Driving Business Value Using a Value Pricing Dashboard
Karen Chiang is a Managing Partner at Ibbaka. See her Skill Profile on Ibbaka Talent.
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Being able to position value and quantify value is central to pricing. At Ibbaka, we first understand how a solution creates value and who it creates value for, and then we design the pricing. But understanding value is about more than just pricing. It is at the center of the value cycle and is used by product development, marketing, sales and (critical in a subscription business) by customer success.
In order to grow company valuation through sustained lifetime customer value, it is important to know how and when your customer realizes the value (benefit) of your solutions. Often though, customer facing parts of the organization do not have the tools to be able to effectively quantify, document and communicate the value delivered.
Ibbaka pulls all of the data about value and price together in one place with its Value Pricing Dashboard. This is an indispensable tool for managing value and price across the customer value journey, through the stages of Win, Keep, Grow to use Mark Stiving’s handy terms for how to develop a subscription business.
Many of Ibbaka’s customers come to us asking us to design or redesign their pricing models. The reality however is that they are trying to ensure that they meet their growth targets related to revenue (typically annual recurring), Customer Lifetime Value (LTV) or to the LTV/CAC ratio (Customer Lifetime Value to Customer Acquisition Cost). In some cases, we design pricing to improve gross profit margins or for other strategic goals. To effectively achieve this, businesses need to foster a culture based on delivering value to customers. And, they need a way to help guide the process.
The primary job of the Value Pricing Dashboard is to align value and price across the customer journey.
“Ibbaka’s approach to value-based pricing has transformed how we go to market, providing us a new growth model and the pricing model to support it. They help guide our own innovation by connecting price to value.”
— ROBERT M. HOEHN, CEO & CO-FOUNDER, IDEASCALE
The Ibbaka Value Pricing Dashboard helps our customers achieve the following:
Communicates Value - the Value Model enables the ability to tell a compelling value story
Price Consistency - the Value Pricing Dashboard has your pricing model helps people to understand price justifications
Gather Data - capture and organize data about value and pricing
Identify Patterns - see how customers are similar in the way they perceive value
Track Trends - see how price realization and value are changing over time
Evolve Pricing - to achieve strategic goals
Pricing and value are central to any organization. Here are ways in which different stakeholders get value from the dashboard.
Executives can use the dashboard to track performance and see trends in the way in which the business is delivering value to its customers. It can use this data to plan strategic investments.
Sales is inclined to leverage the value model to craft a narrative on the benefits with quantifiable metrics. Pricing will be defendable as a result.
Customer Success is able to document value delivered so as to drive upsell and win renewals.
Value Engineers and Pricing Analysts use the data and analysis tools to understand patterns and trends and evolve the models.
We are constantly looking for ways to improve the value we deliver. As such, we are keen to understand how you would find value and what you would like to see in a value pricing dashboard. Comment on how you would use a value pricing dashboard as well as some of the key insights you would like to gain from it.
