Profit Streams™ Pricing & Packaging Design
What is Pricing & Packaging Design?
Pricing & packaging design is a cornerstone of Profit Stream Design, guiding strategic decisions across key areas. By addressing two fundamental questions:
- What is the optimal collection of features for each customer segment?
- What is the price a customer is willing to pay to achieve the promised value to maximize profit?
Pricing & packaging decisions directly influence positioning, licensing models, ROI calculations, and the prioritization of product development initiatives.
Agile methods are great at adding Features to solutions. Although, it can often leads to a proliferation of features, which can sometimes complicate the sales process. Customers may struggle to understand the value proposition of a solution with numerous features. By carefully packaging solutions to match specific customer needs, businesses can streamline the sales process and improve customer satisfaction
Pricing and packaging design have a positive impact on the entire organization—everyone can see how their work helps customers succeed!
In new solution development, pricing and packaging is used to:
- Ensure the early adopter segment has the features they need to accomplish their goals.
- Limit the creation of unnecessary features until customers have validated the first release.
- Acquire data that will be used in future pricing design choices, such as the creation of fences.
After the solution is launched, pricing and packaging help organizations:
- Prioritize new features and feature enhancements.
- Introduce new packaging and new price fences that accelerate sales and increase profits.
How does Pricing and Packaging Design work?
Our pricing and packaging engagements follow a proven six-step process:
Understand triggers: We'll help you understand the triggers that indicate packaging and pricing need to be adjusted.
Snapshot: We'll create a snapshot of all relevant pricing, ROI, and related artifacts. This helps ensure you assess all necessary artifacts in the packaging change.
Gather data: We'll gather data that will inform the new packaging, such as feedback from sales and support teams calibrated with solution usage data.
Design new packaging and pricing: We will help you explore the impact of specific packaging changes, assessing the impact of these changes on other aspects of your Profit Stream™, including economic modeling.
Develop an implementation plan: Your implementation plan defines how you will execute your packaging changes. The best implementation plans are based on using your snapshot as a checklist to ensure you're
including key steps.
Implementation: We'll support you and your team as you implement your pricing and packaging changes.
By following our exclusive six-step process, you can be confident that your pricing and packaging choices result in a more sustainably profitable solution.
We understand that every business has its own unique needs. While some organizations may find success with ready-made solutions, others require a tailored approach to thrive. We have the expertise to design a customized engagement that caters to your unique context. No matter what you need, we will create a solution that works best for you.
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Where can I learn more?
Discover how to increase profits at any stage of your solution's lifecycle with Profit Stream Design, a key concept explored in the Amazon bestselling book Software Profit Streams: A Guide to Designing a Sustainably Profitable Business by Jason Tanner and Luke Hohmann. Learn more about the Profit Stream Canvas and how Solution Profitability Management can benefit your business.