Price is one of the most effective driver (and destroyer) of enterprise value. Still, many corporations don’t spend much bandwidth understanding the full potential of #SmartPricing.
Former Ministry of Industry and SEAT, S.A. board member Josep Pique opened the session with his vision on current business models reshaping under #globalization and #digitalization. According to Mr. Piqué, corporations die because of lack of cash flow but revenue management is key.
I’m summarizing my key learnings below:
- Although global #R&D expenditure is higher than ever, 72% of new products being launched miss their profit target à pricing should be engineered from the very beginning.
- Products include quite often costly and useless features, they are priced too low or they pretend to answer questions that were never asked by any consumer.
- Creating a smart monetization process is fair simple, deploying it is a different story.
- It’s key to understand the role a product has to play in the portfolio before pricing it.
- Poor pricing perception at the beginning of the sales funnel destroys potential conversion afterwards.
- Behavioral pricing shouldn’t substitute robust pricing models but is a very powerful boost.
- #BigData has come to support much more informed and segmented pricing decisions.
- Data should be transformed into a smart asset to create enterprise value.