Once our clients are through the branding and product management processes, we move onto pricing. The question is always: how I position my company for the maximum value. Or rather, how do I charge the most amount of money without losing clients and customers. Or, I made a thing now how do I price it?
To start thinking about this is, imagine you want to buy a bottle of water. You can go to the grocery store and buy a nice, cold bottle of water for 70 cents. There’s obviously a lot of competition at the store, and everything you can imagine in terms of alternatives, but 70 cents is the going rate, and it rarely fluctuates. However, if you go to a music festival, that same bottle of water costs $4. Why? It’s the exact same bottle of water.
Simply, there are fewer options at the music festival: you may have a choice between only 3 non-alcoholic beverages instead of 2 aisles worth of cheaper options. At a concert, there is more immediate demand for water. Dancing hard to Beyonce’s new single is thirsty work, and the convenience of paying a couple bucks to walk over and buy some water is worth more than leaving the show to grab something cheaper.
What we have here is an example of scarcity, demand and convenience.
This relates perfectly to B2B technology. Pricing and value go hand-in-hand with positioning.
So you have to ask yourself what value your product has and how do you should position it in a given market.
Most of our clients want marketing to talk directly to the CIO, and their services are positioned that persona in every industry. I feel bad for the CIO these days – they seem to be the primary target of every technical marketing and sales campaign. IT Directors, you have it bad too – because you manage a team and yes, you also have a budget. You can’t blame tech companies though – many of their solutions work in every industry. Everyone needs a data warehouse, SQL monitoring, DevOps, data quality, the list goes on.
This is where you lose. You’ve put your brilliant product right next to the no-name brand on the grocery store shelf and you’re now in a race to the bottom in terms of pricing. You’re managing feature lists, trying to get your “new and improved” labels out before your competitor. Worst, your marketing is now watered down because you’re trying to talk to everyone – or no one in particular – and your sales folks need to deeply discount to compete with either off-shore options or the products that say they do what yours does (but it never really works as well).
What if you instead focused your services and products on a different subset of the market? What if you positioned your data monitoring service to law firms or your ETL tool to procurement directors. Where would you be if you showed up at marketing conferences with a PowerBI workshop or sold SQL Server training at insurance tradeshows? Stand in a room full of people as the only show in town, connect in with a demand, match it to your service and set the price based on the exclusivity you bring.
Now you’re talking.
