A write-up on exercises and questions directly from “Monetizing Innovation” by Madhavan Ramanujam & Georg Tacke. I take no credit for the below. I have just pulled the information out of the book for personal use.
Contents
Feature Shocks, Minivations, Hidden Gems, and Undeads
Four Flavours of Monetising innovation Failures
| Failure Type |
Description |
Symptoms |
Where does it occur? |
Solutions |
| Feature Shock |
Cramming too many and sometimes wrong features into a one-size-fits-all product |
- Product Driven Culture |
|
|
- Over-engineering
- Unclear value-prop
- Too many escalations
- Difficult selling
- Frequent price cuts | - Tech companies
- Software/ internet
- Subscriptions
- Financial services
- Media/ telco
| |
| Minivation | Despite being the right product for the right market it is underprices and does not achieve full market potential | - Lack of ambition
- Low-balling targets
- Minimal escalations
- Few pricing problems
- Fast sales cycles
- Sales easily hit targets | All industry verticals - tech, software / internet, auto, financial services, chemicals, industrial, healthcare, CPG / retail, telco, etc. | |
| Hidden Gem | A blockbuster product that is never properly brought to market because it does not get recognised | - Lack of recognition
- Play it safe mentality
- Outside comfort zone
- No one responsible for harnessing gems | Occurs whenever there is a disruption or change: in business models, channel strategy, focus change from product to services, etc. | |
| Undead | Products that should have been killed - Answers to questions no one asks for the wrong answer to the right question | - Lack of objectivity
- Yes-maybe-no culture
- Pet projects
- Very low demand
- Sales struggle
- Negative press | All industry verticals - tech, software / internet, auto, financial services, chemicals, industrial, healthcare, CPG / retail, telco, etc. | |
Have the “Willingness-to-Pay” Talk Early
Why Have the WTP Talk Early?
- It will tell you right away whether you have an opportunity to monetise your product— or not.
- It will help you prioritise features and design the product with the right set of features.
- It will enable you to avoid the four types of failures.
What Information are you Trying to Uncover?
- You want to understand the customers overall WTP for the product and the price range they would consider reasonable (if at all)
- Then you want to ask if the price range would work for your company
- You are looking to understand how much value the customers place on each feature and what they would be willing to pay in value. This can help to build a roadmap of what to build first.
How to Approach the WTP Talk?
- Tap into pockets of internal excellence. Before you have customer conversations form a group of internal cross functional experts and conduct a expert judgement workshop. Ask the questions you would ask to customers here first. Do this by sending out a survey beforehand to then discuss in the session.
- Position the customer discussions as the “value talk”. Don’t position it as pricing or willingness to pay. Rather frame it is “we want to talk about our latest innovation ideas and how we can continue to add value for you.”
- Valuable insights come from the simplest questions. Direct questions often yield important insights.
- Make 25 percent of the questions “why”. Its simple but works. If they say “I would pay $20” as them “why do you say that?”. If someone says “I don’t see value in a particular feature and won’t pay for it,” ask them “why is that, and what would the product need to make it more valuable?”.