SEVEN DIMENSIONS OF MONETIZATION
Pricing & Packaging
This dimension focuses on the processes that support sales in generating the revenue that keeps the company growing and increasing customer loyalty. It starts with determining the appropriate pricing strategy and building product or service packages that align with customer needs and maximizes value for the customer and for the business.
What is Your Company's Maturity Level?
Ad-hoc
All manual processes: external pricing sheets, in-person approvals, manual JE's into low-end ERP. No system integration. Scale by adding headcount.
Structured
Spreadsheet processing with upload/download to ERP. Some system reporting that require manual intervention. Heavy reliance on IT to deliver new pricing models.
Coordinated
Automated system(s) to handle advanced pricing. Easier to launch new models; less IT involvement. Integration with ERP and CPQ
Optimized
Smart, automated system to streamline processes and increase productivity and agility of sales team. Quick and easy launch of new pricing models. Advanced reporting and analytics.
Pricing and packaging includes the following steps (with others as needed):
Deal configuration and compatibility, ensuring the products or services are configured appropriately based on customer requirements and are compatible with what the company is able to offer.
Developing pricing/packaging models includes determining the right price points, bundling options and value-added features to meet customer needs while aligning with the business’s financial objectives.
Generation of timely and accurate quotes helps to streamline the sales process and provide customers with clear pricing information, shortening the sales cycle, enhancing transparency and facilitating faster decision-making.
Identifying upsell and cross-sell opportunities in order to offer additional products, services or upgrades to existing customers, increasing customer LTV, fostering loyalty and driving revenue growth.
Developing a well-defined go-to-market (GTM) strategy ensures efficient product launches and market penetration. It involves market research, positioning, marketing campaigns and identification of effective distribution channels. Time-to-value refers to the speed and effectiveness with which customers can derive value from their purchase.
Establishing clear and favorable contract pricing terms is important for ensuring transparency, managing customer expectations and avoiding disputes. It helps in defining the terms of the engagement, pricing structures and any applicable discounts or incentives.
Transitioning customers from the sales process to the implementation and delivery of services through efficient service onboarding, ensuring customers quickly and effectively start using the product or service, leading to higher satisfaction and faster time to value.
Periodically adjusting prices to account for inflation or other changes in market conditions through CPI uplift, ensuring prices remain competitive and aligned with the cost of delivering products and services over time.
Key Takeaways
Pricing and packaging strategies impact revenue, customer perception, segmentation, predictability, upselling, customer retention, market expansion, feedback loops, and investor confidence. By getting these strategies right, a company can establish a strong market presence and achieve sustainable growth.