Here at Pricing Innovations, we’ve set out to reimagine the way we innovate, develop and monetize products that meet their revenue and profit goals. That’s why we created the Pricing Canvas ™.
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Pricing Innovations: Pricing Canvas (TM) Guide
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PRICING CANVAS ™ GUIDE
Pricing | Monetization | Go-to-Market
PRICING INNOVATIONS
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2Hello. We are Pricing Innovators.
We’re a product consultancy focusing on innovations in pricing. We go beyond making monetization recommendations, and inform all
aspects of your product, offer, pricing, and cost structures as well as your go-to-market plan.
We’ve set out to reimagine the way we innovate, develop and monetize products that meet their revenue and profit goals.That’s why we
created the Pricing Canvas ™.
Pricing & Launching
New Products
Pricing Multi-Tiered
Offers & SaaS
Changing
Monetization
Models
Changing Prices &
Pricing Structures
Monetizing
Product Lifecycle
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PRICING & MONETIZATON BASICS
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Today, more than 80% of the companies innovate and launch their new products using a “product-focused” innovation process that
fails to align the four key structures of a solution. Most new solutions fail to
• Solve for the gap in customer needs and expectations
• Capture different types of buyers’ willingness to pay
• Align their revenue structures with the benefits received by the different types of buyers
• Execute a market play with a competitive and profitable cost structure.
Product-focused Innovation
Product Cost Price Value Customer
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5
”Value-focused” innovation and monetization process
not only helps you develop the products that people
will actually buy but also align your product, offer,
pricing, and cost structures with the true dynamics of
your buyers, users, and market.
Value-focused Innovation
Go-to-Market
Test & Plan
Cost & Product
Structure
Value Metric
& Pricing
Value
Stack
Value
Gap
Analytics
& Metrics
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THE GOLDEN RULE OF PRICING
Develop offerings that people will acquire, for a
price commensurate with the benefit delivered, at a
cost structure more favorable than the competition.
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7Pricing is not about “prices”
Getting pricing right means identifying the pricing structure, pricing model, and pricing window, that drives acquisition, monetization,
and profit growth - all at once.That is what it takes to make it in the market.
ACQUIRE MONETIZE GROW
The right pricing structure
aligns your offering with the
value stacks of different types
of buyers, and drive
acquisition.
The right pricing model
allows you to monetize your
product features and
attributes in ways that their
benefits are realized by your
buyers.
You can increase your
customers’ lifetime value as
they continue to realize the
offer’s benefits. Customers
pay more, as they receive
more value.
PRICING
STRUCTURE
PRICING
MODEL
PRICING
WINDOW
Align your product structure
with your different buyer types
Align your profit model with
how different buyers benefit
differently
Align the value you deliver with
your buyers’ willingness to pay
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Price
Best for
Benefit #1
Benefit #2
Benefit #3
Benefit #4
Benefit #5
Price
Best for
Tier #3
CTA
Benefit #11
Benefits #12
Benefit #13
CTA
Price
Best for
Tier #1
Benefit #6
Benefit #7
Benefit #8
Benefit #9
Benefit #10
CTA
Pricing structure 8
Align your pricing structures with the ways in which different buyers need, buy, utilize, and benefit from the benefits differently. In the
case that you have 10, 20 different types of buyers, perform a frequency distribution to identify the top 3-4 which address more than 60%
of your market. And remember: people don’t buy features; they buy benefits.You must translate the features and attributes into
benefit statements.
Tier #1
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Basic Plus Team Enterprise
Get hands-on experience with the
innovative solution
Realize benefits commensurate
with the price
Upgrade for achieving more of the
same benefits
Upgrade for achieving new benefits
Upgrade for achieving even more
benefits
Upgrade for benefiting in a different
way
Upgrade for benefiting in a different
scale
9
Pricing model
Align the value delivered with the various pricing windows. Determine whether or not you can create multiple tiers or plans and how you
will mobilize buyers from lower priced tiers to higher priced tiers. Instill fences, caps, and triggers to influence the buying behavior.
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Positive
Differentiation
Reference Point
Negative
Differentiation
Pricing Window
Reference
Value
Economical
Value
Floor
Value
Relevant
Costs
Pricing window
Align your pricing window with the benefits realized. Quantify the reference value, differentiated value, floor value, and economical
value, and deduct a pricing window for each of the pricing plans.
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THE PRICING CANVAS ™
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12How does the Pricing Canvas ™ Work?
The Pricing Canvas ™ consists of ten sections each representing a
structural component of your business, product, and market. Each
section will help you to design your pricing and monetization plans
using the principles of strategic, competitive, and value-based
pricing.The guiding statements will navigate you in validating the
outcomes, benefits, and economic impact of your offering, and
aligning them with the commensurate pricing levels.
Product
Structure
Partners &
Channels
Product & Go-
to-Market
Strategy
Competitive
Value Profile
Offer Structure
Value Metric
Testing &
Validation
Cost Structure
Pricing
Structure
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1310-D Alignment Process: Pricing Canvas ™ aligns your structures with your growth goals
The Pricing Canvas ™ not only helps you develop the products
that people will actually buy but also align the 10 dimensions
which drive growth. Business growth occurs in four distinct ways:
1. Driving new acquisition
2. Increasing monetization
3. Improving profitability
4. Gaining competitive market share
Product
Structure
Partners &
Channels
Product & Go-
to-Market
Strategy
Competitive
Value Profile
Offer Structure
Value Metric
Testing &
Validation
Cost Structure
Pricing
Structure
ACQUISITION
MONETIZATION
PROFITABILITY
COMPETITION
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14Driving new acquisition
In order to drive growth by new acquisition, focus on the following
three sections of the Pricing Canvas:
1. Product structure: determine how you can innovate for the value
gap competitively, and focus on the features and attributes that
drive perceived value and willingness to pay
2. Partners & channels: identify new and additional ways of
partnering for your non-core activities and increasing your reach
3. Offer structure: align your offering with how your buyers need,
buy, use, and benefit from your offering differently
Product
Structure
Partners &
Channels
Competitive
Value Profile
Offer Structure
Value Metric
Testing &
Validation
Cost Structure
Pricing
Structure
ACQUISITION
MONETIZATION
PROFITABILITY
COMPETITION
Product & Go-
to-Market
Strategy
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15Driving monetization
In order to drive growth by monetization, focus on the following
three sections of the Pricing Canvas:
1. Offer structure: align your offering with how your buyers
need, buy, use, and benefit from your offering differently
2. Value metric: choose the pricing dimension which aligns
your revenue with how the benefits are realized
3. Pricing structure: formulate the pricing structure that best
mimics the value stacks of different buyers
Product
Structure
Partners &
Channels
Competitive
Value Profile
Testing &
Validation
Cost Structure
ACQUISITION
MONETIZATION
PROFITABILITY
COMPETITION
Offer Structure
Value Metric
Pricing
Structure
Product & Go-
to-Market
Strategy
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16Driving profitability
In order to drive growth by profitability, focus on the following
three sections of the Pricing Canvas:
1. Pricing structure: formulate the pricing structure that best
mimics the value stacks of different buyers
2. Testing & validation: identify key pricing metrics, scenario
test various price vs. adoption models, and then validate the
purchase behaviors
3. Cost structure:Valuate the impact of all structural change in
your fixed & variable costs, and determine how your cost
structure will inform your roadmap
Product
Structure
Partners &
Channels
Competitive
Value Profile
Testing &
Validation
Cost Structure
ACQUISITION
MONETIZATION
PROFITABILITY
COMPETITION
Offer Structure
Value Metric
Pricing
Structure
Product & Go-
to-Market
Strategy
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17Driving competitive market share
In order to drive growth by gaining market share, focus on the following
three sections of the Pricing Canvas:
1. Product structure: determine how you can innovate for the value
gap competitively, and focus on the features and attributes that
drive perceived value and willingness to pay
2. Competitive value profile: Determine the basis of competition, and
your premium differentiators in relation to the next best competitive
alternative
3. Cost structure:Valuate the impact of all structural change in your
fixed & variable costs, and determine how your cost structure will
inform your roadmap
Product
Structure
Partners &
Channels
Competitive
Value Profile
Testing &
Validation
Cost Structure
ACQUISITION
MONETIZATION
PROFITABILITY
COMPETITION
Offer Structure
Value Metric
Pricing
Structure
Product & Go-
to-Market
Strategy
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Tips for making the most of the Pricing Canvas ™
Pricing is one of the most powerful levers to transform a good product into a good business. A key set of metrics such as
profitability, average revenue per buyer, buyer acquisition, customer lifetime value and retention are all driven by your pricing.The
key is to identify the right drivers of adoption, monetization, and growth specific to your space.The Pricing Canvas ™ is the ideal
tool for that because you can focus on any of the ten sections individually, and find ways to fuel your specific drivers. To make
the most out of the Pricing Canvas (TM):
1. Work as a team and set aside at least half a day for the initial discovery
2. Focus on the value of your offering's benefits over its features and attributes
3. Challenge your assumptions and statements and assess what data and insights you have to validate them
4. Brainstorm the designs of experiments that you can use to test & learn your buyers’ willingness to pay
5. Compile all your insights and learnings, and schedule a Rapid Pricing Assessment with us. We can help you with the next
steps.
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Pricing New Products We’ve helped an ed-tech SaaS company to identify a brand-new segment, reconfigure its product and pricing
structures, and adjust its go-to-market plan which created an additional $1.5M annual revenue potential.
Pricing Multi-Tiered
Offers & SaaS
We’ve helped a medical technology company to productize a new digital service for its 3,000+ customer base and
align its pricing plan with the customers’ revenue upside creating an additional $3.2M annual revenue potential
and 15% improvement in customer retention.
Changing Monetization
Models
In healthcare, the biggest question is “Who pays?” We are cracking at that question everyday. We’ve helped a
healthcare delivery technology company to set up new partnership models with hospitals and get their pricing
structures right which expanded their addressable market by 420%.
Changing Prices & Pricing
Structures
Our client – a prominent design agency – had continued adding new features and improvements on their
technology product for over five years without any pricing adjustments.We helped them restructure their
offering and roll out a new pricing plan.The new plan had no impact on their existing churn rates while creating
an average 17% increase in their annual profits.
Monetizing Product
Lifecycle
We’ve helped a financial technology company to price their future product roadmap and align their cost
structure with alternative sales and revenue models.The realignment enabled a 12% more favorable cost
structure than initially planned and opened up three new industry verticals.
Pricing can drive revenue and profits in new and different ways
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Rapid Pricing Assessment
$ per day
PRICING
DATA ANALYSIS
PRICING WORKSHOP
PRICING PLAN
Monetization-as-a-Service
$$$ per month
GROWTH
Learn moreLearn more
6-12 Weeks Team Coaching
$$ per week
PRODUCT
Learn more
We walk the talk: here’s our own pricing structure 22
What we deliver
An opportunity analysis and
pricing plan using the principles of
the Pricing Canvas (TM).
What we deliver
A strategic, competitive, value-
based pricing strategy, pricing
structure, and go-to-market plan.
What we deliver
A comprehensive monetization
plan for your portfolio, and
systematic adjustment of pricing
and roadmap.
DATA CAMPAIGNS
10-D ALIGNMENT
GO-TO-MARKET PLAN
MONETIZATON
MOBILIZATION
ONGOING MONITORING
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Schedule a Rapid Pricing Assessment today
✉ info@pricinginnovations.com 📞 +1-(612) 351-2503 @pricingpros
What new revenue and profit opportunities can pricing
innovations create for you?
Let’s find out!
Book a Rapid Pricing Assessment Today!
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2010
2012 2015
2014
2003
Product Development
Commercialization
MBA
Consulting
2015
Pricing InnovationsTechnology Marketing
Product Management
Product Marketing
Business
Chemical
Engineer
Meet our founder: Esra Kucukciftci
Notes de l'éditeur
So in microeconomic terms value is a quantifiable notion and it equals customers’ willingness to pay minus their opportunity cost. The core of value innovation lies in creating the differentiated products and services that maximize customers’ willingness to pay and minimize their opportunity costs. And again, in microeconomic terms, value isn’t being created unless you can monetize it.
Think of all those features and product attributes you throw around in your product discussions, think of all the amazing ways your product impacts your customers. And notice that those features that customers are willing to pay for matter more than anything, and you have to get THOSE right, in order to make it.
This one is a particularly hard one to swallow for product owners, designers, and engineers since they are so close to their product and have a much more complete vision of it than their customers ever will. Believe me, I’ve been in all those positions and it was like people were asking me to kill my baby, it’s hard it just is. To make it in the market, what people are willing to pay for and how much matters more than anything else.
So in microeconomic terms value is a quantifiable notion and it equals customers’ willingness to pay minus their opportunity cost. The core of value innovation lies in creating the differentiated products and services that maximize customers’ willingness to pay and minimize their opportunity costs. And again, in microeconomic terms, value isn’t being created unless you can monetize it.
Think of all those features and product attributes you throw around in your product discussions, think of all the amazing ways your product impacts your customers. And notice that those features that customers are willing to pay for matter more than anything, and you have to get THOSE right, in order to make it.
This one is a particularly hard one to swallow for product owners, designers, and engineers since they are so close to their product and have a much more complete vision of it than their customers ever will. Believe me, I’ve been in all those positions and it was like people were asking me to kill my baby, it’s hard it just is. To make it in the market, what people are willing to pay for and how much matters more than anything else.
So in microeconomic terms value is a quantifiable notion and it equals customers’ willingness to pay minus their opportunity cost. The core of value innovation lies in creating the differentiated products and services that maximize customers’ willingness to pay and minimize their opportunity costs. And again, in microeconomic terms, value isn’t being created unless you can monetize it.
Think of all those features and product attributes you throw around in your product discussions, think of all the amazing ways your product impacts your customers. And notice that those features that customers are willing to pay for matter more than anything, and you have to get THOSE right, in order to make it.
This one is a particularly hard one to swallow for product owners, designers, and engineers since they are so close to their product and have a much more complete vision of it than their customers ever will. Believe me, I’ve been in all those positions and it was like people were asking me to kill my baby, it’s hard it just is. To make it in the market, what people are willing to pay for and how much matters more than anything else.
So I consider myself a product person. I started my career as a chemical engineer and primarily focused on engineering processes for product development and commercialization. Then I transitioned into technology marketing, product management, and product marketing. I founded Pricing Innovations in 2015. We’re a product consultancy focusing on pricing and monetization. Typically the way it works is with more than 80% of our clients so far, when we find the right pricing structure, pricing model or pricing window for them it becomes clear that they don’t have the right product structure in terms of either they don’t have the right feature set or fencing, perhaps they are delivering too much value in their free or freemium versions. We then help them get their product and offer structure right especially to derive a multi-tiered structure. Once we figure those out their go-to-market strategy just changed so we help take the new offering to market as well. In that sense we touch every aspect of product.
And from one product person to another, I’d like to frame this notion of codefreeze for us all when you’re thinking of codefreeze, think in the realms of product management for your business. If you business was a product what would it do, what would the codefreeze look like etc. Ultimately, the primary function of your business is actually to make it in the market, and how can your business develop and launch products that ultimately maximize your chances to make it in the market.
