Product managers at technology service providers are challenged to update their product portfolios to remain aligned to the needs of a rapidly evolving market. Current and prospective customers too often seek the latest digital technologies that merely hold the promise of improving organizational processes. A product manager’s best response is to factor customer experience (CX) and strategic pricing into product planning to transform product portfolios.
When asked to choose their top product management leadership initiatives in the 2018 Gartner Product Management Survey, two initiatives rose to the top of the list: Set strategic pricing and sales models for products and build customer experience into product development.
“Product managers are becoming product owners, facing a series of new priorities in critical product leadership initiatives,” says Emil Berthelsen, Senior Director Analyst, Gartner.
Set strategic pricing and sales models
Strategic pricing and sales models are executive decisions around how best to price products (e.g., demand-based, cost-based or competition-based) and how to select between options such as SaaS and channel marketing strategy. To set effective pricing and sales models, define the goals of the business, establish who your customers are, determine how they will use the products and services, and know the pricing and sales models of your competitors. It’s also important to outline and clarify the various types of strategic pricing strategies available, such as penetration, premium, tier, value, sandwich and competitive pricing.
Align your strategic pricing and sales models with buyer behaviors and demands
Setting pricing and sales models is not an isolated exercise. Product managers should collaborate closely with product marketing, the chief financial officer and sales colleagues to effectively set up their models.
Align your strategic pricing and sales models with buyer behaviors and demands, and use market intelligence to counter competitor pricing strategies.
Build customer experience into product development
To improve product development and differentiation, focus on customer experiences, business models, repeatable service models, associated services and go-to-market strategies, not just technical features. Look inside and outside the company for customer insights. Externally, develop continuous channels of communications and interactions with customers to effectively capture their requirements and feedback. Internally, invite new ideas and ways to develop customer experiences from cross-functional stakeholders and teams within the company.
Adopt a design-thinking approach to build customer experience into product development — creating business-focused outcomes that generate transformative, innovative and strategic change.