How To Succeed In Product Management | Jeffrey Shulman, Red Russak & Soumeya Benghanem 13: Product Managers Digging Deep Into Pricing Strategies
In this episode of the How to Succeed in Product Management Podcast, marketing professor Jeff Shulman and The Product Management Center advisory board members Red Russak and Soumeya Benghanem welcome Divya Sreekumar (Amazon Web Services) and Harish Komaragiri (Facebook) to talk about product pricing strategies. A lot goes into determining the price of a product which includes the needs of the customer, product value, and willingness to pay of the target audience. The panel also tackles the different spectrum of responsibilities a PM has and how it can affect the overall business model.
Support for How to Succeed in Product Management is brought to you by Apptentive, which enables product managers to measure shifts in customer emotion and gather actionable feedback across the mobile customer journey. To learn more, go to Apptentive.com/UW.
What to Listen For:
- 00:00 Intro
- 01:48 Why PMs need to learn product pricing
- 04:12 Product pricing strategies and modifying existing pricing
- 07:03 Strategizing around pricing is both exciting and delicate
- 10:20 PMs define customer value, corporate defines product value
- 11:43 The effort put into developing the product should reflect in its pricing
- 14:36 Getting a hold of the product value and where you’re going as a business
- 17:01 Figure out the problem being solved and who is it for
- 19:31 The product is marketed as a revenue enabler
- 27:11 Pitfalls for new PMs is an overly narrow perspective of growing a product
- 31:15 Spectrum of responsibilities a PM has
- 33:32 3 things that affect pricing: needs of customer, value, and willingness to pay
- 39:14 Advantages of using a cloud versus maintaining a hardware
- 42:13 Sustainable business follow a cost-based model
- 45:54 Business model is a bigger concept than just pricing
- 46:50 Pricing a new product for enterprise customers
- 50:58 Economic value estimation - what are the customers cost and value drivers
- 52:11 Use real customers to product test
- 53:00 Customers are willing to pay for the most painful problem
- 58:29 Book recommendation from Soumeya
- 59:50 Train your brain to understand how the market works
- 01:02:11 Applying game theory in pricing
- 01:05:09 Think about the economics you’re driving with your product decisions