Our recent research on how people price innovations found different pricing methods for sustaining versus disruptive innovators. Sustaining innovators tend to use value-based pricing. Disruptive innovators are more likely to price relative to the market alternative. We explore why this might be using the Clayton Christensen model of disruptive innovation.

What is value management? (And why you should care). A document from back in November 2012 that sets out the basic approach to value management, and how it integrates innovation, marketing, sales and of course pricing. A new version of this document is in development.

Predicting the outcomes of pricing changes is difficult. Many different forces interact. Ibbaka combines market segmentation with causal diagrams and Monte Carlo models to understand the range of possible outcomes of a pricing change and how to manage the risks of the change.

At Ibbaka, we begin our pricing work by understanding the value of your product or service from the perspective of your customer. Our approach is to research, validate and quantify the economic (monetary) and emotional value your offer creates for the market with customers and non-customers. By understanding your differentiation relative to the customer’s next best competitive alternative, we can design a pricing model built that communicates and even amplifies your differentiation.

The Ibbaka value proposition goes beyond our pricing strategy, analysis and design work. We also work to embed a deep understanding of pricing in our clients. We do this using the Performance Improvement Cycle. The result is our clients excel at implementing our advice and ask us better questions.

Pricing is often seen as a branch of the dismal science, a coldly analytical attempt to extract the maximum price from buyers. Good pricing practice is completely different from this stereotype. It factors in empathy and emotion and is deeply concerned about the value delivered to the customer (V2C).

Ibbaka is here to help you drive growth by getting focussing in on the market segments where you create the most value. We help you design pricing that reinforces your value and differentiation. The results is you can capture more value and keep the lifetime value of the customer (LTV) and value to the customer V2C) in balance.

What should should you be doing in 2019 to build and activate pricing as a driver of business growth? A combination of new capabilities, market research and decisive action is needed. The outcome can be greatly improved performance.

Looking back at pricing predictions for 2018 we see how good our crystal ball really was.

Reflecting on the importance of shifting our approach to understanding others from asking about their professions to exploring their values. Through various encounters during travels, discovering that focusing on what people value leads to more meaningful conversations. This introspection prompts us to rethink the screening process for potential investments, emphasizing the significance of motivation and values.

The Vancouver Value Innovation and Pricing Meetup will have its first meeting on Thursday January 17, from 6:00 PM, at VentureLabs. The theme is Value and Pricing Along the Customer Journey. Please join us for a vigorous discussion.

There is a strong link to innovation and value creation. To foster innovation, we need to embrace diversity. Linda Naiman shares her approach to unlocking creativity by leveraging a whole-brain model as well as a 10 step design thinking methodology for innovation.

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.

Primary research for B2B pricing requires a focus on how the offer creates value for different types of prospective customer and how the customers buy. It is important to combine surveys with interviews and to avoid confirmation bias. Direct questions about willingness to pay (WTP) give misleading results.

Customer lifetime value (LTV or CLV) is a critical metric for many companies in the subscription economy. But before your LTV comes V2C (Value to Customer). Understanding how you will create value to your customers over time should come before estimates of LTV and LTV and V2C need to be kept aligned.

Emotional and economic value drivers are both important in market segmentation and pricing design. This is especially true where goods like water is involved. WaterTrax (part of Aquatics Informatics) has been thoughtful and effective in designing its pricing.

Ibbaka is a value-based pricing company. To do value-based pricing, one has to ask who the value is being created for. This impacts everything from product and services deign, to pricing to communication and sales strategy. A holistic view of value and stakeholders can transform how one thinks about pricing.

Value-based pricing requires trust. Trust between buyer and seller and trust between the sales force, product and service development, marketing and leadership. Trust is based on consistency, transparency, fairness.

We interview Kevin Mitchell of the Professional Pricing Society to get insight into how they have been building a community of pricing professionals.