Product Thinking Episode 157: Aligning Pricing with Value in the Technology Space: Insights from Jean-Manuel Izaret of Boston Consulting Group
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Feb 7, 2024 Jean-Manuel Izaret, Global Leader of Marketing, Sales, and Pricing Practice at Boston Consulting Group, joins Melissa Perri on the Product Thinking podcast to discuss strategic pricing in the technology industry. They explore different pricing models, segmenting users, challenges of pricing AI models, and the concept of fairness in pricing.
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Software Pricing Focuses on Value
- Pricing software should focus on value, not cost, since software has negligible marginal distribution costs.
- Firms must choose appropriate pricing units and understand market segments to capture value.
Price by Customer Value Segments
- Segment customers by value and package features accordingly to justify different price points.
- Pricing higher for customers who gain more value can significantly increase revenue.
Incorporate Pricing Early in Development
- Product managers should think about pricing strategy early, not only price points.
- Maintain a prioritized roadmap balancing broad market and unique customer requests.