The document describes courses offered by Product School to help product managers gain skills. It includes part-time courses in product management, coding, data analytics, digital marketing, UX design, product leadership, and corporate training. The document also previews an upcoming speaker, Jason Rosen, who will discuss how to price cloud products.

1. www.productschool.com
How to Price Cloud Products by SAP
fmr Sr Director of Product

2. Join 35,000+Product
Managers on
Free Resources
Discover great job
opportunities
Job Portal
prdct.school/PSJobPortalprdct.school/events-slack

3. C O U R S E S
Product
Management
Learn the skills you need to land
a Product Manager job

4. C O U R S E S
Coding
for Managers
Build a website and gain the
technical knowledge to lead
software engineers

5. C O U R S E S
Data Analytics
for Managers
Learn the skills to understand web
analytics, SQL and machine learning
concepts

6. C O U R S E S
Learn how to acquire more users
and convert them into clients
Digital Marketing
for Managers

7. C O U R S E S
UX Design
for Managers
Gain a deeper understanding of your
users and deliver an exceptional end-to-
end experience

8. C O U R S E S
For experienced Product Managers
looking to gain strategic skills needed
for top leadership roles
Product
Leadership

9. C O U R S E S
Corporate
Training
Level up your team’s Product
Management skills

10. Jason Rosen
T O N I G H T ’ S S P E A K E R

11. How to Price
Cloud Products
Jason Rosen
June 12, 2019

12. My Product Management
Journey

13. As a Product Manager,
I want to tell you about...
Product Management & Pricing
Creating Value for Customers
Value Selling vs. Feature Selling
Pricing Models
Pricing Methodologies
so you can grow your PM perspective

14. Pricing and Product Management
Lots of books about Startups and Product-Market-
Fit, which often imply pricing:

15. Creating Value for Customers
Product-Value Cycle
ProductProduct Managers Customers
Create Value
Re
Payment
Return Value

16. Product Managers:
Deliver products that create disproportionate value
for customers
Customers:
1. Use product and receive value
2. Pay for product and return some value back to
product managers
Value Cycle Economics:
Value created and received must be significantly
greater than the payment for the product

17. Pricing and Product Management
01 PM’s are responsible for researching Customer needs,
Competitor offerings, Product-Market-Fit
02 PM’s identify customer personas and determining product
features that provide value to customers
03 Value of new features and pricing should be considered before
investing in product features. Are the features worth building?
Will customers pay for them? Where to invest and where to
divest?
Pricing needs to be owned & aligned by Product:

18. There are Many Ways to Pay
Time and Attention - monetize other customers
Data - sell access to insights
Influence - attract other customers, increase adoption
Money - transferrable value

19. Value Selling vs. Feature Selling
Customers don't buy features, they buy outcomes
that create value:

20. Value Selling vs. Feature Selling
Don’t SELL features… SELL outcomes!
Don’t PRICE features… PACKAGE features!

21. Packaging & Metrics
Packaging:
Bundling of features into a product offering
Metric:
Unit by which you charge for your product

22. Packaging

23. Metric Examples
Per User
API Call
Credits
Revenue
Order / Sale
Click
Compute Hour
Storage
Bandwidth

24. Packaging & Metrics
01 Packaging must represent how customers use the product.
Features must create value for the intended user.
02 Metric must represent a unit your customer understands.
03 Metric must represent predictable consumption and billing.
Effective Packaging and Metrics:

25. Pricing Models
Free
Examples: social networks, search
“You're Not the Customer; You're the Product”
… not really
You are a customer and receiving value, just you are
paying with time and attention
Other customers are paying cash for access to you

26. Pricing Models
Freemium
Examples: games, apps
Small percentage convert to cash customers. Non-cash
customers still pay with time, attention, and data.
Able to use core product for free. Additional packages or
metrics require cash payment

27. Pricing Models
Tiered
Examples: B2B, productivity
Features packaged based on type of user or functions
performed.
Each tier represents a different user / customer persona
Pricing reflects benefits received by the persona
Typically there are volume price breaks as you go up the tiers

28. Pricing Models
Pay-as-you-go / Pay-per-use
Examples: payments, advertising, PaaS, IaaS
Metrics are often very granular
Only pay for what you use
Can scale-up and scale-down as needed - allows for
fluctuating volumes
Per-unit, may be more expensive for the customer than
reserve bulk buying

29. Customer Willingness to Pay
Customersmust be willing to pay to receive the value
Price Sensitivity - what is the most a customer is
willing to pay?
Customer must receive value (ROI) using the product
Value customer receives must be a multiple of cost
(at least 5x - 10x)

30. Customer Willingness to Pay Example
Say you are self-employed and bill $100/hour. You spend 12 hours per week
managing your books and invoicing customers. There are approx 4.3 weeks
per month.
QuickBooks estimates that their customers save approx 40 hours per
month on accounting.
Without QuickBooks:
12 hrs/wk x 4.3 wks/mon = 51.6 hrs/mon on accounting
With QuickBooks:
51.6 hrs/mon - 40 hrs/mon = 11.6 hrs/mon on accounting
Let’s say 20 of those 40 saved hours can become billable hours:
20 hrs/mon * $100/hour = $2000 more made per month
ROI With Quickbooks:
$2000 benefit/mon ÷ $70 subscription/mon = 2800% ROI

31. Cost Plus + Value Pricing
Cost of
Sales
Minimum
Margin
Hosting Costs
Licensing / Subscription Costs
Dev Ops costs
Support Costs
Floor Price
(minimum price
willing to sell)
Value
Margin
Value Range
(where price ~ 10% of
value customer receives)
List Price
(max customer
willing to pay)

32. Floor Price:
Minimum price willing to sell
List Price:
Maximum customer is willing to pay
Sale Price:
Actual price customer paid for product

33. Today we discussed:
How PM’s create value for customers
How customers pay for value
Selling and Pricing value
Pricing Models
Pricing Methodologies

34. Thank you!
Feel free to contact me with any
questions or comments:
https://www.linkedin.com/in/rosenjason/ Jason Rosen

35. www.productschool.com
Part-time Product Management, Coding, Data Analytics, Digital
Marketing, UX Design, Product Leadership courses and
Corporate Training