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Pricing strategy is not about pricing products

Sure, there is a price tag on every product and service. But, when we look at pricing strategy through a jobs-to-be-done lens, we see that customers aren’t paying for products. They are paying to get a job done. If we know what customers are willing to pay to get a job done well and how well a product helps get the job done, we have the two key inputs we need to formulate an effective pricing strategy framework. With a jobs-to-be-done perspective, we have created and patented a whole new way to determine the value of a product and how to price it.

Willingness to Pay

Companies think that customers are paying for products, but they are not. This is the myth that misleads. They are paying to get a job done. Consequently, companies should stop asking their customers what they would pay for a product. It is the wrong question to ask, and a question customers can’t answer.

When companies ask customers what their willingness to pay is for a product, companies are asking them to figure out how a new product, technology, or feature set is going to help them get a job done better and by how much, and then to translate that improvement into a fair price. This is simply too much to ask.

Customer satisfaction drives pricing strategy

Our pricing methodology works because it is built around a solid definition of what a customer need is. We have discovered that customers consider between 50 and 150 metrics (their desired outcomes) when assessing how well a product or service enables them to successfully execute any job. These metrics are the customer’s needs. They power our innovation process, Outcome-Driven Innovation (ODI).

By assessing how highly a product rates in these metrics, we are able to determine the degree to which a product satisfies all the customer needs. With this insight, we can price a product right. Learn more about how we can help you price your products right with our growth strategy consulting services.

Published Articles

Turn Customer Input into Innovation
In this timeless 2002 Harvard Business Review article, Tony Ulwick first introduces the concept of Outcome-Driven Innovation to HBR readers. He explains how Cordis Corporation (now a division of Johnson & Johnson) used ODI to increase its angioplasty balloon market share from 1 percent to 20 percent with better products and a pricing strategy that leveraged the value.
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The Customer-Centered Innovation Map
In this groundbreaking 2008 Harvard Business Review article, Tony Ulwick and Lance Bettencourt reveal an important discovery they made while turning jobs-to-be-done innovation theory into practice: job mapping. A job map breaks down the job the customer is trying to get done in a way that enables us to formulate an effective pricing strategy.
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White Papers

What is Outcome-Driven Innovation?
Outcome-Driven Innovation is the most effective innovation process in existence today. This white paper, by Strategyn founder and ODI inventor Tony Ulwick, explains why innovation has historically been an ineffective process, the discoveries he made that led to ODI, and how it enables us to formulate an effective pricing strategy and accelerate company growth.
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Books

What Customers Want
What Customers Want, the best seller by innovation thought leader Tony Ulwick, explains what Outcome-Driven Innovation is and why it works. Ulwick, who pioneered jobs-to-be-done thinking and invented ODI, details how ODI transforms jobs-to-be-done theory into a practical method for formulating an effective pricing strategy and an effective process for innovation and growth.
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Case Studies

Choose from a dozen case studies of companies such as Microsoft, Ingersoll Rand, Bosch, and others, and learn how we have used the ODI methodology for understanding customer needs, pricing strategy and to help companies grow.
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Tony Ulwick

Tony is the pioneer of Jobs-to-be-Done Theory, inventor of the Outcome-Driven Innovation® (ODI) process, and founder and CEO of Strategyn. Philip Kotler calls Tony “the Deming of innovation” and Clayton Christensen credits him with “bringing predictability to innovation.” Published in Harvard Business Review and MIT Sloan Management Review, Tony is also the author of 2 best sellers: What Customers Want and JOBS TO BE DONE: Theory to Practice.

Stop guessing. Start innovating.
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