Pricing is the fastest and most effective way for companies to increase profitability. Studies show that a 1% increase in pricing has a greater positive impact on profitability than does a 1% increase in sales volume or a 1% decrease in costs. Unfortunately, too many companies think tactically about pricing and do not effectively price for profitability. In this webinar, we’ll discuss common mistakes that companies make in pricing and identify best pricing practices that will enable them to maximize company profitability.
Key Takeaways from participating in this webinar:
Understand key principles for defining pricing
Connect your pricing strategy to your Go-to-Market strategy
Discover ways to define your price based upon your value proposition
1. Profitable Products Sell Value: Why
Value-Based Pricing Wins
Tom Evans
CompellingPM
@compellingpm
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2. DFW Product Group
• DFW Product Group is the premier product management and
marketing association in the Dallas/Fort Worth metroplex
• 300+ active members
• 2013 - 2015 roadmap includes webinar series, networking
mixers, and ProductCamp DFW
• Website: http://dfwproductgroup.org/
• LinkedIn: https://www.linkedin.com/groups?gid=2796125
• Twitter: @DFWProductGroup
• Email: info@dfwproductgroup.org
• Actively seeking new members, volunteers, and sponsors
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3. Special offer from CompellingPM at
the end of the webinar.
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4. Profitable Products Sell Value: Why
Value-Based Pricing Wins
Tom Evans
CompellingPM
@compellingpm
Copyright 2013 - 2015. The Lûcrum Group, Inc. 4
6. Critical Importance of Pricing
A 1% improvement in
pricing has a much greater
impact on profitability
than a 1% improvement in
cost or volume.
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7. How Too Many Companies Price
• Price to match the competition
• Evaluate the cost of delivering the product
and add a markup for target margin
• Price based upon gut feeling
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8. Poll Question 1
Which pricing challenge do you see most often in
your company?
a) Price to match competition
b) Cost plus pricing
c) Price based upon gut feeling
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9. Pricing Definition
What a customer is willing to pay in
compensation to receive the benefits of a
product (good or service)
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10. Approaches to Pricing
• Cost-Based
– Based upon your Cost to Deliver the product with
some margin added on.
• Competition-Based
– Match and follow the competition’s price.
• Value-Based
– Price based upon market’s perceived value.
– Based upon the value you want the market to
perceive.
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14. Perceived Benefits
Objective (Quantifiable)
• Save time
• Reduce cost
• Increase revenue
• Better asset utilization
• Improve customer
satisfaction
• Etc.
Subjective
• Prestige
• Be part of the crowd
• Healthy
• Safer
• Lower risk
• Etc.
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19. Strategy v. Pricing – Case Study
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20. • At $2.79 for
all regular
garments dry
cleaned you'll
receive great
quality at the
absolute best
price.
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21. • Make your life simpler and more convenient,
and though we aren’t the cheapest in town, we
are the best, and we give our customers the best
value for their money.
• Jack Brown Cleaners saves you precious time so
you can move on to more interesting things than
cleaning your clothes. Things that are important
to your family, like spending time together.
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22. • A Healthier Way - Most dry cleaners are still using
industrial solvents to clean your clothes. Yikes!
EcoClean’s non-toxic method cleans dry-clean-only
garments using biodegradable soaps, conditioners,
and pure, clean water.
• Better For Austin & The Planet - EcoClean is Austin’s
most environmentally sustainable choice for
cleaning dry-clean-only garments. EcoClean is the
best choice for the environment, your clothes and
most importantly, you and your family.
22Copyright 2013 - 2015. The Lûcrum Group, Inc.
23. Challenges to Value-Based Pricing
• Sales people claim that price is too high
• Being able to quantify subjective value
• This is the way we have always done it (cost-
plus)
• It’s not fair pricing
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24. Summary
• Value-based pricing will deliver best
profitability
• Strategy drives pricing
• Communicate & sell the value
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25. Go-to-Market Webinar Series
http://compellingpm.com/go-to-market-webinar-series-with-dfw-product-group/
Webinar Title Date
The Strategic Role of Product Management & Product Marketing in Driving Product
Revenue & Success
Apr 23
Developing a Deep Understanding of Your Target Markets – The Starting Point for Great
Product Marketing
June 11
Define a Powerful Go-to-Market Strategy That Sets Your Product Apart June 25
Great Requirements Form the Foundation for Successful Products July 16
Profitable Products Sell Value: Why Value-Based Pricing Wins August 13
From Messaging Nightmare to Messaging Delight: How to Create a Powerful Messaging
Platform
Sept 17
Create Effective Sales & Marketing Tools That Actually Get Used By Sales & Prospects Oct
Nothing Happens Until Someone Sells Something: Enabling Your Sales Channel to Success Nov
Driving the Marketing and Sales Funnel to Close Deals: What Product Marketers Must
Know and Do
Dec
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26. Next Webinar
From Messaging Nightmare to
Messaging Delight: How to Create a
Powerful Messaging Platform
September 17, 2015
Copyright 2013 - 2015. The Lûcrum Group, Inc. 26
http://compellingpm.com/go-to-market-webinar-series-with-dfw-product-group/
27. Upcoming Austin PM2 Training
• Optimal Product Management & Product Marketing
– Sep 21 – 23
– Dec 7- 9
• AIPMM Certifications – Certified Product Manager
(CPM)
– Feb 16 – 17
More dates/locations - www.280group.com
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28. Free 1 Hour PM/PMM Consult
• First ten to submit information on form
• http://compellingpm.com/freeonehour/
• Please include background on topic or issue
• Must include company info (no Gmail)
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