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Price to Sell or Build to Sell?

Pricing and monetization blog - Pricing Innovations

One of the biggest misunderstandings in business today is “once you have a product, then you set a price for it.” Contrary to that belief, in order to win, you must indeed turn that statement on its head and build the differentiated products that you can price and sell profitably.


Product management must foremost focus on building the differentiated products that a firm can price and sell profitably.


In our global economy, most companies compete directly or indirectly with competitors from all over the world, and in most cases most of those competitors have a much lower cost structure. In the presence of cost disadvantages, many companies find it harder and harder to achieve profitability even when they enjoy a comfortable lead in technology. This is where strategic pricing can help greatly – especially when your pricing strategy accompanies - even leads - your product strategy because ultimately you should build the product that you can sell.


The role of pricing is not driving sales – at least not entirely.


More importantly, pricing can help your product teams to decide what to build with a market-centric view. Pricing can help you manage your product development process strategically, and prioritize the differentiated features and attributes that best serves your monetization model.

Translating the benefit-value continuum into the product features and functionality is harder said than done. Most start-ups over-engineer solutions that make their own product vision “complete.” But savvy product management requires omitting the features that drive the costs more than adding value for paying customers. Bringing the pricing process as early as possible into the development cycle will help determine what to build and what to omit according to what you can indeed sell first to early-adopters and later to paying customers.


Paying customers convert only when the benefit they receive from a solution surpasses the price that they will pay for it.


Price is one of the most powerful means to communicate the value of your differentiated offers. Your pricing structure and price points impact your customer adoption and market share as well as your long-term profitability. And while you're on that journey, we're here to help. Explore your pricing options by talking to one of our Pricing Innovators.

Ready to begin your own pricing innovation?

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