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Strategic Pricing for New Product Launches

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by

Jim Szafranski

on 30 September 2017

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Transcript of Strategic Pricing for New Product Launches

Key Tenets
Quantified
Value
Assumptions
Testable
Decision-making Unit
Decision-making Process
Competitive Value Positioning
Persona-Product Value Matrix
Value Metrics
TAM
Markets
Beachhead
Market
Positioning
Mission
Help people to move from sharing information to connecting and communicating ideas, giving context to information

Differentiating Capabilities and Resources
Native Cloud Application
Library of 200M Shared Presentations
Ability to Incorporate other Media
Best in Class Visual Canvas Technology
Very large (young) user base

Potential Growth Models
Competition
Gaps
Place to add weaknesses that we must address to deliver our vision as we discover them through the process.
Core
Preserve Optionality
broad applications
low barrier to adoption
Interrelated products for highly engaged teams creating reusable assets that are shared broadly and get better with each user involved
teamwork
Encourage Daily Use
Build Network Effects
Not Testable
What are we committed to being the best in the world at?
Strategic Pricing Process
Negative optionality: Companies (1) focused on a niche market, (2) have employees with limited technical skills, (3) which raised too much money at an inflated early valuation or (4) are highly leveraged (high burn rate) are examples of companies with negative optionality.
Built to Last:
Pursue projects with large upside (preferably unlimited) with limited downside (preferably tiny).
Each additional user adds value to all other users - as the network grows the service becomes more valuable.
Network Effect = Virality

/
Networks are
Context Specific
Critical Mass is
Network Specific
There are four main types of Network Effects:

1. Classic Networks (Skype, Facebook, PayPal)
2. Marketplaces (eBay, Etsy, and AirBnB)
3. Big Data Learning Loops (Waze, Symantec, Nielsen, Yelp)
4. Platforms (Microsoft Windows, Apple App Store, Amazon Web Services)

A true “platform” is where other developers build technology and businesses on top of your technology because you offer them:
a. Lots of users, representing a distribution opportunity for them
b. Compelling development tools and technology
c. Monetization opportunities
Easy to understand
Aligned to customer value
Grows with customer usage
Engagement Fights Churn
Expansion Requires Engagement
Small Bets, Big Upside
Multiple Products, Cycles
Low Burn, Adaptive
Empower people to share (inspiring) ideas
Vision
Enterprise Sales Productivity Platform
Visual Communications and Design Suite
Dominant Global Presentation Tool
Enterprise Communication and Productivity Suite
Leveraging
free document publishing platform
Segment 1
Subsegment
Target
Ceiling
Lifecycle Pricing Strategy
Floor
ROI
Cost to Deliver
Help customers grow revenues (increase market share, enter new markets, win in specific situations, increase their own prices).
Pricing does the following:
1. Encapsulates your value proposition
2. Communicates your value
3. Positions you to your customer
4. Positions you relative to your competitors

Survey Monkey
: Number of Responses
Google AdWords
: Pay per Click
Hubspot
Number of Contacts
KISSmetrics
: Number of Events

Multiple
Stakeholders
Why Buy, why Prezi, why Now?
Land & Expand
Price as Signal
Ideal Position for Profit
Corollary to Sales Model
What do our target buyers value?
Support
Operations
+
Target COGs %
/
120M
80M
40M
Landmarks
risk
vision
100%
80%
Paid
Organic
Today
Late 2012
2010
New Bookings %
Love that low CAC ...
35 Experts

83 Books
Strategic Pricing?
Jan 09
Total Users
Total Prezis
Prezis & Users
team
Inherently Viral
75%
Fortune 500
Jan 16
320M
Jan 12
Jan 14
Jan 13
Jan 11
Jan 10
16 Million New Users in 2015
82% Organic
Top Website
Entrepreneur's 100 Most Brilliant Companies
Jan 15
Doug Ireland
VP Finance/Controller
Strategic Pricing for New Product Launches
Salespeople
B2B Sales
Tech
15M people
1.9M people
227K
500 top companies by size of sales team
= 1.7M Salespersons

Avg no. of salespersons per company
: 3.8K

4 % market share at $500 price / user =
$35M


US Companies with over 50 employees:
400K
US companies : 9.2M
Enterprise Sales
500 top companies by size of sales team
= 1.7M Salespersons

Avg no. of salespersons per company
: 3.8K

4 % market share at $500 price / user =
$35M
30% Market Share = 70,000 Users
Top 10 Targets
Within Technology Beachhead Segment
MEDIUM
LARGE
ENTERPRISE
SaaS / cloud comfort
Inside sales ratio to field sales closer to 4:1
Length of sales cycle (weeks, 1-3 months, longer)
Complexity of the sale
Sales discovery process (slides, no slides)
Collaboration level (e.g., AE + sales engineer + VP)
Storytelling power (novice, medium, expert)
Custom presentations per month
Standard presentations per month (light customization)
Sales technique (outdated - cutting edge)
Presentation skills (novice - advanced)

51 - 200
Veracode
Swipely
Grovo
Inkling
InsightSquared
Docker
Bongo International
Brightpearl
Curalate
Yesware
201 - 500
Act-On
Appfolio, Inc.
Xactly
Coupa
Mixpanel
Cardlytics
Monetate
Yext
TalentWise
Brightedge
501-1000
Instructure
Sprinklr
Mulesoft
Priceline.com
Quantcast
LogMeIn
Demandware
LifeLock
New Relic
Jive Software
Salesforce
Oracle (CRM)
SAP (CRM)
Marketo
Pardot (owned by Salesforce)
1001 - 5000
Yelp
Athenahealth
Workday
NetSuite
ServiceNow
Zenefits
Fleetmatics Group
Constant Contact
Zendesk
Cvent
5,000 +
Oracle
Salesforce
SAP
LinkedIn
Synechron**
Cisco
IBM
AutoDesk
Expedia
GE Digital
Qualifying
questions...
Who also sells and markets to this segment?
Hubspot
Eloqua (owned by Oracle)
SugarCRM
Act On
ZohoCRM
$3.500
$3.000
$2.500
$2.000
$1.500
$1.000
$500
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Value score
Price (team of 5 / year)
(number of features offered / number of fully blown team sales tool functionality)
Emerging competitors
Market leader
Limited potential
Some potential
presentation management tools for sales teams
0.9
CustomShow
SlideBank
SlideRocket
Brainshark
KnowledgeVision
Estimated based on google trends, feature scope match, service level offered and current target market.
'high touch' competitors with custom pricing only available upon request
$1.200
$1.000
$800
$600
$400
$200
$0
0.1
0.2
0.3
0.4
0.5
Value score
Price (team of 5 / year)
(number of features offered / number of fully blown presentation tool functionality)
PowerPoint
Keynote
Google Slides
Prezi for teams
presentation creation tools for teams
Established competitors
Dominant player
Limited potential
Emerging competitors
0.6
0.7
0.8
Slides
Estimated based on google trends, feature scope match, service level offered and current target market.
$Y
$X
+
20 %
/
= $Z floor
Win One More Deal = $20,000 - $150,000 value
Salesperson 1% more efficient = $800 - $2400 value
Salesperson 1% higher attainment = $7300 - $42,000 value
75M
Cross Functional Team
Harley
Stefanie
Lenny
Kathleen
Gabor Valyi
Tom
Karen
Damian
Jim S&B

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