- 24 Apr 2014
From Venture Connection - Workshop 8 at SFU
Speaker: Steven Forth form Net solutions.
- Pricing is a part of the innovation & the product!
- Understanding value provided to customer
- Segmenting the market, and the value added to each segment
You discount your Beta version only and only when you have a very compelling reason! Otherwise it even has to be 3 time more priced than regular pricing.
Features >> Functions >> Benefits >> Value Drivers >> Quantified Value Drivers.
- define the customer
- create the value
- define the product
- price it
- and apply the cost to build it
Cost has nothing do to with pricing!
What do we mean by VALUE ?
- for customer: has nothing to do with pricing
- Value is always relative to an alternatives, even if it is 'doing nothing'
- Price of next best competitive alternative
- we segment our market, when those segments received different values >> pricing
pushing the pricing power:
- Perceived risks
- switching costs
We can patten the pricing model & the product / feature !
Add values with bundling.
- find where the values are
- Then do the fencing and separate customer groups (fencing is a potential pricing metric)
- The relation between the segmentation size, cost for that segment, and the value delivered for that segment.
Fence by / Price by : support, bandwidth, upgrades, messages, storage,
Give credit back for lake of usage in Cloud structure usage
read this as best pricing article : http://blog.priceintelligently.com/blog/?Tag=Pricing+Pages
check this strategy: https://www.woopra.com/pricing/
All B2B software required some consulting services. --> SAS & IBM
SAP makes the implementation and installation hard, to create a huge amount of value with customizing services through service providers in the market.
4 basic style of freemium:
- free trial --> to drive conversions
- Free users add value to your market size . Create community .
- double sided market (Try to create a 2 sided market. Like Credit Card companies. / Nannies & Families (mybesthelper.com))
- people how they did not have to idea why they doing it for FREE!
Use the 'early stage pricing model check list ' you just start pricing.
Key themes for today:
- Pricing is the core of your offer.
- Pricing is a place to innovate
- price is how you frame the value you provide.
- It begins with understanding value to the customer (relative to their alternatives)
- Pricing is more than picking a number