How to Price a New Product
A lot of confusion on 101 how to do an initial price on go to market. Some thoughts.
Negative on starting with comparable. New product = new problem solved. You created new product to solve a problem for a customer, the problem should have been defined as unique, or at a minimum something you can do faster - cheaper - better. Your product should include tangible (hard solution) plus services (apply to MY problem) and support (problems for customers are iterative, so are solutions). First practice is to follow why you created solution, i.e. who did you solve problem for and want is the VALUE TO THEM. Your solution price is based upon value to problem solution, inclusive of above elements. This actually is done during formulation of solution value to bounce off of cost (margin) of creating solution - but is done many times ad hoc after solution creation. Your go to market should be defined as differentiated to the solution and priced to customer value balanced against margin requirements.
Initial pricing should be BEFORE creation of solution, but reality on software and SAS it is after because of the lower solution creation costs, or because it is a specific solution for a customer that holds value for others in the market. Please value it to the customer problem solved - you will be amazed at how high price points can be to pain points removed.
No comments:
Post a Comment