Monetizing Innovation (eBook)

MADHAVAN RAMANUJAM is a Board Member and Partner at Simon-Kucher & Partners, based in the San Francisco/Silicon Valley office. He has provided advice to companies of all sizes, ranging from Fortune 500s to startups. He has led more than 125 monetization projects for Internet, Software and Technology clients, and has helped bring numerous new products to market. GEORG TACKE is co-CEO of Simon-Kucher & Partners. Over the last 25 years he has helped develop the firm from a small boutique to a global consultancy with over 900 employees. Georg is regarded as one of the leading international pricing and monetization experts. In this area he also acts as a personal consultant to C-level executives in various industries. SIMON-KUCHER & PARTNERS is the world's largest pricing consultancy. For more than 30 years it has been helping companies boost their sales and profits through superior monetization strategies. Simon-Kucher is active in all major markets; currently the global network spans 32 offices in 22 countries.

Foreword xi

Acknowledgments xiii

Part One: The Monetizing Innovation Problem 1

Chapter 1 How Innovators Leave Billions on the Table: A Tale of Two Cars 3

Chapter 2 Feature Shocks, Minivations, Hidden Gems, and Undeads: The Four Flavors of Monetizing Innovation Failure 15

Chapter 3 Why Good People Get It Wrong 33

Part Two: Nine Surprising Rules for Successful Monetization 37

Chapter 4 Have the "Willingness-to-Pay" Talk Early: You Can't Prioritize without It 39

Chapter 5 Don't Default to a One-Size-Fits-All Solution: Like It or Not, Your Customers Are Different 53

Chapter 6 When Designing Products, Configuration and Bundling is More Science Than Art 63

Chapter 7 Go beyond the Price Point: Five Powerful Monetization Models 79

Chapter 8 Price Low for Market Share or High for Premium Branding? Pick the Winning Pricing Strategy 97

Chapter 9 From Hoping to Knowing: Build an Outside-In Business Case 111

Chapter 10 The Innovation Won't Speak for Itself: You Must Communicate the Value 121

Chapter 11 Use Behavioral Pricing Tactics to Persuade and Sell: Sometimes Your Customers Will Behave Irrationally 135

Chapter 12 Maintain Your Price Integrity: Avoid Knee-Jerk Repricing 149

Part Three: Success Stories and Implementation 161

Chapter 13 Learning from the Best: Successful Innovations Designed around the Price 163

The Porsche Story--Veering Off the Sports Car Track to Create Two Winning Vehicles 164

LinkedIn--Monetizing the World's Largest Professional Network 170

Dräger--Collecting the Specs for Successful Industrial Products before Engineering 174

Uber--Monetizing a Disruptive Innovation through Innovative Price Models 182

Swarovski--The Payoff from Crystal-Clear Ideas on What Consumers Will Pay 188

Optimizely--How to Price Breakthrough Innovation 194

Innovative Pharma--How a Customer Value Driven R&D Approach Boosts Success 200

Chapter 14 Implementing the "Designing the Product around the Price" Innovation Process 207

Notes 219

Index 227

"Madhavan Ramanujam is to monetization strategy what Bob Marley is to reggae music. You must read this book."
--Bill Gurley, Board member of Uber and General Partner at Benchmark