PHASE 7: VERSIONING
Design product versions that will increases average selling price and what your customers buy.
Constructing pricing versions allows up-selling and more profitability. Choices are an integral part of effective pricing strategies. Choices help the customer understand the link between price vs. value and facilitate decision-making. However, poorly constructed product versions (often the “good, better, best” systems designed in the absence of a concrete rationale) can be as much a hindrance as a help. If you version on the wrong dimensions, set the wrong levels or otherwise provide the wrong options, customers won’t buy what you were expecting and your average price level will drop.
1. You have quantified the number of product versions you have per customer segment.
2. The number of choices is aligned to the sophistication and preferences of the buyer.
3. The price of each version is different for each customer segment.
4. You have substantiated which features to include in each version with the market.
5. Your versioning structure demonstrates a clear relationship between price and value.
6. Your versioning structure is easy to explain to your customers.
7. Your versioning structure is perceived to be fair by your customers.
8. There is a clear value story around each version (e.g. “Version A is for customers who want X,Y and Z”).
9. There is a low-priced, entry-level version and one or more “strategic” or “decoy” versions to drive customers to a higher price.
10. There is a clear upsell path between low-end versions to high-end versions.
• Competitor Versioning Approaches
• Versioning System Options
• Evaluation Criteria
• Versioning System Scoring
• Conjoint Analysis
• Version Design