The customer journey is your guide to pricing communication
Steven Forth is a Managing Partner at Ibbaka. See his Skill Profile on Ibbaka Talent.
Pricing and value communication is central to good price management. When and how price is introduced into the customer conversation has a big impact on price acceptance. By introducing value first it is possible to put price in the context of value and to avoid negotiations focussed solely on price.
Beyond communication, value documentation can be even more important. We often make value promises in the marketing and sales process. It is important to document how that value is being delivered. Documenting and confirming value delivery is important in two ways:
It gives critical feedback to the product and services teams on how to improve value delivery
It lays the ground for upsell and renewals
The customer journey map provides a guide to how to plan these conversations. Layering pricing and value into the customer journey is a best practice.
Check out the Ibbaka Valio platform
Most pricing specialists focus on tools like the pocket price waterfall, price dispersions, Economic Value Estimation or value maps. These all have an important role to play. But they leave out the customer and customer experience. And they are all analytical tools that do not help shape value and price communication. The customer journey map is an important complement.
Customer journey maps organize each interaction with customers from the first glimmerings of awareness until after a customer has left and is no longer a customer. They are commonly organized as touch points along one axis and a set of swimlanes on the other axis.
Touchpoints are all the interactions with customers. When one of our customers mapped these they found seventy-eight major touchpoints in the customer journey. This included everything from visits to the website and conversations on social media to the more formal sales process. They did not stop there though, they researched the customer’s experience with implementation, support, reordering (consumables is part of their business) and even how the customers felt about invoices and contracts. The goal was to understand where value communication and delivery were breaking down across all of the touchpoints.
They did not stop there. The same company, which is a Fortune 500 company, also looked at the supplier experience in order to find ways to become easier to do business with.
Touchpoints are the spine of the customer journey map. Just like the human spine, there are nerves that come out from each touchpoint. These include sensors, that help one understand what is happening and actuators, that help to shape what is happening.
Sensing - Each touchpoint needs ways to sense what the customer is thinking, what they are feeling and what actions they are taking. The mechanism depends on the mode of the touchpoint. If it is online it is easy to track sequences of actions and there is software to help you to do that (what is difficult is to connect the dots).
In-person conversations come with sensing built in, especially if they are structured as conversations, but sometimes no record is kept and the promises and claims evaporate in a short time.
Once the customer is interacting through your software there are many opportunities to sense how they are responding to your value promises. One of the best ways to do this is to by seeing if people are following value paths to their conclusion, and getting real value. See Value paths are the key to usage-based pricing.
Shaping - It is not enough to simply sense, or communicate with customers. One has to shape their actions. One of the best ways to do this is by communicating, delivering and documenting value. Successful companies do the first two almost by definition. Many companies skimp on value documentation though. A way to memorialize value is critical to building long term relationships. One cannot do this with superficial measures like Net Promoter Scores.
What holds it together - The series of touchpoints can easily disintegrate into a series of unconnected experiences that do not make sense to the user or tell an overall story. What makes the customer journey a journey, with a destination, is a shared commitment to value on the part of buyer and seller and the development of connected skills.
A shared commitment to value - To really create value there has to be a commitment from both sides. Value is always in the context of the customer and relative to their next best alternative. It is differentiated value that matters. On the other hand, the best solution in the world will not deliver value if people do not use it or use it in perverse ways.
The Green Wheel is the Value Cycle of Create - Communicate - Deliver - Document - Capture (Repeat)
The need to connect value to pricing along the customer journey is why Ibbaka developed the Value Pricing Dashboard. It is a value communication and documentation application that aligns value to price.
Connected skills - There are few solutions that can deliver value without skills. There are skills needed at each touchpoint on both sides. The vendor will need specific skills and knowledge in order to create, communicate, deliver and document value. These skills differ at each touchpoint. But it is not just the vendor’s skills that matter.
Customers need specific skills at each touchpoint in order to understand and accept the value communication and to participate in the value creation. Think of how much work Hubspot has done to help its users first understand and then execute on content-based marketing.
Defining these and helping customers build the skills they need is an important part of supporting the customer journey. Some of these skills will be complementary skills (skills held by two different people that combine to create value that neither could have created on their own).
Implement Customer Value Management
The Value Pricing Dashboard will be where you integrate applications across the customer journey
The customer journey is your guide to pricing communication (This Post)
Accelerate business growth with Ibbaka’s Value Pricing Dashboard
Ibbaka Performance Announces World’s First Value Pricing Dashboard (Press Release)
