Innovation is a necessity for B2B companies seeking growth. Yet, even game-changing innovation requires a careful assessment of how much customer value is created and ultimately captured in price. Otherwise, your company loses precious margin and the means to sustain future innovation. Do you truly know how much value your innovations are providing to your customers? LeveragePoint is delighted once more to have noted pricing thought-leader and author, Stephan Liozu share his practical experience and techniques for monetizing the differential value of innovation. He will discuss how industry leading companies embed value management into their new product development process. Learn how to link innovation, customer value and pricing for your new products in 2013.

1. Monthly Webinar Series – January 23, 2013
Maximizing ROI In
Product Development
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2. Sponsored by LeveragePoint
the Software Solution for Value-based Pricing
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3. Today’s Presenter
Maximizing ROI In Product Development
Dr. Stephan Liozu (www.stephanliozu.com) is the
Founder of Value Innoruption Advisors and specializes in
disruptive approaches in innovation, pricing and value
management. He has worked for Fortune 500 companies
specializing in crafting and designing unique innovation and
business strategies leading to differentiated business models.
Stephan moderates brainstorming, mind mapping and creativity
sessions with executives, partners and customers to generate
ideas, value models, value propositions and innovation strategies.
He recently earned a PhD in Management at Case Western
Reserve University.
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4. Agenda
• The Focus On Value Management
• Trends In the New Product Development Process
• Opportunities To Improve the NPD Process and Maximize
Return-on-Investment
• Key Takeaways
• Q&A
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5. Personal Observations
Competitive pressures have increased significantly….
flat is becoming the new growth….and cost cutting is not a
sustainable strategy.
Innovation has become the name of the game!
But the ROI of innovation is being more scrutinized.
Traditional way of screening projects might not work as well
now. New-to-the-world breakthrough innovations need to be
measured in terms of profitability and differential value.
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6. Innovation, Value & Pricing
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7. Observations in Value & Pricing
in the New Product Development Process
• Degree of differentiation of value propositions is rarely formally
measured.
• Very little pricing research conducted up front in the process to validate
value drivers and feed the monetization process.
• Value & pricing information are not consistently managed through
gates.
• Pricing information might be part of formal documents but not dedicated
value and pricing deliverables through development stages.
• Economic value estimation is not consistently and scientifically
conducted and value drivers are rarely monetized.
• Pricing decisions are often based on legacy pricing (old generation +
%) and/or premium pricing (competition +%).
• Stage-Gate projects are traditionally evaluated/screened using
matrices combining risk/attractiveness, effort/benefit, projected
cost/projected price, volume/margin contribution, strategic fit, etc.
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8. New Product Value Assessment is Difficult
*APQC=American Productivity & Quality Center; NPD=New Product Development
Source: 2010 Stage Gate International
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9. A New Way to Screen Innovations
Based on Margin & EVE®
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10. Value in the NPD Process
• Successful new product development is about
– Creating unique value propositions and USP’s
– Assessing customer willingness to pay
– Getting customers to pay for it
• Start with an internal common language of value (R&D, marketing,
technology, sales, finance).
• Move considerations of value upstream in NPD process (USP’s and
UVP’s).
• Build strong & scientific value analysis into new product development
checkpoints and documents (e.g., the market requirements document) to
make it work.
• Get internal team consensus on the value quantification levels to gain
internal credibility and create belief.
• Make sure customers’ economic value gained defines and prioritizes
product and engineering requirements.
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11. Integrated Value Gates
Opportunity Viability Gate Gate Test and Gate Post
Gate 1 Development Launch
Identification Assessment 2 3 Piloting 4 Launch
Value Driver Value Initial Value- Define Segment Communicate
dynamic refinement of value models.
Identification: Impact/Cost –to- based Price Strategy & Value & Validate
Track metrics, post-launch debrief;
serve Analysis: Established: Pricing WTP:
Identify and
Structure:
document value Potential service Establish first Communicate
proposition; value constraints draft of value- Refine value- value messages
proposition must identified; test based price based pricing by segment
be linked to at cost-to-serve based on EVE®, levels, define supporting entry-
least one strong relative to value value sharing value messages level pricing
customer value impact; additional position and by market structure;
driver or value drivers pricing segments; define establish quick
USP/UVP*; identified. moderator; formal pricing feedback on
establish VOC establish structure customer WTP.
and value needs sensitivity Modify EVE®
(cost savings or analysis and models based on
incremental market potential. initial feedback.
revenues)
Value to Price Development Process
*USP = Unique Selling Proposition; UVP = Unique Value Proposition; VOC=Voice of Customer
Source: 2004 SPG Insights – Adapted from John Hogan
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12. Key Take-aways!
Innovators should pay closer attention to
differentiation and value propositions.
Monetizing the differential value of innovation helps
capture customer value through pricing.
Innovation projects can be sorted on the basis
of both gross margin & differential economic value.
Value and pricing should be reviewed at each
gate of the NPD/Stage-gate process.
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13. Our Next Webinar – February 2013
• Harry Macdivitt
Director, Axia Value Solutions
• Topic: Using “So-What” Analysis to Identify Value
• February 27, 2013 – 11am EST
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14. Thanks for Watching!
Stephan Liozu
sliozu@case.edu
(484) 347-1458
@StephanLiozu
sales@leveragepoint.com
www.leveragepoint.com
(617) 252-2876
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