The answer to successful pricing and marketing:  Your Value Logic

     

Pricing is a new game. The market today allows many different pricing models.

Ericsson is leading the way with value based pricing. The money we receive for your fantastic product shall be connected with the value you deliver. Sounds great. And it is. But do you really know your value logic? Do you have the indicators for the value you deliver? Most Value based programs fail because of poor value analysis.

Did you ever visit a fair recently? You probably found all companies communicating “value”. In every stand you probably found messages like:  “We will increase your profits!”, “We will decrease your Opex!” or maybe “We reduce the capex and increase your profits at the same time!”  Could they prove their value offering? Did you see the value logic and how it applied to your business? Probably not. Did you trust the messages? Probably not. We need to prove the value rationale. We need a Value Logic to build trust.

I recently sat down with a product manager in despair. He had created a generic power point on his product for the global sales team. “But how can I do that? They are so very different.” The sales in Brazil has a different need than the sales team in Japan. They perceive the values differently. The frustrated product manager had started going back to present the product, instead of the value it brings. He hadn’t discovered the value logic.

If you want to take a product leap you need to know the value you deliver, and furthermore you need to know the Value Logic. The Value logic is critical for pricing strategies, it is necessary for standing out in the crowd and it is critical for creating your pitch.

Learn how to work with your value logic at our Value Engineering workshop in November.

Many of our clients are living in a complex ecosystem, with technology intensive products, bundling of products and services and demanding deliveries. To define the value logic is difficult. Or, it was. Since a few years back we started developing the Value Tree™.  It is now implemented in a large number clients in their pricing and marketing activities. It is being used as a handover process between product managers and marketing department. It is laying the foundation of the Value Logic creating a consistency in your communication over time and through you organization.

Value Tree

The Value Tree™ is both a model and a process. The process introduces four layers for the value logic. We normally call them Value, Concept, Feature, Realization. (The four layers are easily connected to the Value proposition design model by Osterwalder et al with “Product feature”, “Pain Reliever + Gain Creator”, “Pains + Gains” and “Job to be done”)

The key for the complete concept is to establish great things about our offer in these four layers. And that we build a connection between the different layers. This creates a Value Logic that gives you an unrivaled model to build a communication upon.  The connectors in the Value Tree™ will give you the proof and the ability to stand out. It will give you the possibility to price the value delivery you offer.

In all our training in the last years participants get enthusiastic about the Value Tree™. It has guided them towards a situation where the can communicate the complexity of their product in a simple way.

In addition the Value Tree™ has in every single usage helped the product managers and marketers to discover additional value in their delivery. 

Feel free to download the Value Tree™ whitepaper giving you all the information and a straight path toward consistency in and trust in your marketing. 

 Watch The Value Tree™ video

 

About The Author

Magnus's profession is to turn technology into selling products. He has worked with product management for more than 20 years with electronics, software, services and hardware and is a thought leader within high performance Product Management.