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Capture	
  More	
  Value	
  from	
  Your	
  
Products	
  and	
  Capabili7es	
  
Mark	
  S'ving	
  
•  Director	
  of	
  Pricing	
  at	
  Maxim	
  Integrated	
  
•  Ph.D.	
  in	
  pricing	
  from	
  UC	
  Berkeley	
  
•  1996-­‐2000	
  Professor	
  of	
  Marke'ng	
  at	
  Ohio	
  State	
  
–  Pricing,	
  market	
  research,	
  marke'ng	
  models	
  
•  Currently	
  teach	
  pricing	
  with	
  UC	
  Irvine	
  
•  “Impact	
  Pricing:	
  Your	
  Blueprint	
  for	
  Driving	
  Profits”	
  
•  Blogger	
  at	
  Pragma'cPricing.com	
  
•  Frequent	
  speaker	
  and	
  coach	
  on	
  pricing	
  
2	
  
WHAT	
  IS	
  PRICING?	
  
Pricing	
  is	
  …	
  
Complex	
  
Powerful	
  
Important	
  
Fun	
  
Psychological	
  
Qualita've	
  
Quan'ta've	
  
Never	
  perfect	
   Specific	
  
Customizable	
  Dependent	
  
Emo'onal	
  
Informa'on	
  Secret	
  
Risky	
  
Instantaneous	
  
Grading	
  
Common	
  
Dynamic	
  
A	
  process	
  
Pricing	
  is	
  …	
  
Complex	
  
Powerful	
  
Important	
  
Fun	
  
Psychological	
  
Qualita've	
  
Quan'ta've	
  
Never	
  perfect	
   Specific	
  
Customizable	
  Dependent	
  
Emo'onal	
  
Informa'on	
  Secret	
  
Risky	
  
Instantaneous	
  
Grading	
  
Common	
  
Dynamic	
  
A	
  process	
  
Pricing	
  is	
  …	
  
Complex	
  
Powerful	
  
Important	
  
Fun	
  
Psychological	
  
Qualita've	
  
Quan'ta've	
  
Never	
  perfect	
   Specific	
  
Customizable	
  Dependent	
  
Emo'onal	
  
Informa'on	
  Secret	
  
Risky	
  
Instantaneous	
  
Grading	
  
Common	
  
Dynamic	
  
A	
  process	
  
Pricing	
  is	
  …	
  
Complex	
  
Powerful	
  
Important	
  
Fun	
  
Psychological	
  
Qualita've	
  
Quan'ta've	
  
Never	
  perfect	
   Specific	
  
Customizable	
  Dependent	
  
Emo'onal	
  
Informa'on	
  Secret	
  
Risky	
  
Instantaneous	
  
Grading	
  
Common	
  
Dynamic	
  
A	
  process	
  
Pricing	
  is	
  …	
  
Complex	
  
Powerful	
  
Important	
  
Fun	
  
Psychological	
  
Qualita've	
  
Quan'ta've	
  
Never	
  perfect	
   Specific	
  
Customizable	
  Dependent	
  
Emo'onal	
  
Informa'on	
  Secret	
  
Risky	
  
Instantaneous	
  
Grading	
  
Common	
  
Dynamic	
  
A	
  process	
  
Pricing	
  is	
  …	
  
Complex	
  
Powerful	
  
Important	
  
Fun	
  
Psychological	
  
Qualita've	
  
Quan'ta've	
  
Never	
  perfect	
   Specific	
  
Customizable	
  Dependent	
  
Emo'onal	
  
Informa'on	
  Secret	
  
Risky	
  
Instantaneous	
  
Grading	
  
Common	
  
Dynamic	
  
A	
  process	
  
Pricing	
  is	
  …	
  
Complex	
  
Powerful	
  
Important	
  
Fun	
  
Psychological	
  
Qualita've	
  
Quan'ta've	
  
Never	
  perfect	
   Specific	
  
Customizable	
  Dependent	
  
Emo'onal	
  
Informa'on	
  Secret	
  
Risky	
  
Instantaneous	
  
Grading	
  
Common	
  
Dynamic	
  
A	
  process	
  
Pricing	
  is	
  …	
  
Complex	
  
Powerful	
  
Important	
  
Fun	
  
Psychological	
  
Qualita've	
  
Quan'ta've	
  
Never	
  perfect	
   Specific	
  
Customizable	
  Dependent	
  
Emo'onal	
  
Informa'on	
  Secret	
  
Risky	
  
Instantaneous	
  
Grading	
  
Common	
  
Dynamic	
  
A	
  process	
  
Pricing	
  is	
  …	
  
Complex	
  
Powerful	
  
Important	
  
Fun	
  
Psychological	
  
Qualita've	
  
Quan'ta've	
  
Never	
  perfect	
   Specific	
  
Customizable	
  Dependent	
  
Emo'onal	
  
Informa'on	
  Secret	
  
Risky	
  
Instantaneous	
  
Grading	
  
Common	
  
Dynamic	
  
A	
  process	
  
Pricing Captures Value
Key Takeaway #1
Know your Value –
Charge what your customers are
Willing To Pay
Will	
  I?	
  
Which	
  one?	
  
Value	
  
Will	
  I?	
  
Will	
  I?	
  
Customers making the “Will I?”
decision are not price sensitive
Which	
  One?	
  
Price has a powerful impact when
customers choose “Which one?”
Differen'a'on	
  
Value is Differentiation
Percep'ons	
  
VALUE	
  IS	
  PERCEIVED	
  DIFFERENTIATION	
  
	
  
Create	
  it	
  
Find	
  it	
  
Communicate	
  it	
  
Key Takeaway #1
Know your Value –
Charge what your customers are
Willing To Pay
Different	
  
willingness	
  	
  
to	
  pay	
  
Segmenta'on	
  
Is it fair?
Key Takeaway #2
Segment Your Pricing –
Charge more to customers who are
willing to pay more.
Characteristics
Transaction info
Behaviors
Products
How?
Customer
Characteristics
Segmenta'on	
  
Customer
Characteristics
Transaction info
Segmenta'on	
  
Customer
Characteristics
Transaction info
Product
Segmenta'on	
  
Behaviors
Products
Key Takeaway #2
Segment Your Pricing –
Charge more to customers who are
willing to pay more.
Por`olio	
  
Versions	
  
	
  
Complements	
  
Anchoring
Will	
  I?	
  
Which	
  one?	
  
Complements	
  
Complements?	
  
510	
  Acres	
  
25,000	
  Acres	
  
Por`olio	
  
Google	
  -­‐	
  $1.70	
  per	
  Android	
  device	
  
	
  
Apple	
  -­‐	
  $576.30	
  per	
  iOS	
  device	
  
Source:	
  CNN	
  Money	
  –	
  Asymco:	
  Google	
  makes	
  
only	
  $1.70	
  a	
  year	
  per	
  Android	
  device	
  
Gefng	
  Paid	
  for	
  Free	
  
•  Free	
  samples	
  
•  Free	
  trials	
  
•  Free	
  informa'on	
  (like	
  now)	
  
•  Pay	
  as	
  you	
  wish	
  
•  Free	
  network	
  membership	
  
•  Ad	
  supported	
  (sponsors)	
  
•  Freemium	
  
Key Takeaway #3
Build a Product Portfolio!
Versions
Complements
Key	
  Takeaways	
  
1.  Know	
  your	
  value	
  –	
  Charge	
  for	
  it	
  
2.  Segment	
  your	
  pricing	
  
3.  Build	
  a	
  product	
  por`olio	
  
www.Pragma'cPricing.com	
  
ms@MarkS'ving.com	
  

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