Tag Archives: strategy

13 Questions to Ask about the Pricing of Your Software Product

From time to time, product managers should ask themselves questions about the pricing of their product. The best sort of situation would be that the company can raise prices, decrease discounts, and charge for new features without a consequence. If you have that scenario, then congratulations! Otherwise, ask yourself these questions every few months to see if you can make changes to improve the pricing strategy of your product.

Are there still features to add that will increase value or is product innovation becoming less meaningful? Some companies are looking really hard for that magic feature that will change the industry, but sometimes the features that could be added are less meaningful than the company hopes. Sometimes there is simply no magic feature, and the company would benefit more from architectural improvements, operational efficiencies, bug fixing, etc.

For future features, are there any that customers will pay a premium price on? For any future innovation, companies should ask whether this could be a pay feature or product. Venture capitalist-owned firms especially like whitespace.

What would our competitors do if we raised prices? Look at competitors one-by-one and assess. Maybe we don’t understand our competitors at this level. If we don’t, how could we understand them better?

What would our competitors do if we lowered our prices? Would they follow our lead or stay where they are at?

What would our partners and distributors do if we changed our prices? Would we hurt our third party relationships with a pricing change?

What if we ran fewer/smaller promotions? Discount and promotional pricing are not things that high quality brands usually want to do. Can we get out of that habit?

What would we do if one of our competitors raised its prices? Is our pricing strategy based simply upon the competitors’ prices or would their price increase temporarily allow us to gain market share?

What would we do if one of our competitors lowered its prices? Would we have to follow? Could we spin it in our favor?

If we announced a pricing change, would we want to do it well in advance or with little notice? There is a strategy of announcing a price increase with enough time that we can observe its consequences and back out, if necessary. There is also a strategy of allowing little time for competitors to react, so that we can pick up market share on them.

Is the pricing strategy in line with other products in the portfolio? Is there a special policy just for this one product? How will customers take that? Might they see that this product is becoming more innovative because of the price increase or that it is in maintenance mode due to a discount?

Would a pricing change affect other products in the portfolio? Any new pricing should have significant analysis on how the change affects the portfolio.

Is bundling of products and services making it too difficult to change prices of an individual product? Can we raise the price of fries without affecting the price of the Happy Meal?

Do our internal folks understand our pricing? In some companies, pricing is by committee. In some, it is done by asking one person. Is there ownership of pricing by someone? What is the sales/marketing process for getting pricing information?

 

For more information on product management, read the Product Guy Daily. I publish it every morning.

12 Signs that the Product You’re Hearing about is Vaporware

No one wants to announce vaporware. It’s an act of desperation, probably stemming from poor long-range planning. It happens in all industries, and even occasionally in politics. When a company rep is telling you about a product that is coming in the next year, it’s a good idea to be skeptical. It may never come out, or the date may slide. The motive might be for you to wait for that product or feature, instead of moving to a competitor’s product like a lot of other folks. During an industry event, you might be surprised at how much vaporware is being announced. Here are some signs that a product is vaporware:

  1. The details of the product have changed. You first heard it was a product that integrated with Product B, and now it integrates with Product C. Or the name of the product has changed. Red flags!
  2. The scope of the product has decreased over time. The first time you heard about it, the product did A, B, and C. Now you’re hearing it does A, D, and E.
  3. Buzzwords. Cloud computing, virtualization, business intelligence, big data, data mining, de-dupe, and 4G/5G. There is no bigger buzzword in the software industry than “the Cloud.” Ask Paul Christman what he thinks about buzzwords.
  4. The company is losing customers left and right to existing products that compete with this product. The company is desperate to keep you from leaving them, too. If you were the company, wouldn’t you make promises to keep the customer?
  5. “We’ll change your industry with this product.” Don’t believe it until this announcement: “Today we change your industry with this product.”
  6. The way the company representative demoed the product to you was through a PowerPoint or PDF. No live demo? Why wasn’t it possible?
  7. There’s a surprising amount of leeway on price. Is this product being discounted significantly on a pre-order?
  8. They say that you can pre-order, yet none of the solutions they’re pitching to you today are available today. Hmm…are you an easy mark for this company?
  9. The company hasn’t produced a new product in a long time. The point here is not about company size…it’s about how companies that don’t release new products a lot forget how. Releasing a new product is HARD.
  10. There are press releases dating back more than a year. Is it normal for a company in your industry to announce things more than a year before they are released? For most industries, the answer is no.
  11. All the information you find on the product is word-for-word from press releases. Either the press releases are really, really good (like the ones from SalesForce) or the press in your industry is not being skeptical. Google is your friend to find this.
  12. The press/bloggers in your industry rarely call companies on their BS. Who is the watchdog who would tell you that this product is never going to be delivered? Are they really out there doing that or are they a puppet for the company, copying their press releases word-for-word?

Maybe YOU should be your industry’s watchdog! Go to industry events and make a note of products that you’re told are coming in the next year. A year later, publish/blog a list of the ones that have and haven’t arrived.

Don’t let the companies in your industry get away with being all hat and no cattle…

How to Promote Your Product with an Exclusive Twitter Handle

Hierarchy

Have the company Twitter account retweet the product handle’s most important tweets. Your company has a Twitter account, and the company has several major products. A great setup is to have the company Twitter handle retweet from the product Twitter handles. It definitely puts less pressure on the person tweeting the company handle. The assigned product manager is a natural for overseeing the product Twitter handle. See what Nike does:

For your product Twitter handle, get a spiffy background with the product logo. Do some product marketing. Hopefully, you have a graphic designer to help with this.

Communication

Have a pathway for followers to get customer service & sales info without tweeting. Getting customer support problems sent to your handle is not ideal. You’ll want to have a place to redirect them; maybe a webpage form. Some companies have Twitter handles that specifically deal with customer support problems. A product Twitter handle probably shouldn’t be filled with tweets that say you’re sorry about a problem a customer in Omaha is having.

Have live Twitter chat events. Have an event that lasts one hour, and allow customers to ask anything. You’ll want to have a couple people do the tweeting, just in case the questions get too hard or too numerous. If your product is international, try to vary the times for the chat events.

Live-tweet during trade shows & industry events. This will give your product handle maximum exposure.

Exclusive to social media

Make exclusive offers. Potentially boosting revenue is the way you justify this to your company, but this also gives your followers the idea that they are getting a super-secret deal. You’re making the customer feel like an insider. The offer doesn’t have to be a fire sale; it can be the same basic deal you’re offering everyone. Call it exclusive and you’ll be surprised who responds.

Promote the blog on Twitter & have the blog promote the Twitter handle. Having trouble coming up with the next blog post? Do one on the new Twitter page.

Promote Facebook on Twitter & have Facebook promote the Twitter handle. Your company may be stronger on Facebook than Twitter, so try to pollinate one account with the other.

Following & interacting

Follow your customers & potential customers. This can take a while to compile. You’re trying to build engagement, so this is a really good strategy.

Don’t follow your competitors. This is a bush league move. Follow your competitors on another account that isn’t the face of your brand.

Follow & interact with customers of the competitors. This can be fun. Just look at your competitors’ followers and follow them.

Follow & interact with the press & bloggers. A great way to stay in the minds of these folks is to build a Twitter relationship. Amp up your activity with them around industry events. Leading to my last point…

Follow & interact with trade shows & industry organizations. Get an early start with trade show Twitter handles, and stay active with the industry organizations.

 

For more information on product management, product marketing, social media, etc., read the Product Guy Daily. I publish it every morning. Do you have other tips and tricks? Leave a comment!