The Vancouver Value Innovation and Pricing Meetup will have its first session on Thursday January 17, 2019. Please join us at VentureLabs, 1200-555 West Hastings (Harbour Centre, the building with the funny revolving restaurant on top).
The theme for our first event will be Value and Pricing Along the Customer Journey. We will discuss how to layer value communication, value delivery and value capture (pricing and monetization) into a customer journey map.
Why this theme? Too often value and pricing are considered independently of the customer experience. Pricing is often an afterthought, based on a quick look at competitors or based on an estimate of costs. One needs to consider the competitive alternatives when pricing, pricing is always relative to an alternative, and costs are always a consideration, but the best practice is to put pricing in the context of how value is communicated and delivered to the customer. It is the customer’s experience and economics that should drive pricing design.
When setting prices, and thinking about customer lifetime value, the place to begin is V2C, the value that will be delivered to a customer over its lifetime. The V2C had better be larger than the LTV, V2C > LTV, if the business is to be sustainable!
Value is seldom delivered all at once. The customer realizes value over time. One of the best ways to understand this is to map value and price onto the customer journey map. Customer journey maps have been popularized by the service design movement, and are one of the best ways to understand how the customer experience evolves over time. One can turn them into an important tool for understanding value and pricing by layering in a few more swim lanes:
Value Communication - How is value communicated across each touch point in the customer journey?
Value Resonance - When are people receptive to these value messages?
Value Delivery - How and when is the promised value being delivered?
Value Capture - How is the vendor capturing its fair share of the value created? (This is a combination of pricing and revenue model.)
We have written more on these themes in the following posts.
Ibbaka is obsessed with the connection between value creation, innovation and pricing. We are currently running a survey on this and it would be great if you could participate. We plan to share the results in January.