MM-1 How innovator leaves Billions on table
Instead of price point we are trying to understand perceive value. Customer wants large cup holder while porche engine. Porche didn’t make any breakthrough but designed the product around the price. While Chrysler took a hard look on the product. Perfection defined by Fiat.
The key is to rigorously determine the market for new product long before the products are built. And making sure market will pay before embarking the long journey to productising the innovation.
Usually people leave the pricing decision till the end. Hoping they will make the money out of it, not knowing. Price is not just dollar figure. It is an indication of what customer wants and how much he wants it.
Instead of design|build|market|price start with marketing and price and then build.
The monitizing innovation comes in four categories
- feature sock - too many feature, some time unwanted, end up creating the product that does not resonate with customers.
- minivation - despite the right product for the right market is priced too low to achieve its full potential.
- hidden gem - a potential blockbuster product never brought to market.
- undead - no one wants but brought to the market, as a wrong answer to right question. Or the answer to the question no one asking.
You can solve it by
- 1.have willingness to pay talk early.
- 2.don’t force one size fit all.
- 3.product configuration and building is more science than art.
- 4. Choose right pricing and revenue model
- 5. Develop your pricing strategy.
- 6. Draft your bussiness case using CWP
- 7. Communicate your offering clearly and compellingly.
- 8. Understand your customer irrational side.
- 9. Maintain your pricing integrity.