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Steve Johnson is a recognized thought leader and storyteller within the technology product management community. As co-founder of <a href="http://www.AppliedFrameworks.com">Applied Frameworks</a>, he helps product teams implement strategic product management in an agile world.

Steve Johnson

<img loading="lazy" decoding="async" src="https://www.mindtheproduct.com/wp-content/uploads/2013/11/pricing-vs-value-300x188.png" alt="Pricing vs Value" width="300" height="188" class="alignright size-medium wp-image-4035" srcset="https://www.mindtheproduct.com/wp-content/uploads/2013/11/pricing-vs-value-300x188.png 300w, https://www.mindtheproduct.com/wp-content/uploads/2013/11/pricing-vs-value.png 800w" sizes="(max-width: 300px) 100vw, 300px" />Pricing strategy is all about value. &#8216;Must-have&#8217; capabilities are more expensive than &#8216;nice to have&#8217;.  So what&#8217;s the value to the client?
A simple way to look at pricing is to use a three-by-three matrix (like a game of tic-tac-toe or noughts and crosses). The vertical axis is the cost of doing it myself, while the horizontal is the number of vendors that offer it. Mark each with low-medium-high. The closer you get to the upper left, the more you can (and should) charge. That is, if it would take a lot for me to learn and there are few vendors who offer it, you can charge me a lot. If it&#8217;s fairly easy to learn and I have lots of choices, you won’t be able to charge very much.
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-2061 aligncenter" alt="tictactoe_pricing" src="http://u10c.files.wordpress.com/2013/10/tictactoe_pricing.png" width="432" height="324" />
For example, I&#8217;d put <a href="http://en.wikipedia.org/wiki/Scrum_(software_development)" target="_blank">scrum method</a> training somewhere in the middle, but more towards the lower-right. I can read books, I can attend training from many vendors and I have access to thousands of certified or self-proclaimed scrum coaches who can come to work with my team.
One way to manipulate this a little is to offer a unique capability that is unavailable elsewhere. A metaphor, a framework or an approach, for example, which is unique to your offering.
Finally, the challenge isn&#8217;t whether you can charge $5 or $50. The challenge is whether you can charge anything more than $0. With so much free content available, you have to offer something that people are willing to pay for.

core/freeform

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Pricing is All About Value

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Pricing is All About Value

Steve Johnson

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