Profit is the net income resulting from revenue minus expenses. Profit is essential because, without profit, a business is unsustainable. The problem is that while there is lots of guidance on how to price regular goods and services, there is little guidance on how to design profitable software-enabled solutions - until now.
Creating a pricing structure provides a consistent and planned approach to pricing your software-enabled solution that helps to achieve your organizational goals.
Do you understand your value exchange model? The economic value of a software-enabled solution is the benefits a customer receives less their costs. How a customer exchanges money for this value represents a critical design decision for product leaders with substantial, long-term implications for their underlying technical and business architectures as well as the sustainability of their solution. Design choices made by business leaders about value exchange directly influence the profitability of the software-enabled solution’s business model.
I have years of fond memories of Thanksgiving Dinner. As a child growing up outside of Buffalo, NY, we’d play downstairs while the parents prepared the meal upstairs. Then, when the time came, we helped set the table, schlepping food up and down the stairs. Finally, following some words of thanks, the entire family would eat, and then the adults would return upstairs, doing… well, adult stuff. But, of course, that adult stuff wasn’t our concern because we kids went back to goofing around, often outside if it wasn’t too cold.
Do you understand your value exchange model? The economic value of a software-enabled solution is the benefits a customer receives less their costs. Join Carlton Nettleton as he demystifies Value Exchange Models and their impact on your software-enabled solutions' profitability.
Pricing your software solution is hard. Constructing pricing models that appeal to customers and maximize profit is a challenge for Product Leaders. So where do you start?
In this interactive webinar Applied Frameworks SVP Product, Carlton Nettleton explores how to quantify value and how profit plays a significant role.
Are you a product manager and wondering "How can I increase profit?" Well first. It's important to ask, "What is profit?" It's the net income that results from revenue minus expenses such as salaries, product costs, and sales and marketing. It fuels sustainable business. So, why do product managers fail to maximize or increase profit? One of the root causes is that product managers often fail to recognize and leverage the unique characteristics of software. To help you increase profit, I’m going to share 10 ways software differs from other kinds of offerings, notably physical goods. Understanding these differences is fundamental to creating pricing and licensing strategies that maximize profit.
Now is the time to recession-proof your business model! Based on the popular blog series; Recession-Proof Your Profit, learn about Term Renewal Acceleration, Customer Segmentation combined with Term Renewal Segmentation, and more!
In the first post in our Recession-Proofing Your Profit series, I shared the basic structure of Term Renewal Acceleration, in which a product manager creates an offer to accelerate an annual term renewal with a limited duration renewal discount. In this post, I will expand on the basic structure of Term Renewal Acceleration to show how adding advanced customer segmentation based on product usage data can further increase profitability.