Are you getting paid for the innovative goods and services that you launch into the market? Most companies are not. A great product concept is only the tip of the spear and does not guarantee profitability. In this webcast, pricing-for-profit experts from Holden Advisors will help you identify the common traps of new product pricing and essential guidance on maximizing your profit potential from launch to end of life. During this session, attendees will learn: ~ How to design products that customers need and will be willing to pay for ~ When to use each of the three pricing-for-profit strategies ~ How to recognize the essential guideposts on life cycle transitions and how to adjust your pricing strategy

1. AIPMM Webinar Series
Profit Maximization Across the
Product Life Cycle

2. Ellen
Quackenbush
Our Speakers
Richard
Harrington

3. © 2017 Holden Advisors Corp., Concord, MA 3
What is your product management/marketing purpose?
profitable
“The purpose of business is to create and retain ^ customers”—Peter Drucker“The purpose of business is to create and retain customers”—Peter Drucker

4. Know the foundation of your value
© 2017 Holden Advisors Corp., Concord, MA 4
How do you create and retain profitable customers?
Improve their bottom line
4©2017 Holden Advisors Corp, Concord, MA
Customers buy your products
for one of three reasons:
• Lower costs
• Increased revenue
• Reduced risks
They expect you to:
• Know their business
• Charge a fair price based
on the value delivered

5. Monetized value builds credibility with customers
Feature
Differentiated
product/service
Benefit
How it
addresses a key
business need
Impact
How customers
can measure the
impact
Differential
Financial Value
Incremental $$
that drop to the
bottom-line
Next Best
Competitive
Alternative
What alternative
solutions are
available

6. Successful innovations begin with the customer
Know your
customer’s business
Key process steps
Challenges / needs
Why your solution
beats the alternatives
© 2017 Holden Advisors Corp., Concord, MA 6
Validate/expand with
customers
Expand scope of value
impact (profit centers)
Identify new sources of
value
Drill-down questioning
Go on a value hunt
Cross-functional team
(customer-facing)
Build hypotheses on how
you can drive value
Monetize financial impact
for the customer
Early adopter
profile
Key features /
services
Financial value
guides
innovation
budget

7. Prepare for a successful launch
• Beta test/refine with early adopters
• Build sales tools to qualify accounts
and quantify financial value
• Craft value-based messaging for all
decision-makers (6.8 for B2B sales)
• Drive sales confidence in your value
message and your price
© 2017 Holden Advisors Corp., Concord, MA 7

8. Choose 1 of 3 pricing strategies
1. Skim – Price high to capture
value you deliver
2. Neutral – Price close to
competition
3. Penetration – Use price as main
competitive weapon
© 2017 Holden Advisors Corp., Concord, MA 8

9. Introduction:
Drive value and reduce adoption risk
RISK
VALUE
Clear Advantage
Observability
Complexity
Compatibility
Trialability
Low price is NOT a driver of adoption
Skim pricing for price inelastic early adopters
© 2017 Holden Advisors Corp., Concord, MA 9
Source: Everett Rogers, Diffusion of Innovations

10. Key Events
• More “pragmatic” customers enter
market
• New use cases may require more
service and support
• Competitors enter, often with lower-
cost solutions
• Without value choices, sales may
discount premium product to close
deals
Essential Actions
© 2017 Holden Advisors Corp., Concord, MA 10
Growth:
Expand offerings to drive market
Add flanking “good” offering to
protect premium solution

11. Growth:
Chose the right strategy for your offering
© 2017 Holden Advisors Corp., Concord, MA 11
Introduction Growth Mature Decline
Skim
Best offering
(differentiated)
Penetration
Market growth
Cost advantage
Neutral
Good/better
offering (matches
competition)
**Try to Avoid the Red Zones

12. Maturity:
Prepare for tough negotiations, protect margins
© 2017 Holden Advisors Corp., Concord, MA 12
• Key Events
• More knowledgeable customers
require less support
• Competitors start to match your
differentiators
• Procurement takes over purchase
process
• Essential Actions
• Price value-added services
• Conduct cost-to-serve analysis

13. Develop Give-GetsSM to combat procurement
Price Buyer Poker Player
Customer requests a
discount
Sales accommodate with
bundle of lower value
“Thanks for
providing a
lower price
option”
“That is
ridiculous!
Everyone
offers that”
Customer’s reaction
© 2017 Holden Advisors Corp., Concord, MA 13
Source: NWB

14. Consider Give-GetsSM in three offering
parameters
Give-GetsSM quantify value provided by different departments to empower sales to
force price-value tradeoffs during negotiations
Products
• Standard
• Custom
Services
• Lead time
• Order flexibility
• Process optimization
• Supply continuity
• Dedicated sales rep
• R&D support
Terms and Conditions
• Pricing models
• Payment terms
© 2017 Holden Advisors Corp., Concord, MA 14

15. Decline:
Strengthen or exit gracefully
© 2017 Holden Advisors Corp., Concord, MA 15
Retrench Consolidate Harvest
Concentrate on strongest
segments
Strengthen your market
leading position
Phased exit of industry

16. Summary
Successful innovation requires a laser-
focus on how you drive bottom-line profit
improvements for customers
✓
The value you deliver changes across the
lifecycle—based on competition and
changing customer needs
✓
Always prepare for the next stage—be
proactive, not reactive✓

17. Thank you!
© 2017 Holden Advisors Corp., Concord, MA 17
Ellen Quackenbush
Senior Value Expert
equackenbush@holdenadvisors.com
Richard Harrington
Pricing and Value Consultant
rharrington@holdenadvisors.com
www.holdenadvisors.com

18. Upcoming Webcast
December 1, 2017
How to Hire a Product Management or Product Marketing Contractor
WWW.AIPMM.COM/AIPMM_WEBINARS
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