Meaningful innovation is a community effort. As a contribution to the Vancouver innovation community Ibbaka is sponsoring a new meetup on value innovation and pricing. We will meet about four times a year in Vancouver and may have meetups in Victoria and Kelowna as well.
Willingness to pay (WTP) is one of the most abused terms in pricing work. Lazy consultants use it as a proxy for value. It is not. Market researchers think of it as something to be measured. Pricing strategists look for ways to shape WTP through marketing segmentation, value communication and a pricing model that connects price to value.
Who should own pricing decisions? There are as many opinions on this as there are pricing experts. For good reason. The answer to this question depends on the company's goals and organizational structure, and on just where the product is in the lifecycle. Candidates for pricing governance leadership are the CFO, the head of sales or chief revenue officer, product marketing and product management. But for early-stage innovation, in the build up to launch and for the first few years on the market, I believe the answer is clear. The product manager should be responsible for pricing.
Ibbaka helps you execute on value-based pricing. This is a pricing strategy where your price is based on the differentiated value you provide to your customers. The alternatives to value-based pricing are cost-plus pricing (good for contracts where the deliverables are poorly defined and controlled by the client), transactional pricing (what happens with commodities), market following pricing (if you have little pricing power) and various forms of auctions (growing in importance as M2M pricing becomes more common).