Pricing Process: New Product

The following is an excerpt from our book, Pricing for Associations, available now on Amazon.

The following is our recommended process for pricing a new product at Pricing for Associations:

Step 1: Kick Off Meeting

To kickstart the pricing and value analysis project, we will hold an initial meeting with all the stakeholders. This meeting will be essential to set the foundation for the entire project.

Defining what success will look like at the end of the project is a critical aspect of the initial meeting. By having clear objectives and goals, we will ensure that everyone is aligned and working towards a common goal. We will also discuss timelines for each future step of the project to ensure that the project is completed within the specified timeframe.

One of the key factors that determine the success of the pricing and value analysis project is the data we review. During the initial meeting, we will identify the data that we will analyze. This data will include customer feedback, engagement metrics, and financial performance data. We will also establish survey and focus group goals for value analysis and pricing analysis to ensure we gather insights from our customers and stakeholders.

Finally, we will discuss the importance of timely communication throughout the project. The marketing team will be responsible for scheduling and sending email reminders for surveys and focus groups. We will also schedule future deadlines and meetings and plug them into our calendars to ensure that we stay on track and achieve our objectives. By holding an initial meeting, we will set the foundation for a successful pricing and value analysis project.

Step 2: Data Analysis

To ensure the success of a program, a departmental team will review both internal and external data through a SWOT analysis. This analysis will help identify internal strengths and weaknesses of the organization offering the program as well as external marketplace opportunities and threats. By examining both the internal and external factors, the team can gain a better understanding of the current situation and what can be done to improve the program's success.

Once the SWOT analysis is completed, the team can meet to discuss the differentiators and potential viability of the program. By discussing the program's strengths and weaknesses in the context of the external marketplace, the team can develop a clearer understanding of how to position the program in the market to better meet the needs of potential consumers. This information can then be used to make informed decisions about potential adjustments or enhancements to the program.

Step 3: Value Analysis

Value analysis is a crucial part of any product review, and the approach may vary depending on the product and audience type. Generally, member-facing initiatives require a survey followed by focus groups for specific segments, while sponsor-facing initiatives benefit from 1-1 interviews. This tailored approach ensures the data gathered is relevant and useful for making informed decisions on product value.

To ensure consistency and accuracy across all surveys, we have provided templates for value analysis surveys and focus groups. Surveys should include essential information such as name, email, and the possibility of follow-up for cross-populating relevant data back into our systems, like demographic answers into our AMS. Focus groups should be scheduled by segment type to better focus on their answers and thoughts on the value we deliver and the necessary adjustments needed.

In addition, 1-1 calls should concentrate on identifying where we are delivering the most value and where we can improve, with requests for feedback and suggestions.

A significant difference between a value analysis for a new product and an existing one is the need for a prototype or demo in the former case, even if it is in the form of a video. This is essential to ensure that the target audience understands the product's potential before its launch and can express the value they expect or want to receive from the organization. Without a prototype or demo, it may be challenging for the audience to comprehend the product's concept and the value it brings, leading to inaccurate or incomplete feedback during the analysis. Therefore, a prototype or demo is a crucial component of a value analysis for a new product.

It is essential to note that marketing should be ready to deploy emails for surveys and focus group invitations to avoid any delays in this work.

Once we complete this phase, we will hold a meeting to discuss the results and potential value adjustments we will commit to. This meeting will provide an opportunity to ensure all stakeholders are aligned and understand the next steps to take.

Step 4: Pricing Analysis

To complete the pricing analysis phase, a final round of surveys will be conducted using the templates provided below. This round may include open, closed, or both types of surveys, depending on the department head's discretion and approval timeline constraints. It is recommended to conduct both types of surveys for best practices. The survey templates will aid in gathering feedback on pricing strategies from various perspectives. After the surveys are completed, the data collected will be analyzed to identify trends, insights, and areas for improvement. The results of this analysis will be presented to stakeholders to determine any necessary adjustments to the organization's pricing strategy.

Step 5: Final Recommendations

The Annual Product Pricing and Value Review will incorporate all the data gathered in the previous work, and the aforementioned considerations will be taken into account while conducting the review. Pricing recommendations will be suggested based on the analysis, including bundling opportunities and value adds. The value propositions will also be evaluated and adjusted if necessary. Marketing funnel recommendations will be made to improve the customer experience and increase conversion rates.

Finally, an annual plan will be developed to ensure continual customer feedback, analysis, and adjustments to pricing and value propositions. This plan will help the organization stay on track and maintain an ongoing process for product pricing and value analysis. The Annual Product Pricing and Value Review will be an essential tool for the organization to stay competitive and provide the best possible value to its customers.