#66—Hermann Simon: Pricing Strategies in Uncertain Times—through Inflation and Beyond

Hermann Simon is the Founder and Honorary Chairman of Simon-Kucher & Partners, today the world’s leading price consultancy with 41 offices and 1600 employees. From 1995 to 2009 he served as the CEO and is the firm’s Honorary Chairman today. He is an expert in strategy, marketing and pricing and the only German in the “Thinkers50 Hall of Fame” of the most influential management thinkers in the world. In German-speaking countries he has been continuously voted the most influential living management thinker. The magazine Cicero ranks him in the top 100 of the 500 most important intellectuals. Hermann was a professor of business administration and marketing at the Universities of Mainz and Bielefeld (and a visiting professor at Harvard Business School, Stanford, London Business School, INSEAD, Keio University in Tokyo and the Massachusetts Institute of Technology).Hermann has published over 40 books in 30 languages, including world bestsellers on Hidden Champions and Price Management. His most recent books are True Profit! No Company Ever Went Broke from Turning a Profit, and Hidden Champions in the Chinese Century: Ascent and Transformation, both published by Springer Nature, New York. The new book Beating Inflation will be out this fall of 2022. In this podcast, he shares:The number one thing most companies get wrong when setting their pricing strategies How to deal with inflation, and how to know when and by how much to raise your prices How new technologies are opening up the possibility of evolving to new, innovative pricing models that we should be considering today __________________________________________________________________________________________"How does the willingness to pay change for customers [during inflation]? Do you have the pricing power to increase your prices without losing volume and customers?"-Hermann Simon_________________________________________________________________________________________Episode Timeline:00:00—Introducing Hermann + The topic of today’s episode2:12—If you really know me, you know that...2:47—What is your definition of strategy?3:30—What do companies typically get wrong when it comes to pricing?4:35—How do you approach communicating value when you are competing against many other bidders in the same industry?6:09—What is a "hidden champion?"7:05—What do you do when your competitors are behaving irrationally and engage in price wars?8:56—What do companies get wrong when it comes to pricing in an inflationary environment?11:26—How do you know by how much to change prices given a change in input prices during inflation?13:06—Could you explain your term "phantom profits" that helps people understand if they're ahead or behind a wave?14:37—Could you explain any pricing models that come to mind that are emerging that you recommend to clients?17:57—What are your thoughts on transparency in pricing? Is it a growing trend?20:59—There is the question of "fairness" when it comes to pricing (who puts in value vs. how much they extract when many players are involved). What are your thoughts on the topic?24:47—Is there anything we haven't covered that you'd like to address?26:34—How can people continue to learn from you and follow you?__________________________________________________________________________________________Additional Resources: Personal Page: Thank you to our executive producer Zach Ness, our producer Nazanin Homayoun Jam and our editor James Pearce. If you enjoyed this episode, please follow, download, and subscribe. I’m your host, Kaihan Krippendorff—thank you for listening.Follow us at outthinker.com/podcast