I confess I love pricing. I like calling myself a pricing expert, teaching others about pricing (mostly because there are so many aha’s.) and the power and pervasiveness of pricing. But, I especially like that once you understand pricing, or more accurately value, it transforms the way you think about product development, marketing, and sales. It’s easy to see why I love pricing.
Here’s the problem. When I tell people we teach Subscription Pricing the typical response is, “I don’t do pricing.” Ouch. They so desperately need to know what we teach.
On the podcast with Laura Fay in July, she said: “product managers should really be called value managers.” – Wow, that resonated with me deeply. After thinking about it a lot, that’s absolutely true. But, product marketers and salespeople are value managers too. They create perceived value in the minds of the buyers. The key decisions each of these roles make should be based on a strong understanding of value.
What is value management?
Pricing is about capturing value. To do that well we need to communicate value. To do that well we need to create value. When I think of pricing I think of creating, communicating and capturing value. It is much much bigger than putting a number on an offer.
So, what is value management? It is all of the activities required to create, communicate, and capture value. It’s also a phrase that feels “bigger” than pricing, even though this is exactly what I think of when I think of pricing.
The Subscription Value Management course (recently renamed) teaches about pricing, sure, but it also teaches market segments, pricing metrics, and packaging and in particular how to use each of these to grow your subscription business. All of these are crucial to creating, communicating, and capturing value and all of these require a deep understanding of value.
Business, in its simplest form, is to get paid for providing value to the customer. Pricing? Value management? They feel pretty similar to me, but apparently not to most other people.
**NOTE: Mark will participate in the conversation about this post on LinkedIn which you can get to here.