Blog Category: New Product Value/Pricing

Customer value is only created when an important, unmet customer outcome is improved. Period.

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Sure, you can develop products that you find exciting. But unless these products address something customers find important and unsatisfied, don’t expect them to buy them. And if customers do buy your product, they certainly won’t pay a premium. If you’re not happy about this, you’ll have to complain to Adam Smith. The best way to know customers are eager for you to meet a need is with Market Satisfaction Gaps.

More in white paper, Market Satisfaction Gaps

The forces moving a supplier from commodity to specialty come from within…or they don’t come at all.

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There are many forces dragging your products toward commoditization: competitors trying to imitate your products… purchasing agents trying to standardize your products… new technologies trying to obsolete your products. In your quest toward specialty products, you’ll get no outside help. You own this one, baby.

More in 2-minute video at 9. Avoid the commodity death spiral

Be clear on what you own and what your customers own.

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Customers own “outcome” space. You own “solution” space. Don’t let them into your space… unless you want to become a contract manufacturer. Instead, enter their space to understand desired outcomes better than competitors. This lets you deliver unique value in your solutions, which is handsomely rewarded though premium pricing. The best way to do this? Use qualitative and quantitative interviews.

More in the video, Reinventing VOC for B2B

Heaven save us from the “value proposition workshop.”

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I am sometimes asked to do a workshop on developing value propositions. I say, “Not unless you invite your customers to it.” Seriously, suppliers already spend far too much time guessing what customers want. Why try to legitimize this innovation malpractice by creating and word-smithing value proposition statements internally? Better to conduct proper B2B interviews and then build a value calculator around a value proposition that customers truly care about.

More 2-minute video at 34. Use value calculators to establish pricing

A customer outcome is like a scientific specimen, waiting to be examined and understood.

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Great value propositions begin and end with customer outcomes. It’s like collecting specimens, sliding them under your microscope, and continuing to turn up the magnification. The careful researcher doesn’t have to agonize over the right value proposition. It comes into increasing focus, waving its arms and screaming to be addressed.

More in white paper, www.b2btimingiseverything.com (page 9)

You have two options: Ask for pricing decisions or understand customers’ pricing decision making.

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You can ask for pricing decisions using a survey, e.g. Van Westendorp. But it’s hard to get a straight answer in concentrated B2B markets: They know they’ll be negotiating prices later. Better to understand the customer’s world so well you can create a value calculator… to model their pricing decision-making. You’ll have longer-lasting insights vs. a one-time survey.

A value proposition is simply improving important outcome(s) for customers’ benefit.

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Unlike many B2C benefits, e.g. amusement, comfort, and self-esteem, B2B customer benefits are usually measurable, economic and—wait for it now—predictable. This predictability means B2B suppliers who study customer outcomes, like a science, will be handsomely rewarded. B2B customers will eagerly help you… if you know how to ask them.

More in white paper, www.guessingatcustomerneeds.com

VoC Customer Interviews — By the Numbers

Customer Interviews By the Numbers

Qualitative interviews are important, but if you don’t continue with quantitative interviews you may still struggle with new product innovation. Many B2B producers use AIM’s preference interviews to generate Market Satisfaction Gaps for customer outcomes. A Gap over 30% indicates the market segment is eager to see improvement. ... Read More

Once your new product is launched, the pricing insight window slams shut.

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Customers will help you set prices before—but not after—you launch your new product. They want you to develop innovative new products and services that deliver value to them… so they’ll give you insights to make this happen. These same insights allow you to establish optimal pricing. Do you know how to do this? It will be too late after you launch your product.

More in 2-minute video at 34. Use value calculators to establish pricing

The Science behind B2B Value Propositions

B2B Value Propositions - voice of customer interviews - 10-Pricing-Window

The strongest value propositions examine key customer outcomes at 9 levels (the essence of New Product Blueprinting): 1) Uncover outcomes, 2) understand importance, 3) define & set direction, 4) prioritize outcomes, 5) learn how to measure, 6) identify satisfaction levels, 7) measure next best alternatives, 8) quantify value created, and 9) quantify value captured. ... Read More