Blog Category: New Product Value/Pricing

Heaven save us from the “value proposition workshop.”

68 Value Proposition Wordsmithing

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?

More in article, The Science behind Great Value Propositions (Originally published in B2B Organic Growth Newsletter).

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

62 Scientific Specimen

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, Timing is Everything (page 9).

Pinching pennies in the front-end of innovation is like night-driving with burnt-out headlights.

61 Penny Pinching

Imagine a team spent $50,000 traveling to interview customers about their needs. What would it take to recover this front-end investment? Typically, just one of these… Improve probability of success by 1%, increase market share by ½ share point, accelerate time-to-market by one month, or raise pricing by 0.5%. Buy new headlights and speed up.

More in article, The Harsh Realities of Organic Growth (Originally published in B2B Organic Growth Newsletter).

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

60 Price Decision Making

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.

More in article, Pricing New vs. Existing Products (Originally published in B2B Organic Growth Newsletter).

It’s usually a bad idea to ask B2B customers how much they’ll pay for a new product.

57 Price Negotiations

An alarm sounds in their heads and they move into “negotiating” mode… so good luck getting a straight answer. But they do want you to understand their needs. So collect economic data during interviews and tours for value-calculator price modeling later. This is why it’s easier to set proper pricing for a new product than an existing one.

More in article, Getting Top Price for Your New Product (Originally published in B2B Organic Growth Newsletter).

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

56 Improving Customer Outcomes

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 article, The Science behind Great Value Propositions (Originally published in B2B Organic Growth Newsletter).

It is impossible to capture maximum new-product value without side-by-side testing.

36-Side-by-Side-Testing-1

Two conditions must be present to capture maximum value in product pricing. Condition A: Your product provides a benefit the customer values greatly. Condition B: The customer is unable to get this value elsewhere. If you only interview customers, you learn A, but not B. You need rigorous side-by-side testing for B. Few companies do this correctly. Do you?

More in article, 5 Growth Risks You Can Stop Taking (Originally published in B2B Organic Growth Newsletter).

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

Pricing B2B Products - Pricing New vs. Existing Products2

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 article, Pricing New vs. Existing Products (Originally published in B2B Organic Growth Newsletter)