Monetizing Innovation: How Smart Companies Design the Product Around the Price

In this book, we have boiled these secrets down into the following nine new rules for innovation success. The rules are contrary to what most executives have learned about product development: Have the “willingness to pay” talk with customers early in the product development process. If you don't do it early, you won't be able to prioritize the pro

The Three Steps to Create Great Value Communications Step 1: Develop Crystal-Clear Benefit Statements—Not Feature Descriptions

Step 2: Make Your Benefit Statements Segment-Specific

The message here is clear: You need to create segments in order to design highly attractive products for each segment. And you must base your segmentation on customers' needs, value, and WTP. This way, segmentation becomes a driver of product design and development, not an afterthought.

Control discounting tightly. If demand for your new product is below expectations, only use price cuts as a last resort, after all other measures have been exhausted.

But reducing your price so soon sends an unintended message: that your new offering has less value than you initially communicated. In effect, you're telling potential buyers your company has made a mistake, in quality or otherwise. But even if you have a quality problem, a price cut won't fix it. In fact, it could make matters worse for you.

Myth #5: Until the business knows precisely what it's building, it cannot possibly assess what it is worth.

When given a set of choices, people will avoid extremes.

Today, the Cayenne accounts for about half the company's total profit, with the venerable 911 generating a third.