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• Win one of three copies of Mark's book
“Pricing with Confidence: 10 Ways to Stop
Leaving Mone...
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Today’s Speakers
Moderator:
Hector Del Castillo, CPM, CPMM
Presenters:
Mark Burton
Vice Preside...
Innovate for Growth, Price for Profit
© 2014 Holden Advisors Corp., Concord, MA
Innovation is the essential growth engine
The most innovative
companies have hig...
© 2014 Holden Advisors Corp., Concord, MA
Innovating is one thing…getting paid is another
9
Even when companies
do innovat...
© 2014 Holden Advisors Corp., Concord, MA
…And new offerings underperform
10
• Limited market adoption
• Low ASP at launch...
© 2014 Holden Advisors Corp., Concord, MA
POLL #1: How many of these innovation issues
are you experiencing?
a. Limited ma...
© 2014 Holden Advisors Corp., Concord, MA
What are the impacts of getting it wrong?
12
• Underpriced, or overpriced,
produ...
© 2014 Holden Advisors Corp., Concord, MA
To pricing and positioning right, integrate a value-
based approach and ask the ...
© 2014 Holden Advisors Corp., Concord, MA
POLL #2 : How does your organization set
new product pricing?
a. Based on produc...
© 2014 Holden Advisors Corp., Concord, MA
Pricing and value focus must be integrated
with the NPD process
15
1 Source: © 1...
© 2014 Holden Advisors Corp., Concord, MA
The best tool for setting initial price levels?
Case ROISM
: An Innovator’s Rese...
© 2014 Holden Advisors Corp., Concord, MA
Case study: Valuing an innovative medical
imaging solution
• 45 interviews acros...
© 2014 Holden Advisors Corp., Concord, MA
From the base analysis, value profiles and simple
tools are created
18
Inputs Sa...
© 2014 Holden Advisors Corp., Concord, MA
Next, the value profile is developed for each
value segment
19
© 2014 Holden Advisors Corp., Concord, MA
Planning for pricing begins early and continues
through the lifecycle
20
1 Sourc...
© 2014 Holden Advisors Corp., Concord, MA
POLL #3: How do you prepare sales to sell
new products?
a. White papers
b. Produ...
© 2014 Holden Advisors Corp., Concord, MA 22
Value management does not end at launch
Emerging High Growth Mature Decline
P...
© 2014 Holden Advisors Corp., Concord, MA 23
Case Study: Supplier of bulk materials for
the construction industry
The Situ...
© 2014 Holden Advisors Corp., Concord, MA 24
Simple questions formed the basis for
identifying key opportunities
Customer ...
© 2014 Holden Advisors Corp., Concord, MA
Three critical actions to begin your value-
based journey
25
• Pick a product
– ...
© AIPMM 2014 www.aipmm.com
Q & A
Moderator:
Hector Del Castillo, CPM, CPMM
Presenters:
Mark Burton
Vice President, Co-Foun...
© AIPMM 2014 www.aipmm.com
Athens, Greece
Belgrade, Serbia
Athens, Greece
Follow the links above for more information, or ...
© AIPMM 2014 www.aipmm.com
Belgrade, Serbia
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Follow the links above for more information, or contact:
cert...
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Course & Location Dates Days Time
CPM® Certification Prep Course & Exam
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Innovate for Growth, Price for Profit

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In today's intensely competitive market, new product innovation is no longer enough. Too often new products fail because they don't deliver tangible financial value to customers or because sales is not equipped to communicate that value.

It's all about aligning everyone in your organization on how to create value for your customers and get paid for the value you deliver.

Join Mark Burton and Ellen Quackenbush as they share insights on how to add value principles and "pricing thinking" into your existing product development and launch processes to drive market adoption and ensure profitable growth for your new product portfolio.

About The Speakers:
Mark Burton, Co-founder and VP, Consulting, Holden Advisors
Mark is responsible for ensuring successful client outcomes at Holden Advisors. He is the driving force in the firm's efforts in developing offering, pricing, and sales strategies for Fortune 1000 B2B companies. In this capacity he has developed new product offering and pricing solutions for firms in industries such as IT outsourcing, semiconductor, financial and business services, and enterprise software and maintenance.

Ellen Quackenbush, Specialist, Customer Value Research, Holden Advisors
Ellen is responsible for defining and executing customer value research at Holden Advisors. She guides projects on how to define product and services solutions to deliver differentiated customer value, set prices to capture that value, and empower sales to communicate that value and defend price, even in difficult customer negotiations.

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It is the world's largest professional organization of product managers, brand managers, product marketing managers and other product team professionals who are responsible for guiding their organizations, or clients, through a constantly changing business landscape.

AIPMM's certification programs are internationally recognized because they allow product professionals to demonstrate their expertise and provide corporate members an assurance that their product management and marketing teams are operating at a high competency level.

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Innovate for Growth, Price for Profit

  1. 1. © AIPMM 2014 www.aipmm.com AIPMM Webinar Series www.aipmm.com
  2. 2. © AIPMM 2014 www.aipmm.com
  3. 3. © AIPMM 2014 www.aipmm.com AIPMM Certifications AIPMM offers globally recognized certifications: • Certified Product Manager (CPM®) • Certified Product Marketing Manager (CPMM®) • Agile Certified Product Manager (ACPM®) • Certified Innovation Leader (CIL®) • Certified Brand Manager (CBM®)
  4. 4. © AIPMM 2014 www.aipmm.com Use AIPMM: #AIPMM ProdBOK: #ProdBOK Holden Advisors #Holdenadvisors Follow AIPMM: @AIPMM Holden Advisors @HoldenAdvisors Mark Burton @M_R_Burton Tweet!
  5. 5. © AIPMM 2014 www.aipmm.com • Win one of three copies of Mark's book “Pricing with Confidence: 10 Ways to Stop Leaving Money on the Table.” Participate and Win!
  6. 6. © AIPMM 2014 www.aipmm.com Today’s Speakers Moderator: Hector Del Castillo, CPM, CPMM Presenters: Mark Burton Vice President, Co-Founder 617-285-2963 mburton@holdenadvisors.com Ellen Quackenbush Customer Value Specialist 978-405-0020 x1033 equackenbush@holdenadvisors.com Holden Advisors www.holdenadvisors.com
  7. 7. Innovate for Growth, Price for Profit
  8. 8. © 2014 Holden Advisors Corp., Concord, MA Innovation is the essential growth engine The most innovative companies have high sales growth and receive a premium on expected earnings. 8 23% 52% 12-month sales growth Stock Innovation Premium Top 20 Most Innovative Firms Source: Forbes Magazine, Aug 2013
  9. 9. © 2014 Holden Advisors Corp., Concord, MA Innovating is one thing…getting paid is another 9 Even when companies do innovate, by the time they worry about pricing, there isn’t enough time or information to price effectively!
  10. 10. © 2014 Holden Advisors Corp., Concord, MA …And new offerings underperform 10 • Limited market adoption • Low ASP at launch • Reliance on discounting to close deals • Missed revenue targets • Low ROI on product development costs
  11. 11. © 2014 Holden Advisors Corp., Concord, MA POLL #1: How many of these innovation issues are you experiencing? a. Limited market adoption b. Lower than expected prices at launch c. Missed revenue targets d. Low ROI on product development costs e. None…we are hitting on all innovation cylinders 11
  12. 12. © 2014 Holden Advisors Corp., Concord, MA What are the impacts of getting it wrong? 12 • Underpriced, or overpriced, products and services • Features too few customers care about • Limited differentiation versus competition • Limited adoption in the market • Lack of tools puts salespeople in the stone age of selling
  13. 13. © 2014 Holden Advisors Corp., Concord, MA To pricing and positioning right, integrate a value- based approach and ask the right questions 13 • What is a customer’s willingness to pay? • At what price can we drive market share? • How do we price to cover our costs? • What is the competitive price? The Wrong Questions The Right Questions • How much financial value can we drive for the customer? • What are the competitive alternatives? • Given the value we drive, how much can we afford in costs? • Given our business objectives, how can we best bring this product to market?
  14. 14. © 2014 Holden Advisors Corp., Concord, MA POLL #2 : How does your organization set new product pricing? a. Based on product costs and a target margin b. To recover development costs c. Based on the price of competitive products d. Based on an estimate of customer value e. I am not really sure how prices are set 14
  15. 15. © 2014 Holden Advisors Corp., Concord, MA Pricing and value focus must be integrated with the NPD process 15 1 Source: © 1998-2014, AIPMM, All Rights Reserved 1 By embedding customer value principals early in the product development process, firms: • Drive development efficiency • Hit the market window • Target early adopters for early wins • Create high-impact sales messaging • Develop confidence in pricing
  16. 16. © 2014 Holden Advisors Corp., Concord, MA The best tool for setting initial price levels? Case ROISM : An Innovator’s Research Tool • Measures an innovation’s financial value – Actual dollar value – Calculated in comparison to an alternative solution(s) • Surfaces value using an exploratory technique – For new products/technologies – When part of a larger, more complex system • Enables building of sales tools to communicate value 16
  17. 17. © 2014 Holden Advisors Corp., Concord, MA Case study: Valuing an innovative medical imaging solution • 45 interviews across 4 segments • With nothing but a spec sheet of proposed features • Research led to a reprioritization of key features • Based on hard quantification of value 17 $0.18 $9.56 $2.11 $1.04 $3.62 $1.83 $5.67 $1.60 $11.08 Case ROI ($/case) Product met all key launch targets and is now in its second generation
  18. 18. © 2014 Holden Advisors Corp., Concord, MA From the base analysis, value profiles and simple tools are created 18 Inputs Savings Per Case Facility Type Small Hosptial Physician Efficiency $ 3.50 No. of Cases 10,000 Staff Efficiency $ 1.75 Inefficiency of Current System 20% Operating Room Usage $ 6.10 Physician Time / Case (hrs) 0.5 Case Handling $ 1.40 % Cases from OR 15% Remote Sites $ 3.62 % Cases from Remote Sites 30% Total Savings $ 16.37 Current External Diagnostics 10% Revenue Fee for External Diagnostics $ 142.00 External Diagnostics $ 1.83 Costs Storage Costs $ 4.20 Equipment costs $ 5.80 Net Financial Benefit $ 12.62 Equipment Payback 5.4 Months Value ProfileProspect Profile
  19. 19. © 2014 Holden Advisors Corp., Concord, MA Next, the value profile is developed for each value segment 19
  20. 20. © 2014 Holden Advisors Corp., Concord, MA Planning for pricing begins early and continues through the lifecycle 20 1 Source: © 1998-2014, AIPMM, All Rights Reserved 2 Source: Pricing with Confidence. Holden & Burton, 2008 2 • Customer problem definition • Connect use cases to customer value • Competitive set/ alternative solutions • Customer value quantification • Initial price range • Cost budget • Value-based customer segmentation • Offering structure • Final pricing • Sales tools o Early adopter check list o Messaging • Post-launch value management • Flanker to combat low-price entrant • Re-differentiate offering (new features or services) 1 2 • Beta test to validate use cases and value drivers • Low price in exchange for customer use data
  21. 21. © 2014 Holden Advisors Corp., Concord, MA POLL #3: How do you prepare sales to sell new products? a. White papers b. Product spec sheets c. Target customer/early adopter check lists d. Sales tools to demonstrate value to each customer segment e. Just a price list 21
  22. 22. © 2014 Holden Advisors Corp., Concord, MA 22 Value management does not end at launch Emerging High Growth Mature Decline Profit Time Segment and Re-differentiate Leverage drivers of adoption for early wins Introduce flanker to deflect low-priced entrant Harvest value from loyal, Price-insensitive customers
  23. 23. © 2014 Holden Advisors Corp., Concord, MA 23 Case Study: Supplier of bulk materials for the construction industry The Situation • Company suffered significant price volatility as a result of changes in supply-demand situation and had difficulty consistently returning its cost of capital The Task • Through researching value creation opportunities with customers, the value of key products was uncovered and new services to increase customer productivity were introduced. This enabled the firm to increase prices to target customer segments. The Result • The firm was able to increase average selling prices by over 10% over a 4 year time period, even as overall industry demand dropped by 6%
  24. 24. © 2014 Holden Advisors Corp., Concord, MA 24 Simple questions formed the basis for identifying key opportunities Customer Supplier I really need faster truck loading Reduce hourly operating costs How much? $90 per hour How many tons per truck? 16 We can save 30 minutes= $45 or $2.81 per ton Why?
  25. 25. © 2014 Holden Advisors Corp., Concord, MA Three critical actions to begin your value- based journey 25 • Pick a product – A new innovation or an existing product in need of a refresh • Build a cross-functional team to assess customer value – Involve the customer early on • Pilot with sales to assure value capture, even in tough negotiations
  26. 26. © AIPMM 2014 www.aipmm.com Q & A Moderator: Hector Del Castillo, CPM, CPMM Presenters: Mark Burton Vice President, Co-Founder 617-285-2963 mburton@holdenadvisors.com Ellen Quackenbush Customer Value Specialist 978-405-0020 x1033 equackenbush@holdenadvisors.com Holden Advisors www.holdenadvisors.com
  27. 27. © AIPMM 2014 www.aipmm.com Athens, Greece Belgrade, Serbia Athens, Greece Follow the links above for more information, or contact: certification@aipmm.com. Upcoming Courses
  28. 28. © AIPMM 2014 www.aipmm.com Belgrade, Serbia Upcoming Courses Follow the links above for more information, or contact: certification@aipmm.com.
  29. 29. © AIPMM 2014 www.aipmm.com Upcoming Courses Course & Location Dates Days Time CPM® Certification Prep Course & Exam Seattle, WA McLean, VA May 5-6, 2014 June 9-10, 2014 M, T 8:30 am – 5 pm CPMM® Certification Prep Course & Exam Seattle, WA McLean, VA May 7-8, 2014 June 11-12, 2014 W, Th 8:30 am – 5 pm ACPM® Certification Prep Course & Exam Seattle, WA McLean, VA May 9, 2014 June 13, 2014 F 8:30 am – 5 pm For more information, visit: Transform Your Career.
  30. 30. © AIPMM 2014 www.aipmm.com Please Join Us Again! 9 Things Exceptional Product Team Managers Do March 21, 12 pm ET Improve Product Design Through Gamification March 28, 12 pm ET How Software Analytics Can Improve Your Products April 4, 12 pm ET AIPMM Webinar Series: http://aipmm.com/aipmm_webinars Global Product Management Talk http://www.blogtalkradio.com/prodmgmttalk Announcements: http://www.aipmm.com/subscribe Call For Speakers: http://www.boldpm.com/call_for_speakers LinkedIn: http://www.linkedin.com/company/aipmm Membership: http://www.aipmm.com/join.php Certification: http://aipmm.com/html/certification/

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