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Emerge Dynamics Podcast

Emerge Dynamics Podcast

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The podcast for middle market private company managers and owners Economía Gestión Gestión y Liderazgo Liderazgo
Episodios
  • Episode 92: Pricing Strategy For Success – Part 2

    Episode 92: Pricing Strategy For Success – Part 2
    Jan 8 2026
    Episode Overview In this second episode of the pricing series, hosts David and Eric bridge from pricing theory into practical strategy and application. They explore the critical differences between cost-plus and value-based pricing, discuss price elasticity, and provide actionable frameworks for optimizing pricing in middle-market private companies. Key Topics Covered 1. Marginal Buyer Theory Recap The last buyer-seller transaction indicates market pricing potentialPrices function as market signals about resource valueIgnoring the marginal buyer leaves money on the table 2. Price Elasticity of Demand High Elasticity: Small price changes cause significant market share loss (e.g., hotdog industry – one penny change = major impact)Low Elasticity: Price changes have minimal impact on customer retentionRevenue optimization: Selling at 2x price with only 5% customer loss increases overall revenue and profit 3. Cost-Plus Pricing When It Makes Sense: Regulated industries (utilities, government contracts)Commoditized productsNew product launches (to establish break-even baseline) How to Calculate: Add all direct costs (materials, labor, freight)Allocate indirect costs (rent, depreciation, admin)Calculate total unit costApply markup based on contract requirements or industry standards Limitations: Focuses energy on cost side, not demand sideMisses shifts in market dynamics and pricing powerLeaves value on the table from marginal payersDoesn’t account for subjective customer value 4. Value-Based Pricing Core Principle: Maximize profitability by capturing the value created for customers Implementation Steps: Identify the specific problem your product/service solvesQuantify the cost of the problem to your customer Lost salesProduction inefficienciesHigher operational costs Calculate economic value created What would alternative solutions cost?What’s the total economic benefit? Set pricing below total value to ensure customer benefit Example: If your solution creates $100K/year in valuePricing at $100K = customer breaks evenPricing below $100K = customer realizes net benefitConsider multi-year value (Year 1: break-even, Year 2+: 100% profit to customer) 5. Pricing Optimization Strategies For Established Businesses: Run pricing experiments to optimize revenue and profitTest different price points carefully (consider elasticity)Create multiple proposal versions with different pricingDifferentiate by geography or market segmentTrack conversion rates and customer response Key Insight: Value pricing aligns your interests with customer interests – if you’re not bringing value, you shouldn’t be in business together. Action Items for Listeners Complete the homework from Episode 1 analyze your data using marginal buyer theory Quantify the economic value your product/service creates for customersCalculate what alternative solutions would cost your customersBegin pricing experiments in your business (if appropriate for your industry)Prepare for Episode 3 Coming Up Next Hourly pricing vs. value-based pricing for servicesComprehensive pricing strategy frameworkPutting all the pricing concepts together Key Quotes “A price is not something you set, even though yes, you do set them, it’s more of a signal of what the market is saying about the value of certain resources.” “Value pricing always aligns ourselves to the interest of the customer and the client. If we’re not bringing them value, then what the heck are we doing?” “When all of your pricing energy is going to the cost side, you’re paying less attention to the demand side.” Resources Episode 1: Pricing Theory & Marginal Buyer ConceptEconomist referenced: Ludwig von Mises
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    20 m
  • Episode 91: Pricing Strategy to Optimize Success – Part 1

    Episode 91: Pricing Strategy to Optimize Success – Part 1
    Nov 18 2025

    David and Eric launch a new series focused on one of the most critical yet misunderstood topics in business: pricing theory and pricing strategy. This episode lays the groundwork for understanding how prices are set, why they matter, and how business owners can leverage pricing as a powerful tool for profitability and growth.

    Main Topics Covered:

    • Why pricing matters for business value and profitability
    • Pricing theory vs. pricing strategy: understanding the “why” and the “how”
    • Price as a signal, not just a number (wisdom from Ludwig von Mises)
    • Market dynamics and price setting (cost-plus pricing, market examples)
    • The invisible hand and market signals (Adam Smith, government price controls)
    • Marginal payers and market clearing (Böhm-Bawerk, horse auction example)
    • Subjective value and ethics in pricing
    • The dynamic nature of prices and market size impact
    • Practical applications for business owners (M&A, product pricing)

    Key Takeaways:

    1. Adopt a “price as signal” mindset—every price is a signal of value.
    2. Experiment and gather data: try changing a product’s price and observe the results.
    3. Beware of over-reliance on cost-plus pricing; focus on value.
    4. Understand the role of marginal buyers and sellers in price setting.
    5. Recognize the subjectivity and ethical considerations in pricing.

    Notable Quotes:

    • “Price is not a number you set. It’s a signal you read.” – Ludwig von Mises
    • “Good managers have to set prices according to market conditions.”
    • “Each individual player in the market has a subjective value. This is going to play into how we start implementing pricing strategy in our next episodes.”
    • “If nothing changes when you raise your price, you may have more pricing power than you think.”

    Action Items & Listener Challenge:

    • Try changing the price of a low-risk product and observe the results.
    • Share your experiences with the hosts at podcast@emergedynamics.com for a chance to be featured in a future episode.

    What’s Next:
    The next episode will dive deeper into actionable pricing strategies, building on the theory discussed here.

    Connect with Us:
    Email: podcast@emergedynamics.com

    Thank you for listening to Emerge Dynamics! If you enjoyed this episode, please subscribe and share your feedback. Stay tuned for more insights on pricing and business strategy.
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    25 m
  • Episode 90: Something That Rarely Gets Headlines, But Quietly Builds Empires

    Episode 90: Something That Rarely Gets Headlines, But Quietly Builds Empires
    Aug 21 2025

    Summary

    In this episode of the Emerge Dynamics podcast, David and Eric discuss the critical role of operational efficiency in business success. They explore the often-overlooked tweaks in daily processes that can lead to significant growth and impact. They use just one of the numerous possible examples to demonstrate their point: The order-to-cash-cycle. The conversation covers practical steps for improving the order-to-cash cycle, identifying pain points, measuring workflow efficiency, and implementing quick wins. They emphasize the importance of testing changes and documenting improvements to ensure sustainable growth and efficiency in business operations.

    Takeaways

    -Operational efficiency is crucial for business growth.
    -Small tweaks in processes can lead to significant improvements.
    -Mapping out workflows helps identify inefficiencies.
    -Measuring the order to cash cycle is essential for cash flow management.
    -Identifying pain points can reveal opportunities for improvement.
    -Quick wins can be achieved by streamlining processes.
    -Testing changes in a pilot program is important before full implementation.
    -Documentation of processes aids in training new employees.
    -Continuous improvement is key to operational success.
    -Every business can benefit from focusing on efficiency.

    Chapters

    00:00 Introduction to Emerge Dynamics Podcast
    01:39 The Importance of Operational Efficiency
    03:05 Mapping the Order to Cash Cycle
    05:40 Identifying Pain Points in Processes
    12:00 Measuring Workflow Efficiency
    17:01 Identifying Quick Wins for Improvement
    18:15 Testing and Piloting Changes
    20:19 Documenting Improvements for Future Reference
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    24 m
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