In today's intensely competitive market, new product innovation is no longer enough. Too often new products fail because they don't deliver tangible financial value to customers or because sales is not equipped to communicate that value. It's all about aligning everyone in your organization on how to create value for your customers and get paid for the value you deliver. Join Mark Burton and Ellen Quackenbush as they share insights on how to add value principles and "pricing thinking" into your existing product development and launch processes to drive market adoption and ensure profitable growth for your new product portfolio. About The Speakers: Mark Burton, Co-founder and VP, Consulting, Holden Advisors Mark is responsible for ensuring successful client outcomes at Holden Advisors. He is the driving force in the firm's efforts in developing offering, pricing, and sales strategies for Fortune 1000 B2B companies. In this capacity he has developed new product offering and pricing solutions for firms in industries such as IT outsourcing, semiconductor, financial and business services, and enterprise software and maintenance. Ellen Quackenbush, Specialist, Customer Value Research, Holden Advisors Ellen is responsible for defining and executing customer value research at Holden Advisors. She guides projects on how to define product and services solutions to deliver differentiated customer value, set prices to capture that value, and empower sales to communicate that value and defend price, even in difficult customer negotiations. Upcoming Events Reserve your seat for the next AIPMM webinar. Visit: http://aipmm.com/aipmm_webinars/. Want To Certify Your Team? If you have a product team of 10 or more that you want to certify, contact us at certification@aipmm.com. About AIPMM The AIPMM is the hub of all things product management. It is where product professionals go for answers. With members in nearly 70 countries, it is the worldwide certifying body of product team professionals. It is the world's largest professional organization of product managers, brand managers, product marketing managers and other product team professionals who are responsible for guiding their organizations, or clients, through a constantly changing business landscape. AIPMM's certification programs are internationally recognized because they allow product professionals to demonstrate their expertise and provide corporate members an assurance that their product management and marketing teams are operating at a high competency level. Visit http://www.aipmm.com. Call For Speakers: http://bit.ly/1b006vm Subscribe: http://www.aipmm.com/subscribe LinkedIn: http://www.linkedin.com/company/aipmm Membership: http://www.aipmm.com/join.php Certification: http://aipmm.com/html/certification Articles: http://www.aipmm.com/html/newsletter/article.ph

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AIPMM Certifications
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• Certified Product Manager (CPM®)
• Certified Product Marketing Manager
(CPMM®)
• Agile Certified Product Manager (ACPM®)
• Certified Innovation Leader (CIL®)
• Certified Brand Manager (CBM®)

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“Pricing with Confidence: 10 Ways to Stop
Leaving Money on the Table.”
Participate and Win!

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Today’s Speakers
Moderator:
Hector Del Castillo, CPM, CPMM
Presenters:
Mark Burton
Vice President, Co-Founder
617-285-2963
mburton@holdenadvisors.com
Ellen Quackenbush
Customer Value Specialist
978-405-0020 x1033
equackenbush@holdenadvisors.com
Holden Advisors
www.holdenadvisors.com

7. Innovate for Growth, Price for Profit

8. © 2014 Holden Advisors Corp., Concord, MA
Innovation is the essential growth engine
The most innovative
companies have high
sales growth and receive
a premium on expected
earnings.
8
23%
52%
12-month sales growth Stock Innovation Premium
Top 20 Most Innovative Firms
Source: Forbes Magazine, Aug 2013

9. © 2014 Holden Advisors Corp., Concord, MA
Innovating is one thing…getting paid is another
9
Even when companies
do innovate, by the
time they worry about
pricing, there
isn’t enough time or
information to price
effectively!

10. © 2014 Holden Advisors Corp., Concord, MA
…And new offerings underperform
10
• Limited market adoption
• Low ASP at launch
• Reliance on discounting to
close deals
• Missed revenue targets
• Low ROI on product
development costs

11. © 2014 Holden Advisors Corp., Concord, MA
POLL #1: How many of these innovation issues
are you experiencing?
a. Limited market adoption
b. Lower than expected prices at launch
c. Missed revenue targets
d. Low ROI on product development costs
e. None…we are hitting on all innovation
cylinders
11

12. © 2014 Holden Advisors Corp., Concord, MA
What are the impacts of getting it wrong?
12
• Underpriced, or overpriced,
products and services
• Features too few customers
care about
• Limited differentiation versus
competition
• Limited adoption in the market
• Lack of tools puts salespeople
in the stone age of selling

13. © 2014 Holden Advisors Corp., Concord, MA
To pricing and positioning right, integrate a value-
based approach and ask the right questions
13
• What is a customer’s
willingness to pay?
• At what price can we
drive market share?
• How do we price to cover
our costs?
• What is the competitive
price?
The Wrong Questions The Right Questions
• How much financial value
can we drive for the
customer?
• What are the competitive
alternatives?
• Given the value we drive,
how much can we afford
in costs?
• Given our business
objectives, how can we
best bring this product to
market?

14. © 2014 Holden Advisors Corp., Concord, MA
POLL #2 : How does your organization set
new product pricing?
a. Based on product costs and a target margin
b. To recover development costs
c. Based on the price of competitive products
d. Based on an estimate of customer value
e. I am not really sure how prices are set
14

15. © 2014 Holden Advisors Corp., Concord, MA
Pricing and value focus must be integrated
with the NPD process
15
1 Source: © 1998-2014, AIPMM, All Rights Reserved
1
By embedding customer value principals early in the
product development process, firms:
• Drive development efficiency
• Hit the market window
• Target early adopters for early wins
• Create high-impact sales messaging
• Develop confidence in pricing

16. © 2014 Holden Advisors Corp., Concord, MA
The best tool for setting initial price levels?
Case ROISM
: An Innovator’s Research Tool
• Measures an innovation’s financial value
– Actual dollar value
– Calculated in comparison to an alternative
solution(s)
• Surfaces value using an exploratory technique
– For new products/technologies
– When part of a larger, more complex system
• Enables building of sales tools to communicate value
16

17. © 2014 Holden Advisors Corp., Concord, MA
Case study: Valuing an innovative medical
imaging solution
• 45 interviews across 4
segments
• With nothing but a spec
sheet of proposed
features
• Research led to a
reprioritization of key
features
• Based on hard
quantification of value
17
$0.18
$9.56
$2.11
$1.04
$3.62
$1.83
$5.67
$1.60
$11.08
Case ROI ($/case)
Product met all key launch targets and is now in its
second generation

18. © 2014 Holden Advisors Corp., Concord, MA
From the base analysis, value profiles and simple
tools are created
18
Inputs Savings Per Case
Facility Type Small Hosptial Physician Efficiency $ 3.50
No. of Cases 10,000 Staff Efficiency $ 1.75
Inefficiency of Current System 20% Operating Room Usage $ 6.10
Physician Time / Case (hrs) 0.5 Case Handling $ 1.40
% Cases from OR 15% Remote Sites $ 3.62
% Cases from Remote Sites 30% Total Savings $ 16.37
Current External Diagnostics 10% Revenue
Fee for External Diagnostics $ 142.00 External Diagnostics $ 1.83
Costs
Storage Costs $ 4.20
Equipment costs $ 5.80
Net Financial
Benefit
$ 12.62
Equipment
Payback
5.4 Months
Value ProfileProspect Profile

19. © 2014 Holden Advisors Corp., Concord, MA
Next, the value profile is developed for each
value segment
19

20. © 2014 Holden Advisors Corp., Concord, MA
Planning for pricing begins early and continues
through the lifecycle
20
1 Source: © 1998-2014, AIPMM, All Rights Reserved
2 Source: Pricing with Confidence. Holden & Burton, 2008
2
• Customer
problem
definition
• Connect use
cases to
customer value
• Competitive
set/ alternative
solutions
• Customer value
quantification
• Initial price range
• Cost budget
• Value-based
customer
segmentation
• Offering structure
• Final pricing
• Sales tools
o Early
adopter
check list
o Messaging
• Post-launch value
management
• Flanker to combat
low-price entrant
• Re-differentiate
offering (new
features or
services)
1
2
• Beta test to
validate use
cases and
value drivers
• Low price in
exchange for
customer
use data

21. © 2014 Holden Advisors Corp., Concord, MA
POLL #3: How do you prepare sales to sell
new products?
a. White papers
b. Product spec sheets
c. Target customer/early adopter check lists
d. Sales tools to demonstrate value to each
customer segment
e. Just a price list
21

22. © 2014 Holden Advisors Corp., Concord, MA 22
Value management does not end at launch
Emerging High Growth Mature Decline
Profit
Time
Segment and
Re-differentiate
Leverage drivers of
adoption for early wins
Introduce flanker to
deflect low-priced
entrant
Harvest value from loyal,
Price-insensitive
customers

23. © 2014 Holden Advisors Corp., Concord, MA 23
Case Study: Supplier of bulk materials for
the construction industry
The Situation
• Company suffered significant price volatility
as a result of changes in supply-demand
situation and had difficulty consistently
returning its cost of capital
The Task
• Through researching value creation
opportunities with customers, the value of
key products was uncovered and new
services to increase customer productivity
were introduced. This enabled the firm to
increase prices to target customer segments.
The Result
• The firm was able to increase average selling
prices by over 10% over a 4 year time
period, even as overall industry demand
dropped by 6%

24. © 2014 Holden Advisors Corp., Concord, MA 24
Simple questions formed the basis for
identifying key opportunities
Customer Supplier
I really
need faster
truck loading
Reduce hourly
operating
costs
How much?
$90 per hour
How many
tons per truck?
16
We can save 30
minutes=
$45 or
$2.81 per ton
Why?

25. © 2014 Holden Advisors Corp., Concord, MA
Three critical actions to begin your value-
based journey
25
• Pick a product
– A new innovation or an existing product in need of a
refresh
• Build a cross-functional team to assess
customer value
– Involve the customer early on
• Pilot with sales to assure value capture, even
in tough negotiations

26. © AIPMM 2014 www.aipmm.com
Q & A
Moderator:
Hector Del Castillo, CPM, CPMM
Presenters:
Mark Burton
Vice President, Co-Founder
617-285-2963
mburton@holdenadvisors.com
Ellen Quackenbush
Customer Value Specialist
978-405-0020 x1033
equackenbush@holdenadvisors.com
Holden Advisors
www.holdenadvisors.com

27. © AIPMM 2014 www.aipmm.com
Athens, Greece
Belgrade, Serbia
Athens, Greece
Follow the links above for more information, or contact:
certification@aipmm.com.
Upcoming Courses

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Belgrade, Serbia
Upcoming Courses
Follow the links above for more information, or contact:
certification@aipmm.com.

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Upcoming Courses
Course & Location Dates Days Time
CPM® Certification Prep Course & Exam
Seattle, WA
McLean, VA
May 5-6, 2014
June 9-10, 2014
M, T 8:30 am – 5 pm
CPMM® Certification Prep Course & Exam
Seattle, WA
McLean, VA
May 7-8, 2014
June 11-12, 2014
W, Th 8:30 am – 5 pm
ACPM® Certification Prep Course & Exam
Seattle, WA
McLean, VA
May 9, 2014
June 13, 2014
F 8:30 am – 5 pm
For more information, visit:
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