A Checklist for Introducing New Pricing
Steven Forth is a Managing Partner at Ibbaka. See his Skill Profile on Ibbaka Talio.
Checklists are one of the best ways to manage a complex process and make sure that all critical steps are being taken. Atul Gawande has written an excellent book on this The Checklist Manifesto: How to Get Things Right. In the book, he shows how everyone from airplane pilots to surgical teams can benefit from using checklists to manage complex processes with many dependencies.
Introducing new pricing and packaging is a complex process with many dependencies. It is the sort of thing that needs a checklist, so Ibbaka is providing you with one!
Ibbaka’s Best Practices in Introducing New Pricing: Your Six Step Checklist.
The checklist codifies a 6-step plan that maximizes the odds of success.
Understand Value
Understand value and be able to connect your new packages and pricing to the value you promise.
Gather Evidence
Validate that value for your current customer base, your target markets and your partners. Use that to segment the market so that you can make effective choices when you introduce new pricing.
Prepare Messaging
Prepare messaging for each segment, and understand how you will test and evolve the messaging.
Configure the Systems
Configure the systems, partner agreements, and legal documents you need; address legal and accounting issues (packaging and price changes can trigger changes in revenue recognition).
Train your Team
Train your marketing, sales, implementation, and customer success teams. Train partners and influencers.
Train Customers
Train your customers so that they can explain and justify the changes internally.
These steps are based on value based pricing and value selling best practices and have been field tested on companies with revenues from $2 million to $200 million.
The checklist also serves as a guide to the tools you need to execute.
Pricing change is often a strategic transformation. Make sure you observe the market conditions, orient yourself around value to the customer, decide what to do using the Ibbaka checklist, and then act effectively so that you can observe what happens.