analysis and raise the price effortlessly. But if they were to raise the price, right now, without adjusting the value, they would have a retention problem, they would lose people and their overall bottom line would drop. There are times where you can raise the price and you lose some people. But overall, your bottom line goes up. And that's where you as a mission driven organization have to decide, Okay, do we want to serve 100% of our audience at this profit? Or do we want to serve 98% of them at an even higher profit, and deliver more value to that 98%? Are we willing to lose 2% of our audience. But I'm afraid that a lot of organizations and I normally not a negative Nancy, but I'm afraid a lot of organizations are going to try to raise price, end up losing their market share and their overall bottom line and just missed the mark. So if I had to make a strong prediction for 2023, it would be that organizations need to do a value analysis of their core programming what brings in the majority of your revenue, it's probably membership and some type of education, maybe sponsorship or events. Look at what are the 123 biggest programs. And if you have not planned to do a value analysis and 2023, I would highly recommend that you do a value analysis, before you even look at price, ensure that the value that you're delivering is matching or what changes are needed. And then from there doing a pricing analysis based on those changes, which is the type of work that we can do with an organization. But whether you do it with us or not. I think that is the biggest trend, the biggest thing to watch out for in 2023. So I hope that was beneficial. I hope that's helpful. Hopefully it's not scary. I know Pricing and Value can feel mystical to a lot of people in the association space. But we're here to help. So I thank you for joining us. I hope you found this content valuable. For more Pricing and Value content specifically for associations. You can go to pricing for associations.com forward slash blog to find all of our free content. And if you have a question again that you would like for us to answer on a future episode, just head to pricing for associations.com forward slash Podcast with your question and I will answer it. Also if you need help if you would like to schedule a free sales call with us to discuss your Pricing and Value needs and see how we might be able to help you can go to pricing for associations.com forward slash contact to complete the contact form and schedule a call with our team. So until next time, continue to have a great day and I will see you all soon