Whenever customers buy your product or service, there’s a leap of faith that they will get value from you. An alternative is to offer your solution in return for some of the savings — and to measure this in the customer’s own business units. Even if you fall back on traditional pricing, it will help the customer assign real value to what you deliver. Continue reading
Price lists are never quite current enough, sufficiently detailed, or cover enough of the awkward special situations that customers raise. So, there’s a tendency for HQ product and pricing folks to do a lot of tinkering on the margins with their price lists. We may be forgetting the “consumers” of price lists, though: sales reps who pay our salaries and customers wondering what to buy. Complicated pricing models may be self-defeating. Continue reading
I’m often involved in pricing discussions, which are typically introduced as “what’s the right price for my product?” Much more important is the strategy that should precede this question, namely “what is the right pricing unit for my product and my market?” Continue reading
Established companies in established markets generally have some standard ways to package and price their new offerings. Product extensions are benchmarked against the existing product line or the other guy’s features and prices. This leaves product managers focusing on “faster, cheaper, better, more.”
In a brand-new market, though, there are fewer guideposts. Close competitors may not exist. Even before final products are ready, you need to define initial packaging and pricing for your fledgling sales force and prospects. Otherwise, the sales team will invent it haphazardly, one visit at a time. Here’s a starter approach that I’ve called “Goldilocks” packaging. Continue reading
Sometimes we take a fresh look at a product, with the thought of turning it into a service. This is especially attractive if sales of our product-as-a-product are less than planned. Here’s a short exploration of the opportunities and pitfalls in moving from a product model to a service model.
First, we’ll step through some successful service models including application hosting, transaction-based, and subscriptions. Then, sketch an example to highlight some of the advantages and challenges of services versus classic product sales. Continue reading
Sometimes, at the end of a heroic development effort, we find lukewarm prospects instead of purchase-order- waving customers. How can we get inside our prospects’ heads early in the product cycle so that our “next new thing” meets their needs and desires? Or… paraphrasing Freud’s famous question about women,
“What do customers want?” Continue reading