Monetizing Innovation Quotes

“Companies with strong product-driven or engineering cultures tend to be the ones that develop feature shocks. Firms with a culture of playing it safe and avoiding big risks typically suffer minivations. Hidden gems most often afflict companies that coddle the core business. And undeads are born in firms whose top-down cultures discourage feedback and criticism from below. Let”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“When most people hear the word “price,” they think of a number. That's a price point. When we use the term price, we are trying to get at something more fundamental. We want to understand the perceived value that the innovation holds for the customer.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Starting with the customer, market, and price is the only approach for product success.” —”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“As one of the pioneers of dynamic pricing, American Airlines' former CEO Robert Crandall, eloquently put it, “If I have 2,000 customers on a given route and 400 different prices, I am obviously short 1,600 prices.”7”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“To maximize the monetization potential of new products, companies should curb their instincts to please customers by giving away value-added functionality—unless those customers will pay for it. These firms must get comfortable with the idea of giving their low-price segment only basic quality and service levels, rather than giving them everything. In other words, product configuration requires the guts to take away features.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“now you should understand why it's essential to discuss your new product concept with customers, and ask what they'd pay for it, early in your development process. But if you are like most of our clients, you are a little nervous about discussing pricing with customers before you have a product. How does one do that? The simplest way is to ask direct questions about the value of your product and its features, for example: “What do you think could be an acceptable price?” “What do you think would be an expensive price?” “What do you think would be a prohibitively expensive price?” “Would you buy this product at $XYZ?” Then follow each question with the most powerful question of all: “Why?” What your customers will tell you will be worth its weight in gold.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“We've found recurring patterns in new product monetization failure. While you might think many types of flaws can cause products to flop in the marketplace, we actually have found that monetizing failures fall into only four categories: Feature shock: cramming too many features into one product—sometimes even unwanted features—creates a product that does not fully resonate with customers and is often overpriced. Minivation: an innovation that, despite being the right product for the right market, is priced too low to achieve its full revenue potential. Hidden gem: a potential blockbuster product that is never properly brought to market, generally because it falls outside of the core business. Undead: an innovation that customers don't want but has nevertheless been brought to market, either because it was the wrong answer to the right question, or an answer to a question no one was asking.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“The simplest way is to ask direct questions about the value of your product and its features, for example: “What do you think could be an acceptable price?” “What do you think would be an expensive price?” “What do you think would be a prohibitively expensive price?” “Would you buy this product at $XYZ?” Then follow each question with the most powerful question of all: “Why?”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Internal refinement: A cross-functional group of internal experts comes together to refine and pressure test the hypotheses. These discussions bring together teams like marketing, sales, pricing, and product design. Initial customer validation: The team then starts validating product-market fit, perceived value, and WTP with target markets. Methods used include value trade-offs, ideal package (i.e. product configuration) creation, unaided WTP, and purchase probability (as outlined in Chapter 4). This typically occurs prior to writing any code. The gut-check: The concept must then pass an internal “smell test.” The team typically pitches the product concept to LinkedIn”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“More specifically the typical process steps are as follows: Hypothesis development: Innovation teams start with identifying the white space. They ask questions like “Where can we create and deliver differentiated value?” and “Which markets are underserved?”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Price Wars: The Only Winning Move Is Not to Play Price wars are about seeing who can lower prices the most. You don't want to start one, and you don't want to be the first one to move. Ultimately, a price war has only one winner: the supplier with the lowest cost. Most likely, that's not you.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“By the way, be prepared to learn that your price might not be high enough. The number of escalated deals is an important KPI here. Having too few escalated deals could indicate the sales team is finding it too easy to sell. You need to ask yourself whether you priced your product high enough.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“If you are losing a high percentage of deals or your sales greatly and consistently deviate from your target plan, or if the sales force complains that price is the only reason they're losing deals, you could have a sales training problem. Or you may have to revisit your pricing guidance.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“If your customers perceive your discount as signaling a lack of confidence in your product's value, they may not want to buy it at any price.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“But even if you have a quality problem, a price cut won't fix it. In fact, it could make matters worse for you.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“But reducing your price so soon sends an unintended message: that your new offering has less value than you initially communicated.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“It sounds easy, but consider this: You have thought about your innovation for months or even years. You know the product inside and out. However, a salesperson may only have 10 minutes with the customer. Your customer might stay on your website only for five minutes. An advertisement may only run for 15 seconds. That marketing message, that sales pitch, and that ad must clearly articulate the value to customers in a very short period of time. If they don't, the would-be customer tunes out.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Peter Drucker once said: “Customers don't buy products. They buy the benefits that these products and their suppliers offer to them.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“These firms must get comfortable with the idea of giving their low-price segment only basic quality and service levels, rather than giving them everything. In other words, product configuration requires the guts to take away features.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Understanding if customers are willing to pay for your invention, before you commit too many resources to building and launching it, will dramatically increase your likelihood of success.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Perfection” as defined by Fiat Chrysler, not the customer.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Porsche succeeded by designing the product around the price. This is what smart companies do.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Have the “willingness to pay” talk with customers early in the product development process. If you don't do it early, you won't be able to prioritize the product features you develop, and you won't know whether you're building something customers will pay for until it's in the marketplace. Don't force a one-size-fits-all solution. Whether you like it or not, your customers are different, so customer segmentation is crucial. But segmentation based on demographics—the primary way companies group their customers—is misleading. You should build segments based on differences in your customers' willingness to pay for your new product. Product configuration and bundling is more science than art. You need to build them carefully and match them with your most meaningful segments. Choose the right pricing and revenue models, because how you charge is often more important than how much you charge. Develop your pricing strategy. Create a plan that looks a few steps ahead, allowing you to maximize gains in the short and long term. Draft your business case using customer willingness-to-pay data, and establish links between price, value, volume, and cost. Without this, your business case will tell you only what you want to hear, which may be far afield from market realities. Communicate the value of your offering clearly and compellingly; otherwise you will not get customers to pay full measure. Understand your customers' irrational sides, because whether you sell to other businesses or to consumers, your customers are people. You should take into account their full psyches, including their emotions, in making purchase decisions. Maintain your pricing integrity. Control discounting tightly. If demand for your new product is below expectations, only use price cuts as a last resort, after all other measures have been exhausted. We”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Market and price, then design, then build. In other words, design the product around the price. Think”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“The key is to rigorously determine the market for a new product long before the products are built, and making sure the market is willing to pay for that product before embarking on a long journey of productizing the innovation.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“extensive set of surveys with potential customers,”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“price is both an indication of what customers value and a measure of how much they are willing to pay for that value. Porsche”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Don't force a one-size-fits-all solution. Whether you like it or not, your customers are different, so customer segmentation is crucial. But segmentation based on demographics—the primary way companies group their customers—is misleading. You should build segments based on differences in your customers' willingness to pay for your new product.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price

“Feature shock: cramming too many features into one product—sometimes even unwanted features—creates a product that does not fully resonate with customers and is often overpriced.”
― Madhavan Ramanujam, Monetizing Innovation: How Smart Companies Design the Product Around the Price