November 15th 2010

Are you still using Groupthink to set prices? Pricing panel 8

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Are you still using Groupthink to set prices?   I mean, the big meetings where the products group with perhaps marketing sit around a big conference table for a really good naval gazing session.  We are still finding companies that set product value and pricing without any independent 3rd party validation.   If you are guilty, you have lots of company.  Most are really busy with “doing the business”.  Getting a realistic view of the market is almost impossible in the hothouse atmosphere of fast moving companies.

Compounding group think is the  cart-before-the-horse setting of the product price at the end, not the beginning of the product development cycle.  To do this properly, companies would need to acknowledge their bad habits around poor customer requirements setting which leads to vague estimates.  Improper/inadequate estimating is most  likely responsible for holding 90% of technology companies back from a break through to profits and eventual market success.   News flash to dev teams, the sales and marketing folks are positioned to really understand the customers and what they value vs need.  Even if your dev team is  talking regularly to customers, they still should be joined-at-the-hip to sales and marketing.  You must build value, not features.

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