The core principles of pricing can definitely help quantify the benefits of performance, productivity gains, cost or revenue drivers, and the value of new capability building. The real challenge comes into play when you strive to quantify the value of the factors such as your know-how, networks, brand, and market position. To address the latter, a good place to start is to determine the set of all the relevant reference points. You can then add - or s...

You can never really catch up in digital Remember how long it took most organizations to become a digital enterprise? It took more than two decades to operationalize the added layers of digitization in an integrated manner. Riding this wave of digital transformation is not really something that you ever catch up. The later you develop new digital experiences, the later you will monetize your data.

Today, we go back to our original question? How will you create new digital services, experiences, and transformations that customers are willing to pay for, increasingly more? The short answer is this: you simply can't agile your way into monetization.

Unless you begin the innovation process with monetization in mind, you simply cannot know to which value stack – and therefore price point – to adjust your cost structure and hit your target profits. Otherwise, you may be working on the wrong feature set or you may be wasting resources on table stakes or, as in most cases, you may be over engineering.

Ask yourself this question: what’s the one value metric that would allow your revenues to grow if you acquire no new customers? A monetization model so aligned with the customers’ value metric allows a company to grow as their customers’ benefits grow. Sometimes innovating the monetization model in which the value exchange takes place can be the source of innovation itself.

From a product management point of view, there are few different value stacks out there for which you can develop your product. But only when you know what the value stacks of different customers look like, you can actually decide what to develop. Similarly, you can price profitably, only when you know the cost structure that you must target with respect to a willingness to pay.

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